The issue of unreturned deposits, which has long plunged victims of Jeonse fraud into despair, has finally reached a new turning point. On April 23, 2026, the amendment to the ‘Special Act on Support for Victims of Jeonse Fraud and Housing Stability’ passed the National Assembly plenary session, significantly broadening the path to victim relief. Notably, it includes groundbreaking provisions such as the state guaranteeing at least one-third of the deposit and introducing a ‘pre-payment, post-settlement’ system for victims of trust fraud, drawing considerable attention. However, it’s too early to simply celebrate. This amendment is not a panacea that will solve all problems.
Given that countless victims were on the verge of losing their deposits, which were tantamount to their entire assets, the passage of this bill is highly significant in establishing a minimum safety net. Nevertheless, we must not overlook the fact that blind spots and limitations still exist. It is crucial to carefully examine how effective this special act amendment can be as a relief measure and what challenges remain.
Minimum Deposit Guarantee System: What Has Changed?
One of the core aspects of this amendment is the introduction of the minimum deposit guarantee system. Previously, even if a Jeonse fraud property went to auction, victims often received almost none of their deposit back due to senior creditors. However, now, regardless of the auction outcome, the state will be responsible for at least one-third of the deposit. For example, if a victim who lost a 300 million won deposit recovers nothing from the auction, the state will provide 100 million won. If 50 million won is recovered from the auction, the state will additionally compensate the remaining 50 million won.
This serves as a social safety net, helping victims secure minimum living expenses and get back on their feet. Furthermore, the threshold for being recognized as a victim has been lowered. The deposit limit, which was previously 500 million won, has been raised to 700 million won, bringing a significant number of Jeonse victims in the Seoul metropolitan area under the legal framework. Key changes are as follows:
- The state guarantees at least one-third of the deposit (regardless of auction results)
- The recognized deposit limit for victims increased from 500 million won to 700 million won
- Attachment and provision of collateral for victim support funds are completely prohibited
- Public rental housing support is available even if the victim’s house cannot be purchased
‘Pre-payment, Post-settlement’ System for Victims of Trust Fraud
Among the various types of Jeonse fraud, trust fraud was the most complex and difficult to remedy. This method involves the landlord transferring ownership to a trust company and then deceiving tenants into signing contracts. Legally, tenants’ status was not properly recognized, making it difficult for them to participate in auction procedures. It would be accurate to say that there were virtually no remedies for them.
This amendment brings hope to victims of ‘unauthorized contracts,’ including trust fraud. It introduces a ‘pre-payment, post-settlement’ system where the state pays all or part of the minimum guaranteed amount before the auction/public sale, and then settles after the auction/public sale concludes. This means that victims do not have to endure complex legal disputes, which could take years, entirely on their own. Considering the suffering experienced by victims of trust fraud, this system is expected to provide not only financial assistance but also psychological stability. The advantages that victims of trust fraud will gain from the introduction of this system are clear:
- Pre-payment of the minimum guaranteed amount from the state before auction/public sale
- Reduced burden of complex legal disputes
- Expected resolution of issues regarding non-recognition of tenant status
Lingering Shadows: Policy Loans and Unreturned Social Housing Deposits
It is clear that this special act amendment has made significant progress in remedying Jeonse fraud. However, challenges and blind spots still remain. In particular, loopholes in the policy loan review system are still pointed out as a trigger for Jeonse fraud. According to a survey by the Korea Research Institute for Human Settlements, 77.8% of victims who secured their Jeonse deposit with a loan used policy loans such as the ‘Butimok’ loan. However, there is criticism that the Jeonse fraud risk assessment for these policy loans was often not properly conducted. This is a paradoxical situation where loans intended for ordinary citizens and young people are instead exposed to fraud risks.
Furthermore, recently, incidents of unreturned deposits have occurred even in ‘social housing,’ which are rental homes created with public support, causing shock. Young people who moved in trusting SH Corporation’s announcements found themselves unable to get their deposits back. The problem is pointed out as insufficient safety measures against private operational risks, despite public funds being invested. Given these circumstances, it is natural that the anxiety one wishes to ‘freeze-dry’ does not disappear. Problems that are difficult to solve with the amendment alone include:
- Need to strengthen Jeonse fraud risk assessment for policy loans
- Reinforcement of deposit safety measures for public-interest rental housing such as social housing
- Demand for fundamental system improvements to prevent fraud
The 2026 Jeonse Fraud Special Act amendment is undoubtedly an important step that will bring a ray of hope to victims of Jeonse fraud. However, continuous efforts are needed to supplement issues outside the legal framework and existing loopholes. Society as a whole must continue to show interest and make efforts to wipe away the tears of victims and ensure that no one else despairs over their deposits.