[1] Whether a “loan of money” under Article 2 subparag. 1 of the Act on Registration of Credit Business, etc. and Protection of Finance Users, as its conceptual element, must necessarily include an act of providing credit by granting money under the premise that a certain amount of money should be returned at least for a certain period of time, regardless of the means or method of transaction (affirmative)

[2] The case holding that in a case where the Defendant was indicted on charges of violating the Act on the Registration of Credit Business, etc. and Protection of Finance Users on the ground that he/she engaged in unregistered credit business by deducting a certain amount of the face value of the cultural product right purchased by the clients from a pre-paid interest and selling the remaining fin number to the merchandise coupon company by posting an advertisement writing stating the phrase, such as "small-value loans and the cashing of settlement of small-value loans," etc. on the Internet site and allowing the clients who have reported and accessed the advertisement to pay the right of cultural products and notify him/her of the PIN number of the fin number of the right of cultural products certified after purchase, the Defendant was indicted on charges of violating the Act on the grounds that he/she purchased the said fin number from the clients by selling the gift coupon to the merchandise coupon company, on the ground that it is difficult to see that the Defendant’s offering of

[1] Article 19(1)1 of the Act on Registration of Credit Business, etc. and Protection of Finance Users (hereinafter “Credit Business Act”) provides that “a person who engages in credit business, etc. without registration with the Mayor/Do Governor under Article 3 of the same Act shall be punished.” Article 2 Subparag. 1 of the Credit Business Act provides that “a person who engages in credit business, etc.” means a business of lending money (including lending money by bill discount, transfer for security, or by any other similar means) or a business of collecting claims arising from a loan agreement from a registered credit service provider or credit financial institution.”

In light of the relevant provisions and legislative purpose of the Credit Business Act, the prior meaning of the “loan of money,” and the nature and effect of the bill discount and the transfer of security, etc. cited by Article 2 Subparag. 1 of the Credit Business Act as being included in the “loan of money,” it is reasonable to view that the “loan of money” under Article 2 Subparag. 1 of the Credit Business Act, as its conceptual element, must necessarily include the act of providing credit by providing money under the premise that at least a certain amount of money should be returned, regardless of the means or method of transaction, at least in the future.

Therefore, in a case where money is given through a transaction of purchasing goods or services at a discounted price, a reasonable assessment is conducted by comprehensively taking into account the specific transaction relationship and the background leading up to the delivery of money in question, the intent of the parties concerned, and other specific and individual circumstances relevant to the provision of money, and the case where it is difficult to recognize the elements of the above concept of loan under the Credit Business Act as a loan of money under the said Act is also an unduly expanded interpretation or analogical interpretation in the direction unfavorable to the defendant beyond the possible meaning of the language and text of the provision, such as Article 2 subparagraph 1 of the Credit Business Act.

[2] In a case where Defendant was indicted for violating the Act on Registration of Credit Business, etc. and Protection of Finance Users (hereinafter “Credit Business Act”), on the ground that: (a) by posting an advertisement writing stating the phrase, such as “small-value loans and cashization,” and allowing the clients who reported it to pay the small-value of cultural products and notify him/her of the PIN number of the fin number of the right of cultural products certified after purchase, the clients deducted 22% of the face value of the right of cultural products purchased from the clients as prior interest; and (b) by lending the remaining 77.8% of the face value of the right of cultural products purchased by the clients; and (c) the said fin number was operated by selling it to the gift coupon service provider, the case holding that the lower court erred by misapprehending the legal principles on the interpretation of the Act on the Registration of Credit Business, etc. and Protection of Finance Users, and that the Defendant’s claim to receive goods or services corresponding to the face value of the right of use by presenting or delivering it to the issuer or the clients, etc.

[1] Article 12(1) of the Constitution of the Republic of Korea; Article 1(1) of the Criminal Act; Article 1, Article 2 subparag. 1, Articles 3, 8, and 19(1)1 of the Act on Registration of Credit Business, etc. and Protection of Finance Users / [2] Article 12(1) of the Constitution of the Republic of Korea; Article 1(1) of the Criminal Act; Article 2 subparag. 1, 3(1), and 19(1)1 of the Act on Registration of Credit Business, etc. and Protection of Finance Users; Article 325 of the Criminal Procedure Act

Defendant

Defendant

Attorney Lee Nam-he

Busan District Court Decision 2017No4694 Decided April 26, 2018

The judgment below is reversed, and the case is remanded to Busan District Court.

The grounds of appeal are examined.

1. Part on violation of the Act on Registration of Credit Business, etc. and Protection of Finance Users (hereinafter “Credit Business Act”).

