These rental scams are driving young people to commit suicide in South Korea

For ten years, Park Hyun-soo lived in a tiny windowless apartment. Seoulworking two jobs and saving every penny to buy a nice house. But his dream was shattered when his security deposit was misused by scammers. South Korea’s rental market operates under a unique system called “jeonse,” where tenants pay large deposits — sometimes hundreds of thousands of dollars — and then live rent-free for years, then get their deposit back when they move.

This formula allows the owner to receive interest-free funds, and Tenants Get free accommodation, using the property as security. But the system, which accounted for two-thirds of the rental market in the 1990s, is less popular today. It has been plagued by fraud: more than $1 billion is lost to scams each year, according to police. Park Hyeon-su remembers that he often worked from 9 a.m. to midnight, doing small delivery jobs, which allowed him to save $73,000. But after he paid his deposit and moved in, his so-called landlord—who turned out to be an impostor—disappeared, and he was evicted with no way to get his money back.

17,000 fraud victims

‘It’s not just about the money’he said but “My Twenties and Thirties” Stolen. “My dream of owning a house was shattered and I gave up on dating, let alone getting married and having kids.”The 37-year-old South Korean explained that he wanted to testify under a pseudonym to guarantee his anonymity. Like him, at least 17,000 people – 70 percent of them aged between 20 and 30 – have fallen victim to full-text scams in recent years. At least eight victims of such scams have committed suicide, according to the association.

Many tenants take out bank loans to pay the huge security deposits required, intending to repay them after the money is returned to them after they move out. But once they are defrauded, they still owe the banks. South Korea’s parliament passed a law last year to help victims, offering interest-free loans for more than 20 years. But victims complain of injustice. “Telling young people to spend the next 20 years paying back money lost to fraud is like telling them to stop living”Ahn Sang-mi, a victim, said at a recent rally in Seoul.

Another option is to wipe out some debt through a bankruptcy-like process. But that would damage borrowers’ credit scores, which is particularly harmful to young people, activists say. “Defaming young people” Jang Sun-hoon, a victim in Daejeon, noted that they were just beginning their adult lives.

Four years ago, Choi Jee-su, 33, used all his savings and a bank loan to move into the Jeonse Apartment to escape life in a cockroach-infested student room. But his apartment was sold without his knowledge and the owner disappeared with the deposit, leaving him in debt. To repay the initial bank loan, Choi borrowed at high interest rates on his credit cards and sold stocks, while working part-time at a restaurant and scrimping on every penny to eat out. He spent the day preparing delicious meals for his customers, but “Hesitating whether to buy a pack of instant noodles” For himself. “I finally chose the cheapest one and cried while eating it because it tasted so bad.”referring to a young man who tells his story in a book called “The Hell of the Past”.

The opposition Democratic Party proposed a bill that would allow the state to compensate tenants for deposits lost due to fraud. But the government rejected the proposal, citing cost concerns. Choi, who now works on a gas ship and hopes to save money to become a pilot, called on the government to take action. He said the Quanze fraud ruined people’s lives. “The victims have lost everything, their lives, their dreams and their happiness have been shattered.”