Seoul, South Korea - The ongoing Jeonse (lump-sum deposit lease) fraud crisis in South Korea has led to a significant increase in recognized victims, with the government and lawmakers scrambling to extend support measures. According to the Ministry of Land, Infrastructure, and Transport, 2,509 individuals have been officially designated as Jeonse fraud victims this year alone, pushing the total number to over 28,000 since the enactment of the 'Special Act on Support for Jeonse Fraud Victims and Residential Stability' in June 2023.
Key Statistics Highlight Vulnerable Demographics
The crisis disproportionately affects young adults, with 74.73% of victims being under the age of 30. Victims in their 40s account for 14.16%, followed by those in their 50s, 60s, and 70s. A staggering 97.4% of victims have lost Jeonse deposits of 300 million won or less, indicating the financial vulnerability of those targeted.
Government and LH Response
In response to the escalating crisis, the Korea Land and Housing Corporation (LH) has stepped up efforts to purchase victimized properties. Under the revised Jeonse Fraud Special Act, LH can provide these properties to victims for up to 10 years with rental support. As of recent data, LH has acquired 198 properties and is processing thousands more applications.
Legislative Efforts to Extend Support
With the current special act set to expire in May, the National Assembly is actively discussing extending its validity. Four amendment bills proposing extensions of 2 to 4 years are under consideration, reflecting the urgency to continue providing relief to affected individuals.
Jeonse System and Fraud
The Jeonse system, unique to South Korea, involves tenants providing a large lump-sum deposit to landlords instead of paying monthly rent. This system has become a target for fraudulent activities, leaving many tenants with substantial financial losses.
Additional Government Measures
Beyond property purchases and legislative actions, the government is also providing:
Legal assistance: Offering legal aid to victims pursuing compensation.
Financial support: Providing low-interest loans and other financial assistance to help victims recover their losses.
Counseling services: Offering psychological support to victims dealing with the emotional toll of the fraud.
The government has also increased efforts to improve regulation of the Jeonse system to prevent future fraud cases.
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