[One Month Since the Financial Consumer Protection Act] "I Still Don't Understand" Flood of Suggestions and Complaints

Among 68 Reported Issues, 19 Addressed... Authorities "Preparing Improvement Measures"
Industry "Prompt Sector-Specific Guidelines and Clear Interpretations Needed"

[Asia Economy Reporter Park Sun-mi] "Under the Financial Consumer Protection Act, when a consumer exercises the right to terminate an illegal contract, financial companies must notify acceptance or rejection within 10 days. When a long holiday like a traditional holiday is included, 7 out of the 10 days are holidays including weekends, leaving an extremely insufficient amount of time to prepare related tasks. Improvements are needed." - Bank A

"The Financial Consumer Protection Act applies the six major sales principles to all financial products in the process of implementing the principle of same function, same regulation. There is a need to subdivide the sales regulations applied as the same function across industries into regulations that consider the characteristics of each industry." - Card Company B

Since the Financial Consumer Protection Act was enacted (March 25), the industry has continuously raised difficulties and suggestions to the financial authorities for over a month.

The financial authorities state that they are promptly receiving and preparing improvement measures for industry suggestions and complaints through the Financial Consumer Protection Act Difficulty Resolution Subcommittee, but confusion in the field is not easily improving. Financial companies unanimously agree that prompt sector-specific guidelines and clear interpretations of ambiguous laws must be prepared, along with clause improvements reflecting the realities of work processing.

According to the financial authorities on the 19th, as of the 14th, there have been 68 difficulties and complaints related to the Financial Consumer Protection Act received through the rapid difficulty processing system. Among these, 19 cases have been completed, but 49 cases are still under review. A financial authority official said, "The number of cases received through the rapid difficulty processing system continues to accumulate," adding, "We operate under the principle of responding within 5 days to received suggestions, but due to COVID-19, work processing is difficult."

He continued, "We check the response status weekly and notify reasons and plans for delayed responses," and "We plan to additionally disclose received inquiries and explanatory materials on the dedicated online Financial Consumer Protection Act bulletin board soon."

Requests Related to the Financial Consumer Protection Act Flood Financial Authorities from Each Industry

The industry believes that detailed adjustments reflecting the situation of each sector are inevitable to calm the confusion occurring after the enactment of the Financial Consumer Protection Act. The banking sector has requested improvements to change the response deadlines for the ‘right to terminate illegal contracts’ and ‘right to request data inspection,’ which are currently based on calendar days, to business days.

Additionally, regarding the scope of fees that customers must return when exercising the right of withdrawal, only ‘stamp tax and other taxes and public charges’ and ‘registration costs due to mortgage registration’ are specified. There is also an opinion that the authorities should review allowing additional inclusion of fees related to collateral evaluation such as appraisal and patent value evaluation, and pledge registration fees, which banks must pay to third parties.

In the card industry, since the current burden of proof method for financial companies is based on the Electronic Signature Act, operating consumer verification authentication channels through card authentication or mobile phone identity verification is difficult. Therefore, there is a request to allow financial companies’ general electronic authentication channels through subordinate regulations. There is also a suggestion to subdivide the six major sales regulations into regulations that consider the characteristics of each industry.

The insurance and financial investment industries have many suggestions related to advertising regulations. These include how to distinguish between business advertisements and product advertisements, what must be mandatorily stated in advertisements, and to what extent the content of stock and bond product advertisements can include product details.

The financial authorities plan to prepare guidelines first in five areas where regulatory uncertainty felt in the field could cause consumer inconvenience: ▲improving the efficiency of investor suitability assessment ▲advertisement review ▲risk rating standards for investment products ▲methods for preparing product descriptions and key fact sheets to improve explanation efficiency ▲standard internal control standards and standard financial consumer protection standards. They will then collect voices from the field and add guidelines as necessary.