Woman paid W50m in interest, then died — loan sharks charged 578% annual rate

Police have arrested illegal moneylenders who charged annual interest rates of up to 578 percent and harassed borrowers' family members and acquaintances to collect debts.

The Gwangju Metropolitan Police Agency's Organized Crime Investigation Unit said Wednesday it had detained two loan sharks, identified only as A and a second suspect, on charges including violations of the Act on Registration of Credit Business and Protection of Finance Users.

The two are accused of operating illegal lending businesses between December 2024 and May this year, collecting interest above the legal maximum from 19 borrowers and pocketing about 102.4 million won ($76,400) in illicit gains. The annual interest rates they applied ranged from a low of 66 to 184.5 percent to a high of 328 to 578.2 percent, investigators found.

The suspects pressured borrowers to repay debts by harassing not only the borrowers themselves but also people around them.

One victim, a woman in her 50s identified as B, borrowed 40 million won from the suspects and repaid more than 50 million won in interest within a matter of months — yet continued to face illegal debt collection until she died.

B had run her own small business and began struggling to keep it afloat last year. She reportedly found the suspects after seeing a loan flyer on the street. When she fell even a day behind on interest payments, she was bombarded with collection calls, and she eventually took out additional loans from other illegal lenders to service the high-interest debt — a cycle that ended in tragedy.

B left a note saying she could not escape the cycle of debt despite repaying interest every day, and asking that her daughter be spared the suffering she had endured, according to police.

Acting on that information, police launched an investigation and identified criminal charges against 20 people in total — six illegal moneylenders including A, and 14 others who had provided bank accounts to the operation.

Of those, the two main suspects, including A, were detained and referred to prosecutors. Police said they are continuing to investigate potential additional victims.

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