South Korea’s National Assembly is advancing legislation to address the widespread rental fraud scheme known as “jeonse” scams. (Image courtesy of Yonhap)
SEOUL, Aug. 21 (Korea Bizwire) – South Korea’s National Assembly is advancing legislation to address the widespread rental fraud scheme known as “jeonse” scams, with the plight of foreign victims highlighting the complexities of the country’s unique housing market and the challenges of providing equitable support.
On August 20, amendments to the Special Act on Jeonse Fraud Victim Support passed through the Land, Infrastructure and Transport Committee’s legislation subcommittee.
While this marks a step forward, lawmakers emphasize that legal reforms alone are insufficient to address the gaps in victim assistance.
The jeonse system, a distinctive feature of South Korea’s rental market, allows tenants to make a large lump-sum deposit to the landlord instead of paying monthly rent.
This deposit is typically returned at the end of the lease term. However, unscrupulous landlords have been exploiting this system, leaving both domestic and foreign tenants in financial distress.
According to data released by the Ministry of Land, Infrastructure and Transport on August 20, 306 foreigners had been officially recognized as victims by the Jeonse Fraud Victim Support Committee as of July 18.
This figure represents 1.6% of the total 19,621 victims identified so far.
The situation for foreign victims is particularly dire. While they can receive some forms of support under the current special law, such as deferment of auctions and tax claim adjustments, they are ineligible for public rental housing.
This exclusion prevents them from continuing to live in their current homes after transferring the priority purchase rights to the Korea Land and Housing Corporation (LH).
In response to these challenges, the Ministry of Land, Infrastructure and Transport (MOLIT) has agreed to consider extending the maximum residency period for emergency housing support from the current two years to six years for foreign victims.
Additionally, MOLIT has committed to seeking cooperation from the Ministry of Justice to ensure that foreign jeonse fraud victims do not face disadvantages when extending their visas.
“For foreigners, it’s difficult to get jeonse loans, so most of us use our own money saved over many years,” shared a Chinese woman in her 30s who lost her entire savings to a scam.
She added, “The auction for the house I’m living in will resume in October, and I have no idea where I’ll go or how I’ll afford to live after eviction.”
The challenges extend beyond housing. Another foreign victim, identified as B, highlighted additional concerns: “To file a lawsuit to have our deposit returned, we need to terminate the jeonse contract and notify the landlord. But as foreigners who need to extend our visas, we worry that terminating our housing contract might make visa renewal difficult.”
As the legislative process moves forward, lawmakers from both ruling and opposition parties have pointed out the need for additional support for foreign victims.
The urgent need to further extend the postponement of foreclosures and auctions for affected properties was also highlighted during the subcommittee meeting.
Kim Eun-hye, a lawmaker from the People Power Party, stated, “While victims may feel there’s more to be desired, it’s significant that both parties have reached an agreement to provide relief.”
She added that the law’s implementation would be closely monitored over the next six months.
Lee So-young of the Democratic Party emphasized, “Once the amendment passes the National Assembly, the ball will be in the government’s court. The issues of equity and practicality that we’ve consistently raised during the review process must be addressed and resolved by the government during the law’s implementation.”
Moving forward, MOLIT will be required to conduct and report victim status surveys to the National Assembly every six months, using this process to address support gaps.
This regular reporting mechanism aims to ensure ongoing attention to the evolving needs of all victims, including foreign nationals.
M. H. Lee (mhlee@koreabizwire.com)
