"70.1 Billion KRW of Mileage Expired from 3 Major Telecoms Over 5 Years... Membership Improvement Needed"

Assemblyman Park Wan-joo "171 Billion Won of Remaining Mileage Must Be Refunded"

Park Wan-joo, member of the National Assembly Science, Technology, Information and Broadcasting and Communications Committee

[Asia Economy Reporter Oh Su-yeon] Concerns have been raised in the National Assembly that the mileage systems operated by the three major telecom companies under the 2G and 3G metered rate plans should recognize consumers' property rights and provide refunds.

On the 25th, Park Wan-joo, a member of the National Assembly's Science, Technology, Information and Broadcasting and Communications Committee, pointed out, "The membership system, which is provided and operated as compensation for contracted communication fees, significantly infringes on consumers' rights," and urged the three telecom companies to improve the system to protect consumers.

The three telecom companies have operated mileage systems that accumulate points based on consumers' monthly payments, which can be used to pay for communication fees, device repairs, and some content usage fees. However, the mileage system was only operated for 2G and 3G metered rate plans, and for the LTE and 5G plans launched later, a membership system with a one-year validity period was applied depending on the contract period, communication fees, and delinquency status.

According to data submitted by the three telecom companies to Park Wan-joo's office, over the past five years, unused and expired mileage amounts to 35.1 billion KRW for SKT, 11.7 billion KRW for KT, and 23.3 billion KRW for LGU+, totaling 70.1 billion KRW. Remaining mileage was also confirmed to be 14.1 billion KRW.

Park also raised issues regarding the membership system. He pointed out, "The problem is that the three telecom companies claim that the membership system is a benefit provided free of charge to customers and a marketing tool, so unlike mileage, customers' property rights are not recognized," adding, "Moreover, the usage of membership points is restricted to their own shopping malls or some affiliated stores contracted with the telecom companies, and even the number of uses is limited to once per day or per month, greatly reducing consumers' rights."

According to a survey by the Korea Consumer Agency, the actual usage rate of membership points is only 40.7%, with nearly 60% unused and expired.

Park stated, "Considering that the main partners of telecom membership are movie theaters, amusement parks, restaurants, and duty-free shops, it is presumed that during the recent COVID-19 pandemic, consumers paid the same fees but were hardly able to use membership points with a one-year validity period," and added, "We requested membership status data from the three telecom companies, but they refused to submit it citing trade secrets."

Park emphasized, "Considering that a significant portion of 2G and 3G customers are elderly, the most urgent matter now is for telecom companies to promote refunds to consumers before the remaining mileage of 17.1 billion KRW expires." Regarding the membership system, he said, "Consumers find it difficult to cancel contracts during the contract period, and membership points are provided as compensation for communication fees during this period, so they should be regarded as consumers' property rights rather than telecom companies' benefits," and added, "Payment for fees should be added as a usage option for membership points, and restrictions on the number of discount uses at affiliated stores should be lifted."