"Mom, Dad. If you get a call because of me, please pay it back for me. I'm sorry."
Kim Sun-woo (a pseudonym), 30, gazed at the camera with teary eyes and struggled to continue speaking. Perhaps out of anxiety that his face could spread across social networking services (SNS), he repeatedly swallowed and sighed throughout the short video. Despair was evident on the face of Kim, who had to borrow money using the contact information of his family and acquaintances as collateral.
Some illegal lenders continue malicious debt collection practices, lending money to young people on ultra-short terms and then spreading the fact to acquaintances and on social media if borrowers fail to repay. Critics say a swift, government-wide response is needed, given that young people who have just begun their careers can fall into ruin from a single wrong choice.
According to The Seoul Economic Daily's reporting compiled Tuesday, five illegal debt-collection accounts on Instagram publicly displayed photos and videos of 128 people holding loan IOUs or exposing their faces.
These photos and videos exposed names, resident registration numbers, and places of residence. The IOUs show that most were ultra-short-term loans of 400,000 to 600,000 won with maturities of three to seven days. Illegal lenders take IOUs, photos, and videos before lending small amounts. When payments fall behind, they first notify acquaintances, and if they still cannot recover the money, they make the information public on social media. Some photos and videos show illegal lenders insulting victims as shameless people who committed adultery, gambling, or sexual crimes, or showing victims bowing at temples or standing on their heads.
In particular, the IOUs included anti-human rights provisions such as "I consent to debt collection from all acquaintances on social media in the event of late payment" and "I consent to waiving my portrait rights." In some cases, even family relationship certificates containing the names and dates of birth of the debtor's family members were disclosed. A counselor specializing in illegal private lending victims explained, "The lenders operate by first having debtors submit their photos and handwritten pledges before lending money." The counselor added, "In many cases, they first contact acquaintances when payments are late, and if they cannot recover repayment, they make the information public on social media."
The problem is that posts disclosed by illegal lenders on their social media accounts spread indiscriminately online. Some posts were shared more than 100 times within Instagram, and some cases were shared more than 300 times. Posts disclosed to an unspecified number of people spread even to victims' friends and work colleagues, destroying their lives.
A significant portion of the victims were found to be young people. One illegal debt-collection account showed that out of a total of 67 posts, 49 people were in their 20s and 30s, born after 1988.
Experts believe that illegal private lending is spreading rapidly among young people. According to the "Report on the Status of Illegal Private Lending Damage to Small Business Owners" published by the Gyeonggi Welfare Foundation last October, the proportions of victims in their 20s and 30s were 12.4% and 28.0%, respectively.
This is because life for young people is becoming increasingly difficult. According to the National Data Agency, the youth employment rate in May was 43.8%, the lowest since May 2020 (42.2%). In the first quarter, the nominal income (5.39 million won) of household heads aged 39 and under fell 1.7% from a year earlier, the only decline among all age groups. Seok Hee-jung, a research fellow at the Gyeonggi Welfare Foundation, stressed at a National Assembly forum Wednesday, "Data showing the recent influx of young people into illegal private lending is appearing frequently as outlier values," adding, "This is a situation that requires government attention."
Authorities also recognize the seriousness of such illegal debt collection. However, critics point out that the matter is serious because illegal debt-collection social media posts have been exposed unchecked for seven months. The financial authorities, which have no jurisdiction over information and communication service providers, refer illegal posts to the Korea Communications Standards Commission when they find them, requesting that social media operators delete them. But the response is slow due to bureaucratic barriers between agencies. A financial authority official said, "We are preparing a law revision so that the financial authorities can directly request social media companies to delete posts."
