2024-01-01 06:41:00
A used car sales company in Yangjae-dong, Seoul on the 1st. The CEO suddenly closed down the business and disappeared, leaving the door tightly closed. Photo = Reporter Ahn Jeong-hoon The police have begun an investigation into the CEO of a leasing company and his associates who disappeared without returning car lease deposits worth hundreds of billions of won to customers. This company hired famous celebrities as employees and promised to return the principal, but in reality, it was reported to have been operating as a ‘Ponzi scheme’ by using the next investor’s money to prevent the deposit from being returned. There are at least 1,000 to 2,000 known victims so far, so a repercussion is expected.
Expanding business with famous comedians
According to the Seocho Police Station and the leasing industry on the 1st, Yoo, CEO of used car sales company B and other company officials were sued on charges of fraud. They disappeared without paying the deposit promised during the car lease contract with the customer. Company B promoted the company using famous comedian-turned-entertainer Lee. Photo = Provided by reader Company B is a large used car sales company with branches throughout the country. Established in 2010. Since 2017, we have been running an auto lease business that allows customers to rent their own cars for the duration of the contract by paying a certain amount each month. In this process, it grew rapidly by putting famous comedians and dealers such as Mr. Lee at the forefront. The company’s sales, which were around 200 million won in 2015, increased more than 100 times to 20.8 billion won in 2019.
Company B attracted customers with low lease fees. They attracted customers by promoting that if they deposit 30-40% of the vehicle price, they would cover regarding half of the monthly payment. It was also stipulated that 70-80% of the deposit would be returned at the end of the contract.
The victim, Mr. Kim (35), leased a 2019 Volvo XC60 with a market price of 45 million won from Company B’s dealer in August 2021. In this process, Company B arranged for Mr. Kim to receive a loan of 56.5 million won from a capital company. Of the loan amount, 21.4 million won was transferred to Company B as a vehicle deposit. Instead, Company B decided to provide 500,000 won out of the 1.1 million won that Mr. Kim had to pay every month to the capital company. They also promised to return 70% (14.98 million won) of the 21.4 million won deposit at the end of the lease. Mr. Kim paid only 600,000 won of the monthly lease fee of 1.1 million won, and received 70% of the deposit back at the end of the contract.
I need to get a deposit, but it’s a scam.
The content of the conversation between the customer and the representative of Company B, who requested termination of the contract and return of the deposit. Photo = Provided by reader The problem arose when a large number of deposits were not returned at the end of the contract period. Mr. Kim applied for a refund of the deposit to end the 27-month lease in November last year, but lost contact with company officials. In the end, he was in a situation where Mr. Kim had to repay the loan that was supposed to be returned to the capital company. For 27 months, Mr. Kim paid 29.7 million won, 1.1 million won per month, including the support fund from Company B, but he still has to repay 49.89 million won, including interest on the capital company loan (8.5% per year).
Company B is said to have been operating the business as a Ponzi scheme by collecting deposits from new customers and preventing them from returning deposits from existing customers. However, due to the recent economic downturn, new customers are not coming in, and existing customers are unable to repay the principal.
An industry official said, “The commission that dealers receive when selling used cars is regarding 2%, but Company B paid dealers a commission of 6%.” He added, “In order to pay the high commission and customer support, they actually have no choice but to use existing customers’ deposits.” “It wouldn’t have happened,” he pointed out.
According to the industry, the number of victims who have not received their deposits back from Company B to date is around 1,000 to 2,000. The amount of damage varies from tens of millions of won per person to up to 700 million won. If potential victims who are not yet aware of the company’s payment suspension are added, the damage is estimated to reach hundreds of billions of won.
Victims are preparing a class action lawsuit. CEO Yoo issued a statement on the 18th of last month and explained, “I don’t think we will be able to maintain the company normally once more,” and “However, we will proceed with repayment as soon as the company’s situation improves.” I attempted to call Representative Yoo several times to hear his position, but was unable to reach him.
Reporter Ahn Jung-hoon [email protected]
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