Foreign victims of rental scams receive limited gov’t support

Victims of rental scams shed tears during a press conference held in front of the presidential office in Seoul, May 18, caling for the expansion of support measures by the government. Korea Times file

By Lee Yeon-woo

“People around me say victims are not at fault. However, we find ourselves forced out onto the streets,” sobbed a Chinese woman who had fallen victim to a rental scam during a public hearing hosted by the main opposition Democratic Party of Korea (DPK), Sunday.

She has been living in Suwon, Gyeonggi Province, with her husband and child for the past six years.

“We’ve approached various institutions, but they told us we couldn’t receive support because we are foreign nationals,” she said. “Many other foreign nationals have also been scammed by Jeong’s family. However, they cannot respond adequately due to a lack of information. Please prevent (victims like) us, who also have been harmed but haven’t been rescued because we are foreign nationals.”

On Oct. 17, a suspect, identified only by his surname, Jeong, along with his wife and son were accused of defrauding 394 tenants to the tune of 47.5 billion won ($34.9 million) through “jeonse” contracts in Gyeonggi Province.

Jeonse refers to a unique Korean rental system where landlords receive a substantial returnable deposit instead of monthly rent. Lately, a growing number of scammers have been buying houses with minimal upfront money by leveraging a series of jeonse contracts and then refusing to return the deposits at the end of the lease period.

Many foreign nationals have been caught up in this scheme. According to a center in Gyeonggi Province that supports the victims of rental scams, 14 foreign nationals had reported their cases as of Wednesday. Considering the foreign nationals who may not yet be aware of their losses, the actual number of foreign victims is expected to rise.

Despite the government announcing a series of measures to support jeonse fraud victims, foreign nationals have been excluded from the support available.

The special bill assisting jeonse victims provides them with interest-free loans for up to 10 years to cover the deposits they’ve made. If their deposit amount surpasses 55 million won, they are offered low-interest loans. In addition, some local governments provide emergency housing for victims who pass a screening process. The bill also includes support covering 70 percent of legal fees if tenants opt to buy homes that are auctioned.

However, low interest loan products offered by state-run housing corporations, including Korea Housing & Urban Guarantee Corp. and Korea Housing Finance Corp., are “in principle,” not available to foreign nationals.

Securing emergency housing is also challenging. The number of available units is limited, and the screening process is stringent, even for Korean nationals. Furthermore, foreign nationals are not eligible to apply for emergency welfare benefits aimed at low-income earners.

“Even after they are recognized as ‘victims’ under the special bill, it doesn’t address all the issues. Their loan interest would decrease slightly, and they might be permitted to stay in public housing for a longer duration. Yet, even these measures exclude foreign nationals,” said Kwon Ji-woong, the head of a center backed by the DPK that assists jeonse victims.

“This issue should not revolve around distinguishing between nationals and foreigners. Given that this is an obvious injustice that occurred while they were residing here, I believe support should be offered without differentiating between Korean and foreign nationals.”


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