Consumer Agency Reports Increase After COVID-19... From 4 Cases in 2019 to 23 Cases in 2020
[Asia Economy Reporter Lim Chun-han] # Mr. A purchased a 100-hour time-based pass through a kiosk (unmanned terminal) at a study cafe in November last year and paid 130,000 KRW. In December of the same year, when he became subject to COVID-19 self-quarantine, he notified the cancellation of the contract and requested a refund for the remaining amount excluding the 10 hours already used. However, the business operator refused the refund citing a clause in the terms and conditions stating 'refunds are possible within 14 days from the contract date,' which had not been previously informed.
On the 11th, the Korea Consumer Agency announced that the number of damage relief applications related to study cafes in the year of the COVID-19 outbreak last year was 23 cases, a significant increase compared to 4 cases in 2019 and 3 cases in 2018. So far this year, 11 cases have been received up to February.
Among the 41 damage relief applications received since 2018, 92.7% (38 cases) were related to 'contract cancellations.' Most cases involved refusal of refunds or excessive penalty charges based on terms and conditions that were not previously disclosed. The age group of applicants was highest in their 20s at 56.1%, followed by 30s (31.7%), 40s (7.3%), and teens (4.9%).
An analysis of 34 cases where it was confirmed whether the terms and conditions were disclosed in advance showed that 91.2% did not receive information about refund conditions or similar terms during the payment process. Among those who did not receive such information, 93.5% paid via kiosk and 6.5% via bank transfer.
Regarding the types of passes in the 41 damage relief applications, 52.6% were for less than one month (including both time-based and period-based), and 43.9% were for one month or longer. The Consumer Agency advised that for period-based passes with contracts under one month, these do not fall under continuous transactions as defined by the Act on Door-to-Door Sales, etc., so it may be difficult to get a refund for the remaining amount if the contract is canceled midway. According to the Door-to-Door Sales Act, continuous transactions allow contract cancellation at any time during the contract period. However, if a time-based pass is contracted with a validity period of one month or longer, it qualifies as a continuous transaction, allowing contract cancellation with payment of a certain penalty.
The Consumer Agency urged consumers to check the validity period and refund policies of passes when making payments through kiosks.
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