Last Year Financial Complaints Decreased by 3.5% YoY... Insurance Down, Banking and Securities Up

[Asia Economy Reporter Song Hwajeong] Last year, financial complaints decreased by 3.5% compared to the previous year, with complaints in insurance and non-bank sectors declining, while those in banks and securities increased.

According to the '2021 Financial Complaints and Consultation Trends' released by the Financial Supervisory Service on the 11th, financial complaints last year totaled 87,197 cases, a 3.5% decrease from 90,334 cases the previous year.

By sector, insurance and non-bank sectors showed a declining trend, whereas banks and securities, including financial investments, increased. The sectoral share was 58% for insurance (life insurance 21.1%, non-life insurance 36.9%), 17.3% for non-bank, 14.2% for banks, and 10.5% for financial investments, with the overall number of complaints decreasing due to the decline in insurance and non-bank sectors.

Banks recorded 12,382 cases, a 1.2% increase from the previous year. By complaint type, loan-related issues accounted for 27.2%, voice phishing 11.7%, deposits and savings 11.5%, bancassurance and funds 3.3%, and internet and phone banking 3.2%. Complaints related to loan extensions and interest rate reductions, which had increased in 2020 due to COVID-19 and the private equity fund incident, decreased. The Financial Supervisory Service analyzed, "Recently, as crime methods have become more sophisticated, including impersonation of family and acquaintances and approaches claiming to provide COVID-19 disaster relief funds or small business policy funds, complaints related to voice phishing have increased."

Non-bank complaints totaled 15,046 cases, a 12.1% decrease from the previous year. By industry, credit card companies accounted for the highest share at 35.5%, followed by loan companies at 18.4%, and credit information companies at 13.3%. Complaints decreased across all non-bank industries, but complaints related to electronic financial companies increased due to issues with Merge Point.

Life insurance complaints were 18,401 cases, a 15.0% decrease from the previous year. Major complaint types such as insurance solicitation, insurance claim calculation and payment, and liability determination decreased compared to the previous year. Non-life insurance complaints were 32,200 cases, showing a similar level to the previous year. Complaints related to insurance claim calculation and payment, and contract formation and cancellation increased, while liability determination and insurance solicitation complaints decreased.

Financial investment complaints increased by 19.2% to 9,168 cases. Complaints related to Home Trading System (HTS) and Mobile Trading System (MTS) malfunctions increased, with securities company complaints rising 7.5% to 5,212 cases. By industry, securities companies accounted for the highest share at 56.8%, followed by investment advisory firms at 35.7%, and real estate trust companies at 5.3%. The Financial Supervisory Service explained, "Complaints about securities company system failures increased by 112.7% to 2,323 cases compared to the previous year," adding, "As public offering stock investments became popular, many complaints arose demanding compensation for damages due to system processing delays caused by a surge in HTS and MTS access on the public offering stock listing day, preventing investors from selling stocks at their desired time."

By age group, those in their 30s had the highest complaint rate at 228.2 cases, followed by those in their 40s (167.5 cases), 50s (124.2 cases), 20s (108.3 cases), and 60 and above (83.3 cases).

The number of processed financial complaints was 85,929 cases, a 0.3% increase from 85,649 cases the previous year. The average processing period increased by 12.2 days to 41.2 days from 29.0 days the previous year.

A Financial Supervisory Service official stated, "With the enforcement of the Financial Consumer Protection Act (FCPA), financial complaints decreased by 3.5% compared to the previous year, and dispute complaints decreased by 5.1%," adding, "Along with the enforcement of the FCPA, numerous sales regulations were introduced, strengthening efforts for complete sales of financial products, and as a direct and indirect effect, the proportion of complaints related to incomplete sales decreased."