A. The principle of no punishment without the law requires that a crime and punishment shall be prescribed by law in order to protect an individual’s freedom and rights from the arbitrary exercise of the State’s penal authority. In light of such purport, the interpretation of penal provisions shall be strict, and an excessively expanded interpretation or analogical interpretation of the meaning of the express penal provisions to the disadvantage of the defendant is not permitted as it is against the principle of no punishment without the law (see, e.g., Supreme Court Decision 2012Do14725, Nov. 28,

Article 19(1)1 of the Credit Business Act provides that a person who engages in a credit business without registration with the competent Mayor/Do Governor under Article 3 of the same Act shall be punished. Article 2 Subparag. 1 of the Credit Business Act provides that “The term “credit business” means a business of lending money (including lending money by discounting notes, transferring for security, or by any other means similar thereto) or a business of collecting claims arising from a loan agreement from a registered credit service provider or a credit financial institution.”

B. In light of the relevant provisions and legislative purpose of the Credit Business Act, the prior meaning of the “loan of money,” and the nature and effect of the bill discount and the transfer of security, etc. cited as being included in the “loan of money,” it is reasonable to view that the “loan of money” under Article 2 Subparag. 1 of the Credit Business Act, as its conceptual element, must be necessarily included in the act of providing credit by providing money under the premise that a certain amount of money should be returned at least for a certain period, regardless of the means or method of transaction, regardless of whether it is a means or method of transaction. Specific reasons are as follows.

① The legislative purpose of Article 1 of the Credit Business Act is to provide for matters necessary for the registration and supervision of credit business and loan brokerage business, and regulate illegal debt collection and interest rates of credit business and credit financial institutions, thereby ensuring the sound development of credit business as well as protecting financial users and contributing to the stable economic life of the people. The primary legislative purpose of the Credit Business Act is to regulate illegal debt collection activities and excessive interest rates in the event of delinquency in the payment of the principal and interest of loans. To this end, the Credit Business Act imposes the registration obligation on credit service providers, etc. (Article 3), limits the interest rates of credit service providers (Article 8), and imposes criminal punishment against violations thereof.

② The prior definition of “loan of money” is “the lending of money with interest and time limit fixed.” According to the foregoing, the lending of money is premised on the delivery of money on the premise that it will be returned in a certain future, and is premised on the act of receiving the agreed interest during the period of use and profit-making in return.

③ Article 2 Subparag. 1 of the Credit Business Act includes a bill discount, transfer for security, or any other similar method in the concept of a loan.

The drawee of a bill refers to a transaction in which the holder of a bill whose ordinary maturity is not yet due transfers the bill to a financial business operator, such as a bank, and gives a discount to the bank, etc. after deducting the interest from the amount of the bill to its maturity and other expenses (see, e.g., Supreme Court Decision 94Da20709, Nov. 22, 1994). The subject matter of a bill discount is the securities in which monetary claims corresponding to the amount of the bill payable at maturity indicated on the bill. The acquisitor of the bill bears monetary claims and the discount issued by endorsement on the bill bears the obligation of recourse if the bill is defaulted. Moreover, the difference between the discount of the bill and the amount indicated on the bill, which is calculated according to the discount rate applied at the time of purchasing the bill through the discount of the bill, can be deemed as equal to the interest on the amount of the bill payable at maturity (see, e., Article 8(2) of the Credit Business Act). Therefore, lending money to the client through the discount of the bill before maturity.

Meanwhile, security for transfer is based on a creditor’s monetary claim against the debtor, i.e., the existence of a secured claim, and is a means by which the creditor collects the principal and interest of the claim at the time of the debtor’s default on obligations. Therefore, the delivery of money via security for transfer includes the act of providing credit through a monetary claim, which is the secured

C. Therefore, in a case where money is given through a transaction of purchasing goods or services at a discount, it is difficult to reasonably evaluate the specific transaction relationship and the background leading up to the delivery of money in question, the intent of the parties concerned, and other specific and individual circumstances related to the provision of money as a loan of money under the Credit Business Act even in a case where it is difficult to recognize the concept elements of the above loan. It is an excessively expanded interpretation or analogical interpretation in the direction unfavorable to the defendant beyond the possible meaning of the language and text of the provision, such as Article 2 subparag. 1 of the Credit Business Act, and thus violates the principle of no punishment without law.

D. Of the facts charged in the instant case, the summary of the Defendant’s violation of the Credit Business Act is as follows.

