“Jeonse Fraud Is a Social Disaster,” Joint Memorial of Rage in Incheon

Members of the National Response Committee for Victims of Jeonse Fraud and Ggangtong Jeonse (tentative name), consisting of jeonse fraud victims, hold a memorial service on the 49th day after the death of the first victim, following a press conference launching the committee at the south square of Juan Station in Michuhol-gu, Incheon on April 18. Jo Tae-hyeong

At the square south of Juan Station (Gyeongin Line), Incheon at 7:30 p.m. April 18, citizens getting off the subway to go home offered white chrysanthemums before an empty picture frame and paid silent tribute. It was the site of a joint memorial for the jeonse fraud victims in Michuhol-gu, organized by over a hundred jeonse fraud victims from Seoul, Gyeonggi, Pohang, and Jeju in addition to Michuhol-gu, Incheon. Jeonse is a housing rental system where homes are leased for a lump-sum deposit, which is later returned to the tenant when the contract expires.

The memorial service was, in nature, the 49th-day-after-death memorial rite of A (38), who took his own life after failing to get back any of his 70 million won jeonse deposit in February. But after B (26) and C (31) succumbed to financial difficulties triggered by jeonse fraud and took their lives on April 14 and 17 respectively, the event changed to a joint memorial service for the jeonse fraud victims.

Other fraud victims who attended the ceremony Tuesday held up signs demanding “Sternly punish the people who organized the jeonse fraud in Michuhol-gu!” and “Confiscate the property of the fraudsters and save the victims now! Sternly punish the jeonse fraudsters for murder!” and collected signatures from citizens. Their social rage against jeonse fraud was just that fierce.

D (45), another victim of housing fraud in Michuhol-gu who attended the service, said that his situation was not much different from the three people who had died. D was on the verge of getting kicked out of his home without getting back any of the 90 million won deposit.

D took out a loan of 65 million won for the deposit before moving into the apartment he currently resided in. D first fell victim to jeonse fraud by the “Incheon construction king,” who owned 2,700 homes. When D could not get a loan for the jeonse deposit, this time, he found a home with credit loans only. But once again, his home was put up for auction.

He could no longer afford to pay 1.5 million won a month to pay off the principal and interest. He said, “I am barely hanging on by not eating as much and by saving up,” and added, “I’m more worried about how I’m going to live if I get kicked out of this house.”

E (43) was also in a similar situation. E moved in after paying a jeonse deposit of 65 million won in 2019. Two years later in 2021, the landlord raised the deposit and E paid 10 million won more. But the entire apartment complex she lived in was put up for auction last month. The landlord had put up each apartment in the complex including E’s home as collateral for a fixed value of 150-170 million won per apartment.

The complex consists of 136 apartments among which fifty are owned by the Korea Land & Housing Corporation (LH). The other 86 apartments will be put up for auction, and if a successful bidder appears, E will have to soon vacate her house. E complained, “I will get 34 million won as the party with top priority to compensation, but where can I go with that money?”

Ahn Sang-mi, head of a group for the jeonse fraud victims in Michuhol-gu described the jeonse fraud in Michuhol-gu as an organized crime, “premeditated by a person called the ‘construction king’ who conspired with over fifty people including real estate agencies, their assistants, and building management firms” and argued that anyone could have fallen victim to their scheme. Ahn further argued, “The death of the three people who took their own lives after falling victim to jeonse fraud was not suicide, but murder since they were driven to the edge,” and said, “The government should step up to help the victims and sternly punish the perpetrators.”

Ahn Sang-mi, head of a group for the victims of jeonse fraud in Michuhol-gu, speaks during a press conference launching the National Response Committee for Victims of Jeonse Fraud and Ggangtong Jeonse at the south square of Juan Station in Michuhol-gu, Incheon on April 18. Jo Tae-hyeong

In the same location on Tuesday, prior to the joint memorial service, a ceremony was held to launch a national group for the victims of jeonse fraud and ggangtong jeonse. “Ggangtong” is a Korean word for “can” or “empty can,” and “ggangtong jeonse” refers to homes where the mortgage on the house and the jeonse deposit adds up to more than the value of the house.

The national organization argued, “In the past, the government and the National Assembly not only ignored the soaring housing and jeonse prices, but they implemented policies expanding loans for jeonse deposits enabling gap speculation (purchasing homes with no money, possible when jeonse deposit prices are similar to the price of the home). Financial institutions and guarantee agencies also abused their authority to provide reckless loans and no-questions-asked guarantees. The central and local governments did not properly manage the registered rental property businesses.” The group further claimed that because of these reasons, the latest case was not simply an issue of fraudulent contracts between individuals, but clearly a social disaster that the state was responsible for.

The national committee continued and called for the government to provide practical support for the victims instead of measures just for show. They demanded the government form a government-wide task force to conduct a survey of the actual status of jeonse fraud, establish measures to support the victims according to the type of damage they suffered, strengthen financial assistance, temporarily suspend the auction of homes involved in the fraud, and enact a special legislation to rescue jeonse fraud victims.