Variant illegal loan sharking disguised as 'gift certificate reservations' leads to woman's death; CEO arrested

Authorities have arrested the CEO of an illegal loan shark company suspected of driving a woman in her 30s to suicide through predatory lending practices. The company allegedly operated a novel form of illegal finance disguised as "gift certificate reservations."

Police arrested the CEO, identified only as 'A,' on charges including violating the Loan Business Act and making false accusations. Investigators are expanding their probe to include four other potential suspects identified during the investigation. The case came to light in April when the victim was found dead in a lodging facility in Seoul's Dongdaemun District.

According to investigators, the victim had been struggling financially and used the "gift certificate loan" service for about a month starting in March. This scheme involved lending small amounts of cash and then demanding repayment with interest in the form of larger value gift certificates. Because transactions were made with gift certificates rather than cash, the scheme superficially resembled a typical gift certificate sale, allowing it to cleverly evade financial authorities and the Loan Business Act.

The victim initially borrowed approximately 500,000 won (about $370), but within a week, she owed interest equivalent to half the principal. Unable to manage the escalating debt, she repeatedly rolled over her loans using gift certificates, a cycle that reportedly increased her total debt to about 15 million won (around $11,000) within a month. Police are investigating whether the CEO subjected the victim to excessive debt pressure or illegal collection tactics.