In South Korea, domestic banks are taking steps to help victims of jeonse fraud by proposing a plan that allows them to reduce their distribution claims during the auctions of properties affected by such fraud. The Financial Services Commission convened a meeting on December 13 to discuss these so-called 'discount distributions' to assist the victims. This meeting saw representatives from several major banks including Kookmin, Shinhan, Woori, Hana, Nonghyup, Suhyup, and Gwangju Bank. The fundamental aim is to increase the amount of recovery for tenants who have lost their deposits due to fraud by allowing banks to apply for lower auction distributions than their claims on these properties.

Typically, banks, as the primary secured creditors in real estate auctions, receive their dues first, which has often resulted in tenants being unable to fully reclaim their deposits. In this new initiative, banks are proposing to forfeit a portion of their entitlement in favor of the tenants, thereby redistributing the auction proceeds. The anticipated scale of this 'discount distribution' is set to safeguard between one-third to half of the deposits for affected tenants, which aligns with the minimum safety standards outlined in the ongoing discussions concerning the revision of the 'Special Law on Support for Victims of Jeonse Fraud and Housing Stability' currently in the National Assembly.

Choi Yo-seop, a representative from the Financial Services Commission, stated that this measure has been a topic of ongoing discussion within special committees dealing with jeonse fraud issues. He urged the banking sector to actively pursue related plans to ensure that victims can recover a portion of their lost funds, emphasizing the critical support role banks can play in alleviating the financial distress faced by these victims.