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Gov't to crack down on loan sharks starting next month

All News 16:59 January 11, 2018

SEOUL, Jan. 11 (Yonhap) -- The government will crack down on unregistered private lenders beginning month as it moves to lower the lending rate, officials said Thursday.

The maximum legal lending rate will be lowered to 24 percent on Feb. 8 from 27.9 percent.

Ahead of a decline in the lending rate, private lenders have stepped up marketing campaigns amid intensifying competition, according to officials at financial authorities.

Starting Feb. 1, the government will block the websites and telephone numbers of unregistered private lenders.

Fines against unregistered private lenders will be raised to 300 million won (US$279,850) from 50 million won, officials said.

Financial authorities have also tightened regulations for registered private lenders, instructing them to stop using "unhealthy" lines in their television advertisements that could mislead borrowers.

The tightened guidelines for TV ads is part of the government's latest measures to curb payday loans after the Bank of Korea lifted its key interest rate on Nov. 30 last year for the first time in more than six years.

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