South Korea warns of used car loan scams targeting elderly

South Korean financial regulators are urging caution against a growing wave of scams that prey on vulnerable populations, particularly elderly retirees and young job seekers. These fraudulent schemes often involve promises of high returns on used car purchases through government-backed loan programs.

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Elderly retirees and young job seekers are falling for scammers' words and signing up for unwanted or excessive used car loan contracts, leading to damages.

Scammers typically approach individuals in their 60s and 70s, claiming they can secure favorable terms and profits by purchasing used passenger cars via installment financing. The victims sign contracts with used car dealerships, which then submit these to financial institutions for loans. The deception deepens with a secondary, "side" contract that lists a lower vehicle price than the official one. When the financial institution disburses the full amount based on the primary contract, the difference is given to the victim, who is then pressured to hand it over to the scammer under various pretexts like fees or operational costs.

Initially, the scammers may cover the installment payments to build trust. However, they eventually disappear, leaving the victim burdened with the entire loan repayment, including the money they handed over. Similar scams target job seekers, luring them with offers of high-paying jobs requiring the purchase of commercial vehicles like trucks, only to siphon off additional loan amounts for "expenses."

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If you are asked to sign a side contract under the guise of a government support program during a transaction, you must firmly refuse.

Financial authorities note that victims often find it difficult to seek redress through financial institutions, as the loan procedures themselves rarely show irregularities. They strongly advise the public to outright refuse any requests for side contracts, especially when presented under the guise of government support programs. Officials emphasize that legitimate government agencies never request fund transfers to personal accounts.

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Government agencies never request fund transfers to personal accounts, so extreme caution is needed.