A total of 4,481 people have fallen victim to home rental scams this year, with their combined financial damage reaching 510.5 billion won (US$377.3 million), police data showed Monday.
Police apprehended 2,582 suspects of so-called jeonse scams but were only able to retrieve 22.6 percent, or 115.3 billion won, of the damage incurred before the suspects were convicted, according to the data submitted to Rep. Jeon Bong-min of the ruling People Power Party (PPP).
Under South Korea's decades-old jeonse system, tenants transfer a large lump-sum deposit, known as key money, to landlords which is then returned at the end of the rental agreement, which usually lasts two years. During the lease period, the tenants do not pay monthly rent.
The long-term deposit system has recently emerged as a serious social issue, due to a large number of jeonse fraud cases, in which scammers buy multiple homes using the jeonse money as leverage and later refuse to return the deposits at the end of the lease.
In a recent case, prosecutors are investigating a family in Suwon, south of Seoul, suspected of embezzling an estimated 47.5 billion won worth of jeonse deposits from over 600 tenants.
In May, the parliament passed a special bill aimed at supporting the victims of home rental scams by having the government offer interest-free loans to the victims for up to 10 years.
Source: Yonhap News Agency