A leading consumer advocate has reiterated its determination to reveal past irregularities involving loan interest rates in the first-tier banking industry by resorting to “judicial authorities.”
Following its receiving applications from borrowers for a joint suit against banks during the first half, the Korea Consumer Agency said Sunday that the victimized bank consumers were allowed to join the class action until the end of September as an extension.
Its move comes after financial authorities recently rejected some 200 borrowers’ demands, led by KCA, to conduct a probe into the allegation that some commercial banks manipulated loan rates via a cartel.
Irrespective of the rejection by the Financial Supervisory Service, the coming suit will be filed with the court in the coming months, according to the civic group.
“The defendant could be all commercial banks in the local market,” KCA said. “Any individual and corporate borrowers are allowed to participate in the coming suit as long as they experienced that banks overcharged them.”
In its earlier statement, KCA alleged that banks overcharged borrowers collectively about 4.1 trillion won ($3.5 billion) in interest from January 2010 to June 2012 by fabricating rates for certificates of deposit.
“This means the nation’s bank customers had to shoulder the extra loan interest burden worth 136 billion won a month on average,” said KCA.
The civic action comes amid the ongoing antitrust probe from the Fair Trade Commission into the allegations that some banks rigged the CD and loan rates via cartel practices.
The FTC investigation came as the CD rates remained relatively high when other market rates had dropped. The rate had remained untouched at 3.54 percent for almost three months in the first half of 2012.
The CD rate is the benchmark rate for corporate and household loans. The interest rates of 56 percent for corporate loans and 23 percent for household loans are tied to the interest rate.
By Kim Yon-se (firstname.lastname@example.org