PPP lawmaker introduces bill to crack down on illegal loan ads, debt-collection posts

People Power Party lawmaker Yoon Sang-hyun, who represents Incheon's Dong-gu and Michuhol-gu B district, announced Wednesday that he had introduced a bill Tuesday to allow financial regulators to directly request that information and communications service providers block or remove illegal loan advertisements and unlawful debt-collection posts. The legislation is a partial amendment to the Act on Registration of Moneylending Business and Protection of Financial Users.

Under current law, when financial authorities discover illegal loan advertisements or debt-collection posts that exploit personal information, they may refer the matter to the Korea Communications Commission for review.

Critics have long argued, however, that bureaucratic silos between agencies have led to passive enforcement, leaving illegal debt-collection posts on social media unaddressed and exposed to the public for extended periods.

The issue has drawn fresh attention following the Netflix drama series "Teach You a Lesson," which highlighted how deeply illegal private lending has penetrated among teenagers. More than 800 reports have been filed nationwide in connection with the Korean National Police Agency's voluntary self-reporting campaign on juvenile cyber gambling.

Some illegal private lenders have been found to extend ultra-short-term loans to young borrowers while charging interest above the legal cap, and to post debt-collection content on social media — threatening to expose borrowers' personal information to acquaintances or on social platforms if they fail to repay.

The amendment aims to prevent illegal private lending from spreading across social media and to fully eradicate unlawful loan advertising and debt collection, so that young people — who make up the majority of victims — can manage their finances more safely and soundly.

"Damage from illegal private lending is growing because administrative procedures are being prioritized above all else," Yoon said. "We will actively work to protect financial users by stamping out unjust collection practices — such as charging above the legal interest rate or threatening to leak personal information when borrowers cannot repay — and by breaking down the bureaucratic barriers that allow illegal moneylending to thrive."