Inclusive finance policies are aimed at providing financial support to the most vulnerable and marginalized groups to help them gain new opportunities and get back on their feet, thereby creating a virtuous cycle between financial inclusion and economic growth. A variety of government-sponsored microloan products are available for low-income individuals and those with unfavorable credit records. In addition, debt adjustment programs are available for delinquent debtors, offering an extended payment period, amortization, interest rate reduction and debt reduction. Consumer protection is a key area of inclusive finance policies. In this regard, the new legislation on financial consumer protection passed at the National Assembly in March 2020 aims to protect consumers from misselling and other unfair sales practices of financial companies while strengthening consumer rights and empowering consumers to make informed decisions about their investment and asset management.
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Jun 02, 2022
- Debtor Assistance with Legal Representation and Litigation Services Available at Free of Charge
- The FSC unveiled an overview of the current status on the use of debtor assistance with legal representation program on June 1. In 2021, a total of 1,200 victims of illegal private lending or debt collection activities applied for support in 5,611 cases and debtor assistance with legal representation was provided in 4,841 cases in total, which signifies that the debtor assistance program has become a crucial social safety net for damages inflicted by illegal private lending. The authorities plan to continue to make efforts to prepare for a rise in demand for remedies from illegal private lending by strengthening ties with various types of inclusive finance measures and securing sufficient fiscal resources, while working to stamp out illegal private lending by closely cooperating with investigative authorities. Overview Since January 28, 2020, the government has been offering the debtor assistance with legal representation programat free of charge to help victims of illegal debt collection activities done by both registered and unregistered money lenders and to support those that have fallen prey to exorbitant interest charges in excess of the maximum legal lending rate. When a victim of illegal private lending applies to seek support through the Financial Supervisory Service (FSS)s website or via a phone callplaced to the illegal private lending help center or the Korea Legal Aid Corporation (KLAC), attorneys from KLAC provide assistance with legal representation in dealing with illegal private lenders and for litigation services at no cost to debtors. (Legal Representation for Handling Debt Collection Issues) KLAC attorneys provide service of handling debt collection issues with creditors (money lenders) in place of debtors in order to help debtors avoid any harm caused by illegal debt collection activities. (Litigation Services) For damages incurred by exorbitant interest charges in excess of the maximum legal lending rate and illegal debt collection activities, K
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