Compensation Includes Deduction of Repair Costs for Broken Cell Phones

On the 10th, the 'Galaxy S22' was exhibited at the Samsung Electronics Delight Shop in Seocho-gu, Seoul. On this day, Samsung Electronics held an Unpacked event and unveiled the new product 'Galaxy S22 series.' It is sold in three models: the standard Galaxy S22, the large-screen mid-range Galaxy S22+, and the phablet high-end Galaxy S22 Ultra equipped with an S Pen. Photo by Moon Honam munonam@

[Asia Economy Reporter Lim Hye-seon] The Korea Communications Commission (KCC) has initiated improvements to the system so that even broken smartphones can be compensated after deducting repair costs. The minimum compensation rate will be raised to over 30%, and the range of eligible devices will be expanded.

On the 15th, the KCC announced that it had prepared a plan to improve the 'Used Phone Compensation Program' based on these points. The used phone compensation program is a service that guarantees up to 50% of the original price of the existing device when purchasing a specific device on a 48-month installment plan and then buying a new device from the same manufacturer through the same carrier after 24 months. Since September last year, the KCC has operated a research group with the three major carriers and, as a result of discussions, prepared a plan to improve the system focusing on enhanced notifications, expanded compensation rates and eligible devices, clarified compensation criteria, and improved procedures.

First, the KCC improved the strict compensation conditions and standardized the compensation criteria. Under the current program, even when compensation is possible after repair, users were informed that returns were not allowed (no compensation), or if some functions of the device were damaged, users had to return the device after repair to exercise their rights. Now, users who wish to return the device after repair can, in principle, receive compensation after deducting repair costs, except in cases where repair is impossible due to unauthorized modifications or unverified phone information.

User benefits have also been increased. The minimum compensation rate will be set at 30% or higher, and the devices eligible for selection when exercising rights will be expanded. The compensation program is structured so that after 24 months, the compensation amount decreases monthly until 36 months, at which point the compensation amount becomes zero in the third year. There were issues where users could not select other devices due to restrictions on eligible devices when changing devices to exercise rights, or when the device was discontinued or its release delayed, causing delays in exercising rights and a reduction in compensation.

Additionally, users can receive compensation not only when selecting the same type of device but also when choosing different types of devices upon exercising their rights. Although there are differences depending on existing contract terms, the three major carriers plan to expand the range of selectable devices and apply this retroactively to existing subscribers as much as possible.

The user notification process will also be strengthened. The product description in the subscription application form is densely written in small print, making it difficult for users to properly understand key points, and explanations at distribution sites have been insufficient, leading to continuous complaints and grievances from users who misunderstood subscription and compensation conditions. Therefore, key information such as compensation conditions and rates that users must know at the time of subscription will be selectively displayed in bold letters at the top of the subscription application form, explained verbally, and a signature will be obtained to strengthen user notification.

The KCC explained that this measure was taken in response to ongoing complaints about insufficient explanations of the product content and actual benefits of the used phone compensation program at distribution sites, and criticisms that the compensation conditions are too strict and unfavorable to users. The improvement plan will be applied starting with the Galaxy S22, which will be pre-launched on the 22nd.