rental scam-financial support

▲ Victims of a massive home rental scam scandal hold a news conference in central Seoul on May 26, 2023, calling for government support measures. (Yonhap)

rental scam-financial support

Financial authorities to provide support for massive home rental scam victims

SEOUL, June 1 (Yonhap) -- South Korea's financial authorities said Thursday they will provide a set of financial support measures to offer interest-free and low-interest loans to victims of a massive home rental scam scandal.

Under the support plan, the government will allow the victims to pay back their home rental loans over up to 20 years interest free after signing a special contract with state-run housing finance institutions.

It will also temporarily ease lending rules for a year and offer low-interest loans for victims to help them secure stable residence.

The scheme came as a follow-up of the National Assembly's recent passage of a special bill aimed at supporting the victims of a series of frauds abusing the country's unique rental system, called "jeonse."

Jeonse is the country's unique rental system, referring to a system in which tenants give their landlord a large upfront deposit worth as much as 90 percent of the home's value instead of paying monthly rent. The landlord then earns interest off the deposit and returns the deposit at the end of the lease.

A series of fraud cases involved alleged suspects renting highly collateralized homes to victims for deposits worth tens of millions of won. These homes were later auctioned off due to the suspects' failure to repay debts to financial institutions, resulting in victims facing eviction without receiving their deposits back.


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