Seoul Police Dismantle Loan Shark Ring for Exorbitant Interest Rates, Extortion of Nude Photos

SEOUL — Local authorities announced on Monday the apprehension of a loan shark operation that extorted debtors with threats of distributing their nude photos and demanded exorbitant interest rates averaging 3,000 percent per year.

According to Yonhap News Agency, 11 individuals have been taken into custody for accumulating approximately 230 million won (US$170,051) in profits from October 2022 to July 2023. The scheme involved lending money in exchange for debtors' personal information and nude photographs. Authorities have referred four suspects to prosecutors with physical detention, and two others without detention. Five remaining suspects, including the leader of this unregistered lending operation who is in his 30s, are currently under investigation without physical detention.

The offenders reportedly initiated loans of 300,000 won, requiring repayment of 500,000 won within a week. This far exceeds the legally permissible annual interest rate of 20 percent. In cases of late repayment, the annual interest rate skyrocketed to an average of 3,000 percent, with the highest recorded rate reaching up to 13,000 percent.

The police have identified 83 victims thus far, the majority of whom are in their 20s and 30s and come from low-income, low-credit backgrounds. Six of the suspects in custody have been specifically charged with organizing and participating in a criminal group, having established a system to divide roles in the illegal activities.

To elude police detection, the group used phones and bank accounts registered under different names and changed their operational base every three months. As part of the ongoing investigation, police have confiscated the suspects' phones to prevent the further circulation of explicit photographs. Victim protection measures have also been implemented, including referrals to counseling centers and the deletion of the compromising images.

Officials indicated that the investigation is likely to expand, as there are suspicions of additional individuals involved in the illegal operation.

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