"Watch Until the Next Payment Date"... OTT Mid-Term Cancellation Refund Not Informed

Separate procedures such as phone calls required to refund remaining usage fees
Need to establish compensation standards including overpayment refund criteria
7 out of 10 consumers say "Usage fees are too expensive"

It has been revealed that consumers who want to cancel their subscription to online video streaming services (OTT) mid-term and receive a refund for the remaining usage fees have to go through separate procedures such as phone or chat consultations, causing considerable inconvenience. Additionally, some OTT providers have been criticized for insufficient specific compensation standards regarding overpayment refunds and service disruptions, indicating a need for improvement.

On the 8th, the Korea Consumer Agency announced that these findings were confirmed through a joint investigation with the office of Min Byung-duk, a member of the Democratic Party of Korea, into the service status of the top domestic OTT providers by usage rate. The six OTT providers surveyed were YouTube, Netflix, TVING, Coupang Play, Wavve, and Disney Plus.

According to the investigation results, all six OTT providers allow online cancellations but did not properly inform consumers that immediate mid-term cancellation or refunds for remaining usage fees were possible. All services were maintained until the next payment date, and contracts were terminated without refunds. From the consumer's perspective, to receive a mid-term cancellation or refund for remaining fees, they had to use separate procedures such as phone or chat consultations. In particular, Netflix’s terms and conditions stated that mid-term cancellations and refunds were not provided if 7 days had passed since the payment date.

Due to these inconveniences, consumer consultations have continued to occur. An analysis of 1,166 OTT-related consumer consultations received by the 1372 Consumer Counseling Center over the past three years (2021?2023) showed that inquiries related to contract cancellations, terminations, and penalties accounted for the largest portion at 47.0% (344 cases). Unfair charges or duplicate subscription fee billing followed at 28.9% (211 cases).

Looking into consumer consultations, there were cases where the original account holder was charged fees twice due to subscribing to OTT bundled products from mobile carriers or where fees were charged even after the contract was terminated. Overpayments should be refunded excluding fees incurred for the refund process, but some providers (3 companies) did not have terms and conditions regarding the refund methods and procedures for overpayments. Furthermore, in consumer consultations about service disruptions, some providers (4 companies) did not provide specific guidelines on compensation standards for service interruptions or failures.

Consumers also felt that OTT subscription fees were expensive. In an online survey conducted by the Korea Consumer Agency targeting 1,200 OTT users aged 19 and older, 68.3% (820 respondents) answered that they felt this way. They reported using an average of 2.4 paid OTT services and paying an average of 20,348 KRW per month for them. The Consumer Agency also pointed out that while YouTube applies discounted plans such as student memberships overseas, it operates only a 'Premium single plan' domestically, suggesting that introducing discounted plans in Korea could expand consumer choice.

Based on the investigation results, the Consumer Agency recommended OTT providers to ▲guarantee and strengthen guidance on mid-term cancellation rights ▲guarantee overpayment refunds and establish related terms and conditions ▲specify consumer compensation standards ▲consider introducing discounted plans.

Representative Min said, "We will continue to strive to create a consumer-friendly digital content market."