The cumulative number of recognized victims of jeonse (a Korean lease system requiring a large lump-sum deposit instead of monthly rent) fraud in Korea is approaching 40,000. The government plans to accelerate the pace of purchasing affected homes to actively support housing stability for the victims.
The Ministry of Land, Infrastructure and Transport (MOLIT) said Tuesday that the Jeonse Fraud Victim Support Committee held three plenary meetings in April and finally approved 855 cases as jeonse fraud victims. Among the confirmed cases, 789 were new applications, while 66 were cases where additional damages were verified after appeals against previous decisions. As a result, the cumulative number of victims has risen to 38,503 since the Jeonse Fraud Victim Act took effect in June 2023.
Of all cases reviewed, 61.0 percent were recognized as victims, while 22.2 percent were rejected for failing to meet the requirements. Another 9.9 percent were excluded from application because full refunds of their deposits were possible through priority repayment provisions.
The Korea Land and Housing Corporation (LH) has so far purchased 8,357 jeonse fraud-affected homes under its home acquisition program. The program involves LH acquiring the preemptive purchase right from victims, winning the home at auction or public sale, and then providing it to the victim as public rental housing to support housing stability.
Victims can convert the auction proceeds — generated from the gap between the lower winning bid and the normal purchase price — into a deposit, allowing them to continue living in the affected home for up to 10 years. When they move out, the auction proceeds are paid immediately to help address their losses.
LH has purchased an average of 840 units per month from January through last month. As of April 28, jeonse fraud victims had requested preliminary consultations for home purchases in 22,064 cases, of which 15,020 have been reviewed and deemed eligible for purchase.
Tenants struggling with jeonse fraud can file a victim determination application with the city or provincial government of their residence, and those recognized as victims can receive guidance on support measures through the Korea Housing & Urban Guarantee Corporation (HUG) Jeonse Damage Support Center.
The government is also providing financial support to ease victims' burden of repaying jeonse loans. When victims have difficulty repaying jeonse loans due to fraud, the guarantee institution first makes a subrogation payment for the guaranteed portion, and victims can then repay the amount in interest-free installments for up to 20 years. KB Kookmin, Shinhan, Hana, Woori, NongHyup, IBK Industrial Bank of Korea and Kakao Bank operate a "long-term installment repayment program," with specific usage details available through branch consultations.
