"'Merge Point Incident' Class Action Lawsuit, First Trial on the 1st of Next Month"

Victims Side: "Not Only MergePlus and Its CEO, but Also E-commerce Companies Are Responsible"

On August 13 last year, subscribers demanding refunds gathered at the headquarters of the payment platform company 'Merge Point' located in Yeongdeungpo-gu, Seoul.
[Image source=Yonhap News]

[Asia Economy Reporter Kim Daehyun] The first trial of the class-action lawsuit filed by victims who suffered losses due to the 'large-scale refund crisis' of Merge Point will be held on July 1. It has been about 10 months since the initial complaint was filed.

According to the court on the 29th, the Civil Division 22 of the Seoul Central District Court (Presiding Judge Jung Jaehee) will hold the first hearing on the damages claim lawsuit filed by 144 victims of the Merge Point incident against Merge Plus and others on the afternoon of the 1st of next month.

No Youngsil, a lawyer from Law Firm Justice representing the victims, said, "The detention period of Kwon Namhee, the 38-year-old CEO of Merge Plus, and his sibling, who are currently on trial at the Seoul Southern District Court, is running out. Once the criminal trial, where a compensation order has been requested, concludes, it will soon affect the civil trial as well."

This lawsuit concerns the victims initially recruited who filed the complaint in September last year. They filed the lawsuit demanding about 226.8 million KRW in compensation for unused Merge Point balances, purchases of Merge Plus services, and damages for mental suffering. Including additional class-action filings, the total number of plaintiffs participating is about 450, with a total claim amount of approximately 580 million KRW.

The victims are holding Merge Plus, Merge Support Co., CEO Kwon's side, as well as e-commerce companies such as Lotte Shopping, 11st, eBay Korea, Style C Corporation, Wemakeprice, and Tmon jointly responsible. The claim is that they suffered damages due to the fault of e-commerce companies that sold gift certificates and subscription service vouchers without properly verifying the business structure of Merge Plus, which lacked repayment ability.

On the other hand, the e-commerce companies deny responsibility. They argue that as sales intermediaries, they are not liable for damages that the seller should bear, and that the contracted company was not Merge Plus but the company (Consa) that issued brand gift certificates for marts and convenience stores.

Merge Point was a payment service launched with the slogan 'Unlimited 20% discount.' It grew to 1 million users and a monthly transaction volume of 30 to 40 billion KRW, but in August last year, it suddenly announced the suspension of point sales and reduction of usage locations, triggering a flood of refund demands from users. Subsequently, CEO Kwon and his sibling were arrested and indicted in January on charges including fraud and violation of the Electronic Financial Transactions Act.