LINE Pocket Money operating company ordered to improve business operations, violating Money Lending Business Law due to system flaws
Tokyo Metropolitan Government takes administrative action for violation of Money Lending Business Act due to system flaw, LINE Credit apologizes
Quick Look
On the 18th, LINE Credit, which handles personal loans, announced that it had been administratively punished by the Tokyo Metropolitan Government with a business improvement order for violating the repayment ability investigation obligation under the Money Lending Business Act due to system flaws.
AI-generated summary
Why It Matters
The Money Lending Business Act requires the submission of income proof documents and a repayment ability investigation if the loan balance exceeds 1 million yen.
On August 18, LINE Credit (Shinagawa-ku, Tokyo), which operates the personal loan service ``LINE Pocket Money,'' announced that it had received an administrative action from the Tokyo Metropolitan Government with a business improvement order. Due to system deficiencies, the company was said to have violated the Money Lending Business Act's obligation to investigate repayment ability and prohibition on excessive lending. The company apologized, saying, ``We have caused a situation that has caused significant inconvenience and concern.''
If a customer's total loan balance exceeds 1 million yen, money lenders are required to submit documents proving their income, such as withholding tax slips. However, the company concluded contracts without receiving documents from some customers. In addition to entering into contracts that amounted to excessive lending, which is prohibited under the Money Lending Business Act, there were also cases in which credit information checks of existing policyholders were not properly conducted as required by law.
The Tokyo Metropolitan Government ordered the company to develop a system to ensure legal compliance, a monitoring system to identify system deficiencies in a timely manner, and a business management system to make these systems work.
After confirming the violation, the company resolved the system glitch and investigated similar cases. As measures to prevent recurrence, the company said it is working to establish a system to continuously monitor that there are no excessive loan contracts and that investigations into repayment ability are being conducted correctly, and to strengthen its governance structure.
LINE Credit is a money lender jointly invested by the LINE Yahoo Group, Mizuho Bank, and Orient Corporation (Orico). In addition to LINE Pocket Money, the company also offers ``LINE Score'', a scoring service for individuals, and ``J.Score Lending'', an unsecured loan.
What to Watch
AI outlook — possibilities, not facts
Submission of recurrence prevention measures and business improvement plans to the Tokyo Metropolitan Government
Very likely · Within weeks
Open Questions
- When did the system malfunction occur?
- The specific number of customers targeted for disposal is
