SEOUL – Three major South Korean banks, KB Kookmin, Shinhan, and SC Jeil, are reeling from a massive fraud scandal involving jeonse (lump-sum lease deposit) loans, with losses estimated at nearly 5.7 billion won ($4.3 million USD).

KB Kookmin Bank revealed on Tuesday that it had been the victim of a 2.2 billion won fraud scheme perpetrated by an external individual. The fraud, which spanned from May 2023 to November 2024, was uncovered after the bank received a report from a branch office. The bank plans to press criminal charges against the individual.

Shinhan Bank also reported a separate fraud incident involving 2 billion won, also carried out by an external party. This scheme, which involved identity theft for loans, lasted for three years, from April 2021 to April 2024. The bank said it is considering legal action after an internal investigation.

SC Jeil Bank disclosed a case of suspected fraud related to jeonse and credit loans, with losses amounting to 1.5 billion won. The scheme, which took place between October 2023 and October 2024, was discovered after a jeonse loan customer filed a complaint. The bank is currently investigating the matter.

Initial reports suggest that these incidents may be connected to a larger jeonse fraud case in the Sejong area, where perpetrators allegedly used stolen tenant identities to secure illegal loans. There are concerns that the total scale of the fraud could be much larger.

The banks are cooperating with police investigations to determine the full extent of the damage and the details of the schemes. This scandal has raised concerns about the vulnerability of the Korean banking system to sophisticated fraud tactics.