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Full accountability must be demanded for Jeonse fraud

Posted April. 22, 2023 08:07,   

Updated April. 22, 2023 08:08


Three young Koreans in their 20s and 30s committed suicide after falling victim to jeonse fraud. Additional fraud cases are being reported nationwide, particularly in Michuhol-gu in Incheon, Dongtan in Hwaseong, Guri in Gyeonggi Province, Sasang-gu, Dong-gu, Busanjin-gu in Busan where multi-household and unit homes, known as "villas," are common.

The government and politicians' efforts to address the issue of jeonse fraud have been inadequate, leaving tenants feeling increasingly insecure and unprotected.

The city of Guri caught 20 jeonse fraudsters who had scammed at least 500 tenants, causing an estimated damage of tens of billions of won. Ninety victims of the jeonse scams filed reports that they could not retrieve their deposits amounting to 5 billion won. Similarly, in Ansan, around 300 victims suffered an estimated damage of 60 billion won due to jeonse fraud. In December 2022, a notorious "Villa king" caused an estimated damage amount of 100 billion won through jeonse frauds. Shockingly, many victims of these scams may not even be aware that they have been victimized, as their jeonse contracts have not yet expired. The police have identified around 1,700 victims of jeonse fraud with an estimated damage of 310 billion won, and this number is expected to grow.

Furthermore, the government's six-month moratorium on auctions of houses related to jeonse fraud has exposed loopholes, causing victims to question the effectiveness of these measures. Despite the government's request, auctions of houses with transferred debts from financial companies to lenders, debt collection companies, and individuals have proceeded as scheduled. Of the 1,787 homes affected by the “Incheon Construction King” case, 31% of the creditors are lenders, collection agencies, and individuals. While the government is providing low-interest loans to affected households and pushing for legislation to prevent further damage, it remains unclear whether tenants of auctioned homes will receive compensation for their losses.

The police have announced their intent to charge the jeonse fraudsters with violating the law of the Organization of Criminal Groups and to confiscate all of their criminal proceeds. Given the severity of this crime, which has led to young people committing suicide and caused damage amounting to tens of billions of won, it is clear that strict punishment is necessary.

Jeonse fraud has become a major social disaster that cannot be addressed through general measures. Special laws are needed to protect the victims, and it is urgent to establish clear standards for identifying jeonse fraud and understanding the full extent of the damage it has caused. Those who orchestrated these crimes, including the fraudsters themselves, the real estate agents who aided them, and those behind the scenes, should be tracked down and punished for robbing young and ordinary people of all they own and their future aspirations.