Experts are calling for stronger enforcement of debt collection laws amid continuing reports of illegal collection practices. (Image courtesy of Yonhap)
SEOUL, Nov. 25 (Korea Bizwire) – Following the recent suicide of a single mother in her 30s who was harassed by loan sharks, experts are calling for stronger enforcement of debt collection laws amid continuing reports of illegal collection practices.
According to the Supreme Court’s Judicial Yearbook released November 24, only 13 cases (16.7%) out of 78 first-instance verdicts for debt collection law violations last year resulted in prison sentences without suspension. The majority of cases ended in suspended sentences (23.1%) or fines (38.5%).
The statistics paint a concerning picture of lenient enforcement, especially given that the current law prescribes penalties of up to 5 years in prison or fines up to 50 million won for violent collection practices, and up to 3 years or 30 million won in fines for privacy violations or harassment.
The scale of the problem is significant, with the Illegal Private Lending Victim Support Center recording hundreds of complaints annually: 350 in 2021, 356 in 2022, and 768 in 2023. However, experts note that these numbers likely represent only a fraction of actual cases, as many victims are too frightened to report abuse.
“While maximum statutory penalties are relatively high compared to other crimes, most perpetrators end up paying fines and avoiding jail time,” said Kim Yeongjung, a researcher at the Korean Institute of Criminology and Justice. He advocates for more detailed sentencing guidelines and increased use of prison sentences to deter illegal collection practices.
The challenge has grown more complex with the rise of non-face-to-face small loan operations using ghost KakaoTalk accounts and burner phones for harassment, making perpetrators difficult to track. Law enforcement often gives lower priority to these cases due to the relatively small amounts involved in individual cases.
Current sentencing guidelines recommend prison terms of 4-10 months for repeated harassment or nighttime visits, and 6-18 months for violence or threats. Legal experts suggest these penalties may be insufficient to deter illegal practices.
Song Tae-kyung, head of Citizens for Economic Democracy, suggests removing the requirement for “repeated” violations to prove criminal behavior. “Eliminating this ambiguous standard could help prevent harassment through loitering or phone calls,” he said.
However, Song cautioned that legal reforms alone may have limited effect given the extensive illegal lending market. “The fundamental solution requires addressing the proliferation of illegal lending operations,” he emphasized.
Prosecutors and police have recently announced intensified enforcement efforts against illegal debt collection. A Justice Ministry official stated that potential system improvements are continuously being reviewed in consultation with relevant agencies, including the Financial Services Commission.
M. H. Lee (mhlee@koreabizwire.com)
