Democratic lawmaker introduces bill to block illegal lending ads online

Yun Jun-byeong, a Democratic Party of Korea lawmaker representing Jeongeup and Gochang-gun in North Jeolla Province and a member of the National Assembly's Agriculture, Food, Rural Affairs, Oceans and Fisheries Committee, on Monday introduced a bill to protect ordinary financial consumers from illegal private lending and false or exaggerated lending advertisements proliferating on SNS, loan brokerage platforms and other online channels.

Under current law, lending and loan brokerage industry associations are required to conduct voluntary screening of member advertisements, but that obligation is set out in an enforcement decree rather than in the statute itself, leaving the associations' screening authority without firm legal backing — a shortcoming Yun and critics of the existing framework have repeatedly flagged.

Illegal private lending advertisements have been spreading rapidly through SNS, the internet and loan brokerage platforms, and even registered lenders and brokers have been found posting false or exaggerated ads online. The current voluntary screening system is ill-equipped to swiftly block the constantly shifting landscape of online advertising, making it difficult to prevent harm to financial consumers.

The bill's key provisions include mandatory pre-screening of lending advertisements, a new power for industry associations to demand corrections or suspension of unlawful ads, and a legal basis for paying rewards to those who report illegal lending advertisements.

The legislation would require anyone seeking to place lending advertisements through newspapers, internet news outlets, broadcasters, telecommunications networks or other information and communications channels to first obtain pre-screening approval from the lending and loan brokerage industry association. It also establishes a legal basis for the association to demand corrections or suspension of illegal online lending ads. The association would be required to report its quarterly screening results to the Financial Services Commission within one month of the end of each quarter, and the bill provides for reward payments to individuals who report illegal online lending advertisements, strengthening the overall monitoring network.

"False and exaggerated advertisements, as well as illegal private lending ads, obstruct consumers' ability to make informed financial decisions and cause serious harm, so more proactive oversight is needed," Yun said. "I will do my utmost to create an environment where the public can use financial services with confidence."