Penalties for Card Kiting (Kaddeukkang)

What Is Card Kiting?

Card kiting (kaddeukkang) refers to the illegal practice of converting credit card limits into cash. Typically, it works by using a credit card to generate fake sales and then handing back the remaining amount in cash after deducting a fee. In the process, the cardholder is charged high interest paid in advance or steep fees, and ultimately ends up sinking deeper into debt.

Card kiting can take many forms and is mainly classified as gift-card kiting, meal kiting, corporate-card kiting, micropayment kiting, mobile-phone kiting, PayPal kiting, transit-card kiting, and more. These operators are set up so that they can offer card kiting services anywhere card payments are accepted.

Card kiting is an illegal act strictly prohibited by law, and using it is the same as taking part in illegal activity. It undermines law and order and can deepen the debt the cardholder has already run up.

For these reasons, card kiting is regarded as a financial crime, and everyone who uses it may be held legally liable. Because such conduct poses a serious threat to economic stability and social order, individuals and businesses should always aim for lawful and ethical financial transactions.

Why Card Kiting Is Illegal

Card kiting is defined as conduct strictly prohibited under Article 70 of the Specialized Credit Finance Business Act (여신전문금융업법). This provision strictly bans using a credit card to feign the sale of goods, concluding transactions in excess of the actual sales amount or acting as an agent for such transactions, and purchasing at a discount the goods or services that a cardholder was induced to buy with a credit card.

Under Article 70 of the Specialized Credit Finance Business Act, conduct such as card kiting may be punished by imprisonment for up to 3 years or a criminal fine of up to KRW 20 million. This law was enacted to maintain the accuracy and reliability of credit card transactions and to protect the safety of the financial system.

Card kiting is therefore strictly regulated by law, and anyone who engages in it may be held legally liable. One must always take care to comply with the legality and ethical responsibilities of financial transactions in order to maintain social order.

Card kiting is conduct strictly prohibited under Article 70 of the Specialized Credit Finance Business Act, and committing it can lead to imprisonment for up to 3 years or a criminal fine of up to KRW 20 million. Card kiting operators use illegal methods, generating false sales with a credit card and returning the remaining amount in cash after deducting a fee. These fees are generally known to range from 10% to 20% of the transaction amount, and in some cases the fee set is even higher.

Card kiting is regarded as an illegal act, and every individual and business involved in it may face severe punishment. This conduct is usually treated as an open secret, a tendency that is even stronger where there is a personal connection with the merchant who owns the card-accepting business. Because card kiting is seen as a tempting option for cardholders who urgently need cash, it is also known that many professional brokers are currently active among users.

Penalties for Card Kiting

Card kiting is conduct strictly prohibited under the Specialized Credit Finance Business Act, and committing it can result in imprisonment for up to 3 years or a criminal fine of up to KRW 20 million.

The Specialized Credit Finance Business Act

Under Article 70 of the Specialized Credit Finance Business Act, a person who commits any of the following acts may be punished by imprisonment for up to 3 years or a criminal fine of up to KRW 20 million.

This applies to: a person who provides financing, or who brokers or arranges such financing, by feigning the sale of goods or the provision of services, or by transacting with a credit card in excess of the actual sales amount or having another act as an agent for such transactions; a person who purchases at a discount the goods or services that a cardholder was induced to buy with a credit card; and a person who, in violation of Article 15, creates a pledge over a credit card.

Self-Defense: Requirements and Standards Explained

Self-defense means that even when an act would otherwise constitute a crime, no offense is established when the act is a defensive response to a danger threatening oneself or another person nearby. Self-defense is governed by Article 21 of the Korean Criminal Act. Article 21 (Self-Defense) (1) An act performed to defend one's own or another person's legal interest against a present and unjust infringement shall not be punishable where there are reasonable grounds for doing so. (2) Where a defensive act exceeds the proper degree, the punishment may be mitigated or remitted depending on the circumstances. (3) In the case of paragraph (2), where the act was committed out of fear, fright, excitement, or confusion at night or under other unsettling conditions, it shall not be punishable. Requirements for Self-Defense The requirements for self-defense are as follows: there must be an unjust situation of infringement, the infringement must be present, the act must be defensive..

Other Criminal Law May 8, 2025

Negligent Homicide: Elements, Types, Negligence, and Occupational Punishment

What is negligent homicide? Negligent homicide is the crime of causing a person's death through negligence. Article 267 of the Korean Criminal Act, which governs negligent homicide, reads as follows. Article 267 (Negligent Homicide): A person who causes the death of another through negligence shall be punished by imprisonment without labor for not more than 2 years or by a criminal fine not exceeding KRW 7 million. Types of negligent homicide are as follows: negligent homicide, occupational negligent homicide, and gross negligent homicide. Elements of negligent homicide: negligence in negligent homicide is governed by Article 14 of the Korean Criminal Act. The elements of negligent homicide are: 1. a situation caused by negligence; 2. causing the death of a person. Article 14 (Negligence): An act that fails to recognize the facts constituting the elements of a crime due to a failure to exercise the care normally required is punishable only when there is a special provision in the statute. The elements of a negligence offense are: 1. breach of an objective duty of care; 2. the elements constituting the crime..

Other Criminal Law April 22, 2025

Destruction of Property: Types and Elements of the Offense

Destruction of property refers to the act of impairing the utility of another person's property, documents, or special media records such as electromagnetic records by damaging, concealing, or otherwise affecting them. A person who commits destruction of property is subject to imprisonment for up to 3 years or a criminal fine of up to KRW 7 million. Types of destruction of property The types of destruction of property are as follows. Destruction of property, etc.: A person who impairs the utility of another's property, documents, or special media records such as electromagnetic records by damaging, concealing, or other means is subject to imprisonment for up to 3 years or a criminal fine of up to KRW 7 million. Destruction of a structure for public use: A person who destroys a structure used for the public benefit is subject to imprisonment for up to 10 years or a criminal fine of up to KRW 20 million. Aggravated destruction: Where a person commits either of the above two offenses and thereby endangers the life or body of another, the person is subject to imprisonment for not less than 1 year...

Other Criminal Law March 27, 2025

Suspended Sentence (Probation): Requirements, Effects, Criminal Record, Invalidation, and Revocation

What is a suspended sentence? A suspended sentence (probation) is a system in which the court imposes a sentence but delays its execution for a set period; if that period passes without incident, the pronouncement of the sentence loses its effect and the sentence is not carried out. It can be described as a system that opens a path for the defendant to return to society on their own without serving the sentence. For example, if you receive a sentence of 1 year of imprisonment suspended for 2 years, the 1-year prison term is extinguished provided you commit no offense during the 2-year period. The requirements for a suspended sentence are as follows: when imposing a sentence of imprisonment or imprisonment without labor of 3 years or less, or a criminal fine of KRW 5 million or less; grounds worthy of mitigating consideration; and that the offense was not committed within the period running up to 3 years after a judgment imposing imprisonment without labor or a heavier sentence became final and its execution was completed or remitted. The sentencing threshold for a suspended sentence is 3 years or..

Other Criminal Law January 22, 2025