A person who intends to engage in a credit business shall register with the competent Mayor/Do Governor having jurisdiction over the place of business. Nevertheless, on July 2015, the Defendant, without registering with the competent authority, posted an advertisement letter stating the phrase, such as (Internet address omitted), ○○○○, and △△△△△△, at one’s own home, on the Internet website, such as “small Loans and Small-Sum Settlement,” and reported it to the Nonindicted Party who accessed, thereby making small payment of KRW 45,00,000, which is certified after the purchase, notify him/her of the number of the right of cultural products, such as Grandland, and then deducted KRW 10,00,000, which is 22% of the face value of the cultural products purchased by the said Nonindicted Party, and thereafter loaned KRW 35,00,000, which is 77.8% of the face value of the cultural products purchased by the said Nonindicted Party, and thereafter, run a credit business by selling the said Fin gift certificate number to the said provider, from July 28, 19, 2015,5.

On the grounds delineated below, the court below affirmed the first instance court's judgment that found the Defendant guilty of this part of the charges on the ground that the Defendant's above act constitutes a lending of money under the Credit Business Act.

① The Defendant posted several advertisements, such as “small-sum loans and cashing of small-sum settlement,” on the Internet car page, blobb, website, etc., and the clients paid gift certificates. The Defendant immediately wired money excluding fees out of the above settlement amount to the account in the name of the clients. In other words, the clients received gift certificates after paying the gift certificates.

② The purpose of the clients was not to immediately receive money from the Defendant, rather than to purchase gift certificates, and the Defendant was also to deliver money to the clients after deducting some of the fees through the above method.

③ The Defendant had the clients purchase gift certificates through the mobile phone settlement, and then remitted only part of the settlement amount to the clients, and the clients should pay the full amount of the settlement amount on the date of the mobile phone payment. As such, the Defendant borrowed the money from the Defendant with the interest deducted from the advance interest and must pay the full amount of the principal after approximately one to two months.

E. However, in light of the above legal principles and the circumstances acknowledged by the record, it is difficult to view that the Defendant’s purchase of gift vouchers at a discount stated in the facts charged by the clients and the delivery of money with the price is equipped with the above conceptual elements of the loan, and thus, it cannot be deemed as “loan of money” subject to the Credit Business Act. The more detailed reasons are as follows.

(1) The Defendant issued money after deducting certain discount fees to the clients, and received merchandise coupons in the judgment of the court of first instance in return for this money. These merchandise coupons appear to be a kind of securities in which the holder claims to receive goods or services equivalent to the face value of such merchandise coupons by presenting or delivering them to the issuer or to a specific person designated by the issuer.

② The Defendant appears to have actually purchased gift certificates from the clients. It is reasonable to view that the purchase of the said gift certificates between the Defendant and the clients constitutes a sale and purchase, and that the relationship between the Defendant and the clients is terminated by having the Defendant transferred the PIN number from the clients and paid the purchase price of the gift certificates at discount. After the issuance of money, the Defendant did not acquire any right to the clients, including the claim for return of the price, etc., and the clients do not bear any obligation against the Defendant. There is no circumstance to deem that the Defendant, while delivering the money to the clients as the price for the gift certificates, determined the amount equivalent to the face value of the gift certificates in cash or provided the said gift certificates as security.

③ Although gift certificates that the Defendant purchased at a discount as seen above are the kind of securities as seen earlier, the right embodied therein is the right to receive goods or services corresponding to the face value. The Defendant disposes of gift certificates to third merchandise coupon distributors at a higher price than the purchase price of the said gift certificates, thereby obtaining the payment, or the clients make the payment of the purchase price of the gift certificates later against the provider of telecommunications billing services, such as mobile communications companies, etc., and the Defendant’s payment of the purchase price of the gift certificates to the clients cannot be assessed as being paid directly or through a third party from the clients.

④ Therefore, it cannot be deemed that the Defendant offered credit to the clients by purchasing gift certificates at discount from the clients, on the premise that the Defendant would receive a refund of the above gift certificates price in the future.

F. Nevertheless, the lower court found the Defendant guilty of this part of the facts charged on a different premise. In so determining, the lower court erred by misapprehending the legal doctrine on the interpretation of lending money under the Credit Business Act, contrary to what is alleged in

2. The violation of the Act on Promotion of Information and Communications Network Utilization and Information Protection, Etc. (hereinafter “Information and Communications Network Act”)

On the grounds indicated in its reasoning, the lower court found the Defendant guilty of violating the Information and Communications Network Act among the modified facts charged. Examining the reasoning of the lower judgment in light of the relevant legal doctrine and the evidence duly admitted, the lower court did not err by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules, or by misapprehending the legal doctrine on the interpretation of “goods, etc.”

3. Scope of reversal

Of the judgment below, the part of violation of the Credit Business Act should be reversed, and since the part of violation of the Information and Communications Network Act, which the court below found guilty, was sentenced to a single punishment on the ground that there is concurrent crimes under the former part of Article 37 of the Criminal Act

4. Conclusion

Therefore, the judgment of the court below is reversed, and the case is remanded to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Park Sang-ok (Presiding Justice)