More than 10,000 people fall victim to jeonse fraud

The number of victims involved in jeonse scams reached the 10,000 threshold. A total of 12,537 reports which had been filed were reviewed by a committee to support the victims of jeonse fraud under the Ministry of Land, Infrastructure and Transport 17 times until Wednesday from June when a special act was put in place to help and support those who fall victim to jeonse scammers. It concluded that 10,256 people were acknowledged as victims.

According to a survey issued in October by the Korea Center for City and Environment Research, the average jeonse deposit spent per household is 117.11 million won. Almost 1.2 trillion won, roughly calculated, vanished into thin air. What’s worse is that there are still other housing scammers out there. Apart from Incheon and Seoul, where the first incidents of such crime were reported, other regions such as Suwon and Daejeon have seen a growing number of victims.

Housing scams affect many victims ceaselessly and ruin people from all walks of life, given that a whopping 10,000 people lost their money. Some signed a contract on a unit in an illegal building without knowing. Others made a monthly rental or jeonse contract unaware that the house was already handed over to a trust company. For still others, it was impossible to take their money back because the landlord filed for bankruptcy after signing a lease contract.

Given such a variety of cases of victims, it may not be surprising that there is a blind spot concerning the special act. After all, as many as eight revised bills have been proposed for less than six months since it took effect. Acknowledging as a scam victim does not immediately lead to redressing damage. Victims should wait long until legal proceedings, including auctions, are completed. Even so, their patience does not guarantee they will recover a full deposit.

That is why the opposing party’s proposal to redress damage first and take money back later comes across as an attractive solution. It suggests that the government give a jeonse deposit back to leaseholders instead of landlords and seek ways to take money back later just as the Korea Housing & Urban Guarantee Corporation (HUG) does. It may be considered a simple answer given that the opposing party even says that it will introduce an ex-officio proposal to redress damage first and retrieve money later so that the bill will come into effect.

It may take longer than expected to get money back afterward. Even the HUG will see a substantial deficit next year. It is not certain whether the total amount of money was recovered. In the worst-case scenario, the government will assume debts that housing scanners are supposed to repay. It is also a matter of fairness because there are victims of other scam crimes or tenants who paid larger deposits to have a safety net in place.

If the opposing party stays stubborn with a sharp edge given such circumstances, it is no different from taking advantage of the desperation of the victims in political strife. One of the National Assembly’s duties is to collect various voices of stakeholders and contribute to social consensus. The focus needs to be placed on the fact that the victims of housing fraud have lost their homes, an essential part of life. As a next step, there should be a discussion on whether to spend taxpayers' money recovering damage first or addressing the blind spot as much as possible. In the meantime, the government is supposed to thoroughly review what is possible and what’s not and give a clear explanation to victims and the National Assembly. This may be the right way to go for the sake of the victims taking to the streets in a brutal cold snap to get the special law revised.