Kyungnam Bank, KEB Hana Bank, Citibank Korea Accused of Fraud

The Citizens United for Consumer Sovereignty (CUCS) has filed a complaint with the prosecution requesting an investigation into Kyungnam Bank, KEB Hana Bank, and Citibank Korea for rigging loan interest rates.

In a report submitted to the prosecution, the civic group stated, "While the household debt has reached its record high and the economy has become more and more difficult for the general public, the defendants committed a crime of taking illegitimate profits by manipulating loan interest rates. Even though banks should hold themselves to a high standard of morality and accountability as they operate with the money the customers entrust, the accused manipulated loan interest rates and took unjust profits from their consumers.”

“Kyungnam Bank was found to have overestimated the interest rates of 12,279 loans, or about 6% of the entire household loans they offered over the past five years. As a result, the bank gained 2.5 billion won in undue profits. Hana Bank had 252 such cases and earned 158 million won worth of unwarranted profits and Citibank had 27 cases and gained 11 million won. This is an act of fraud under Article 347 of the Penal Code, which is defined as ‘deceiving others to take their property or to make illegal profits,’” said the group.

Previously, the Financial Supervisory Service (FSS) has examined banks’ system of calculating interest rates, and found that three banks, including Kyungnam Bank, imposed unreasonably high interest rates on customers.