"Jeonse fraud is not merely an individual transaction risk, but an issue directly tied to platform trust and user protection," said Min Hye-bin, head of the legal office at Zigbang.
At a public-private seminar hosted by the National AI Strategy Committee at Seoul Square in central Seoul on the 7th, cases of AI-based jeonse fraud prevention were introduced. Zigbang presented its 'Zikim AI Diagnosis' service, which uses AI to analyze property registration records, building ledgers, and market price data to assess transaction risks.
According to the proptech industry on the 9th, as jeonse (a Korean lease system requiring a large lump-sum deposit instead of monthly rent) fraud has grown into a social problem, proptech firms are moving beyond simple property brokerage and entering a competition to build "safety infrastructure" that filters out transaction risks in advance. Zigbang's Zikim AI Diagnosis also focuses on supporting pre-contract decision-making, going beyond after-the-fact defenses centered on contract reviews.
The Zikim AI Diagnosis service analyzes whether a building is in violation of regulations and examines legal rights including mortgages, seizures, trusts, and leasehold registration orders. It also assesses histories of deposit non-return, chronic tax delinquency, and eligibility for deposit guarantee insurance. The service additionally provides public safety data such as nearby crime records and information on whether registered sex offenders reside in the area.
"In real estate transactions in particular, there is a structure in which contracting parties are led by brokers," Min said. "We needed an ecosystem where tenants themselves can ask, 'Please add this special clause,' or 'There is a mortgage on this property, what should I do?'"
Unlike apartments, studio units and villas are especially vulnerable to jeonse fraud because their market prices are difficult to gauge and their rights structures are complex, according to the analysis. "Even for a villa right next door, price estimation is difficult and each property is highly unique," she stressed. "We aim to resolve this information asymmetry through AI."
Zigbang has previously operated a contract review team. The company has expanded its services from 'Zikim Brokerage,' which establishes joint liability with brokers, through 'Zikim Diagnosis,' which provides contract reports, to this AI-based automated diagnosis system.
The industry sees this trend spreading beyond private services to public safety nets as well. Since March, the Seoul Metropolitan Government has expanded its AI-based 'Jeonse Fraud Risk Analysis Report' service from 1,000 cases to 3,000 cases. The service, offered to young people aged 39 or under, is provided in partnership with proptech firm Naejibscan.
This service also allows AI to predict jeonse fraud risk by analyzing landlord and property information once an address is entered. A distinctive feature is that AI estimates and displays the scale of senior-priority deposits on multi-household homes and the possibility of multiple property ownership. Landlord credit, tax delinquency records, and financial fraud histories are also reflected in the composite risk assessment.
"We are expanding support to standardize AI- and big data-based risk analysis in order to block risks before contracts and help ensure safe decision-making," the Seoul Metropolitan Government said. Private proptech services have begun to partially take on the role of a public safety net.
Still, the industry believes that opening and standardizing public data are essential for AI-based jeonse fraud prevention services to function more precisely. "For accurate diagnosis, comprehensive public data is needed, including not only property registration but also confirmed date records, resident registration inquiries, and tax payment certificates, but there are many constraints for private companies to utilize them," Min said. The National AI Strategy Committee also said at the seminar, "We will work with the Ministry of Land, Infrastructure and Transport to open up more public infrastructure."
