The government will push to require pre-screening for all online loan advertisements and introduce a “paparazzi system” that pays rewards to people who report illegal loan ads. It is also reviewing the use of undercover operations in illegal private-lending crimes.

The government held a meeting of the pan-government task force to eradicate illegal private lending on Thursday, chaired by Office for Government Policy Coordination Minister Lim Ki-geun (임기근). It decided to pursue four additional institutional improvement measures. Attendees included the Financial Services Commission, the Ministry of Justice, the Prosecution Service, the National Police Agency, the Financial Supervisory Service and the Credit Recovery Committee, among others.

First, it will expand the scope of pre-screening for advertisements, currently operated as self-regulation by the loan association, from major daily newspapers and video advertisements to all online loan ads. It will also review eligibility, including a lender’s history of administrative sanctions, business performance and whether business premises are actually in use. It will also move to require advertising media such as platforms to confirm whether pre-screening has been completed before running ads, and to impose fines for non-compliance.

It will also introduce a system that pays rewards for reporting illegal online loan advertisements. Example standards presented by the government are 5,000 won per case for reports of unreviewed or illegal advertisements and 500,000 won per case for reports of illegal business operations linked to illegal private lending. It will push in the fourth quarter of this year to revise the relevant lending business law and its enforcement decree.

It will also review, after consultations among relevant ministries, a plan to introduce “undercover operations” into investigations of illegal private lending. It will also review a “victim reporting encouragement period” that sets special requirements and a period for voluntary confession. It will immediately begin drafting an amendment to the lending business law, and aims to operate the reporting encouragement period in the first half of 2027.

It will also check online platforms’ measures to delete and block illegal ads. Centered on the Korea Communications Commission, it will run a self-regulation consultative body with platform operators in the fourth quarter of this year. It will check in the first half of next year how self-regulation is being implemented, including deletion and blocking of illegal ads and account suspensions.

It will also shorten procedures to support victims. Currently, after counselling at the Credit Recovery Committee’s integrated support center, the Financial Supervisory Service reviews materials and requests an investigation, and then police investigate. The government plans in the fourth quarter of this year to dispatch police personnel to the committee so that, if necessary, an investigation can be requested immediately at the counselling stage.

Lim, the minister of the Office for Government Policy Coordination, said, “Measures to eradicate illegal private lending are not simply measures to normalize financial transactions.” He said, “They are urgent measures for people’s livelihoods and measures that save lives.”