▲ Used cars (The photo above is not related to the content of the article.)
The Financial Supervisory Service (FSS) has issued a "caution" consumer alert following an increase in used car loan scams targeting elderly retirees and young job seekers.
The measure comes in response to numerous complaints regarding schemes that lure victims into taking out excessive loans under the guise of government support programs or job offers, only for the perpetrators to steal the loan proceeds and disappear.
According to the FSS, scammers have been approaching retirees in their 60s and 70s by impersonating government support programs.
They induced victims to sign installment financing contracts by promising to "provide support for vehicle installments and profits if you purchase a used passenger car."
The scammers had victims sign vehicle sales contracts for amounts in the high 50 million won range, while simultaneously executing side agreements that lowered the actual vehicle price to the mid-40 million won range.
The side agreements stipulated that the car dealership would return the difference—after deducting the actual vehicle price and incidental expenses—to the victims.
Once the loan was disbursed by the financial institution, the difference, excluding the actual vehicle cost, was transferred by the victims to the scammers' accounts.
The perpetrators would pay the monthly installments for a certain period to put the victims at ease before absconding with the loan money.
There have also been "job bait" scams targeting young job seekers.
Some logistics companies offering services such as transport driver employment consulting lured job seekers with false or exaggerated advertisements claiming "vehicle support with no initial costs and high income potential." They then pressured the victims into taking out loans ranging from 20 million won to as much as 200 million won to purchase cargo trucks.
In the process, they also pocketed excessive brokerage fees of around 10 million won.
Contrary to the initial promises, the job seekers failed to receive proper transport work, leaving them burdened with loan repayments and registration fees.
The FSS warned that even if fraud occurs, it is rare to find flaws in the financial institution's loan procedures, meaning the consumer remains obligated to repay the full loan amount.
In light of this, the FSS has advised consumers to take precautions when utilizing used car loans.
First, any request to sign a side agreement that involves loan repayment by a third party or the payment of profits should be rejected.
The FSS explained that government agencies never request funds to be transferred to personal accounts under any circumstances.
To prevent fraud, contracts should not be delegated to third parties such as used car dealers.
The agency also emphasized that consumers should check the market value of the vehicle and borrow only the necessary amount, noting that using loan proceeds for purposes other than vehicle purchase can be considered a breach of contract, which may lead to an immediate demand for full repayment.
It further added that if excessive incidental costs are requested, the contract should be reconsidered based on one's own repayment capacity.
The FSS stated, "We have communicated these consumer damage cases to capital and credit card companies," adding, "We plan to provide guidance to strengthen internal control systems related to used car loans and enhance training for loan solicitation agencies."
※ Please note: This article was translated by AI and may contain errors.