Park Hyeon-su lived in a windowless micro-apartment in Seoul for a decade, working double shifts and saving each penny for a deposit on a stunning residence. Then, actual property scammers took his cash.
South Korea’s rental housing market encompasses a distinctive system often known as “jeonse” during which tenants pay big deposits – generally lots of of 1000’s of {dollars} – then get to reside rent-free for years earlier than getting all their a reimbursement once they transfer out.
The thought is that landlords get entry to interest-free money for hypothesis, and tenants get free housing, with the property as collateral. But the system is now rife with fraud – police knowledge suggests greater than a billion {dollars} is misplaced to jeonse scams yearly.
The system as soon as accounted for two-thirds of the rental market within the 90s however has fallen in reputation, partly as a consequence of rising consciousness of the dangers.
Park instructed Agence France-Presse (AFP) that he usually labored from 9 a.m. to midnight in menial delivery-related jobs to avoid wasting up $73,000. But after he’d paid a deposit and moved in, his purported landlord – who it seems had by no means had the authority to lease the property – vanished and Park was evicted, with no method to get his a reimbursement.
It was not simply money, he instructed AFP, however “my entire 20s and early 30s” that was stolen, and whereas authorized proceedings are ongoing, he’s extremely unlikely to get restitution.
“My dream of owning a home has vanished, and I’ve given up on dating, not to mention getting married or having a child,” stated Park, 37, who makes use of a pseudonym for his jeonse activism to guard his privateness.
Official knowledge signifies a minimum of 17,000 folks like Park – round 70% of victims are of their 20s and 30s – have been hit by jeonse fraud in recent times.
Activists say authorities aren’t doing sufficient to assist victims or punish fraudsters, who usually handle to cover and preserve the cash. The most sentence for fraud within the South is 15 years in jail.
Suicides
At least eight jeonse rip-off victims have killed themselves, activists say.
Many tenants take out financial institution loans to cowl the large jeonse deposit, meaning to repay as soon as they transfer out and the cash has been returned. But after they have been scammed, they’re nonetheless on the hook to the financial institution.
South Korea’s Parliament handed a particular invoice final yr geared toward serving to victims. The Financial Services Commission provides interest-free loans that may be repaid inside as much as 20 years.
But jeonse rip-off victims say they need to not need to repay the stolen financial institution loans in any respect – until authorities get better their deposits again from the fraudsters.
“Telling young people to spend the next 20 years repaying money lost to fraud is akin to telling them to stop living,” Ahn Sang-mi, a sufferer, stated at a latest rally in Seoul.
The different possibility is to hunt debt “rehabilitation,” which is an analogous course of to chapter and wipes out some debt, however has long-term impacts on credit score scores and is especially damaging for younger folks, activists say.
The authorities shouldn’t “stigmatize young people, who are just beginning their (adult) lives, with the mark of poor credit,” Jang Sun-hoon, a jeonse rip-off sufferer from Daejeon, instructed AFP.
‘Jeonse Hell’
Four years in the past, Choi Jee-su, 33, used his life financial savings plus a financial institution mortgage to maneuver right into a jeonse condo to flee life in a cockroach-infested dorm room.
But his condo was offered out from underneath him, and the owner vanished along with his deposit, leaving him saddled with money owed.
To repay his unique financial institution mortgage, Choi took out high-interest bank card loans and offered off his shares, working grueling shifts in eating places and residing on low cost meals to avoid wasting money.
He spent days making scrumptious meals for purchasers however would “hesitate to buy a single pack of instant noodles” for himself.
“I would end up choosing the cheaper pack of noodles, only to cry while eating it because it just tasted terrible,” Choi, who wrote a e book titled “Jeonse Hell,” stated.
The opposition Democratic Party has proposed a invoice permitting the state to reimburse tenants for deposits misplaced to fraud. But the federal government has pushed again citing price considerations, with Land Minister Park Sang-woo saying that younger tenants could have been “playing fast and loose” once they signed the contracts.
The National Assembly will vote on the invoice on May 28.
Choi, who’s now engaged on a liquefied pure gasoline (LNG) tanker to avoid wasting up cash for pilot coaching – a dream scammers compelled him to placed on maintain – says the federal government must act.
Jeonse fraud is destroying lives, he stated. “Victims lose it all, (our) lives, dreams and joy are shattered.”
Source: www.dailysabah.com
