Timon and Wemakeprice Refund Mediation Plan Prepared by Korea Consumer Agency
Industry Opposes Due to Legal Responsibility and Cost-Sharing Ratios
Consumers Must File Civil Lawsuits Against Companies Directly
Victims of the delayed settlement incident of Tmon and Wemakeprice (Timep) holding a rally in front of the Financial Supervisory Service in Yeongdeungpo-gu, Seoul, on August 25 last year. Photo by Yonhap News
If travel agencies and payment gateway (PG) companies refuse to accept the refund mediation plan prepared to resolve the Tmon and Wemakeprice (Timep) incident, the government will support a class action lawsuit by consumers next month.
On January 23, during an economic vice-ministerial meeting, the government announced the "Support Results and Future Plans for Response to the Wemakeprice and Tmon Incident," which includes these measures. Last July, the unsettled payments by Wemakeprice and Tmon resulted in 8,054 consumers who purchased travel products suffering damages totaling 13.5 billion won. Although the Dispute Mediation Committee of the Korea Consumer Agency has prepared a mediation plan, if the companies do not accept it, consumers must file civil lawsuits themselves. As court rulings could take several years, the government stated that it will introduce measures centered on supporting class action lawsuits next month.
Many travel agencies and PG companies are likely to reject the mediation plan. Both travel agencies and PG companies claim that the legal responsibility for refunds lies with the other party. They also oppose the plan that requires Timep to provide a 100% refund, and if not possible, for the seller and PG company to provide refunds, as well as the joint refund ratios set at up to 90% for sellers and up to 30% for PG companies. So far, only small lodging businesses have indicated their willingness to accept the plan, while most large travel agencies ranked in the top 10 of the industry have responded with their intention to reject it.
The mediation process for gift certificates will begin next month. There are a total of 13,000 cases subject to mediation, with damages amounting to 9.9 billion won. Once supplementary documentation and eligibility screening are completed, mediation will begin immediately.
For affected small business owners and SMEs, the government will also prepare supplementary measures, such as expanding the scope of financial support if necessary. Currently, the government is providing emergency management stabilization funds through 100.4 billion won from the Korea SMEs and Startups Agency and 46.5 billion won from the Small Enterprise and Market Service. In addition, support programs from Korea Credit Guarantee Fund and Industrial Bank of Korea, loan maturity extensions, and preferential terms for special re-challenge funds are also being offered.
Meanwhile, the government plans to prepare institutional improvement measures in the first half of this year, such as reviewing the appropriateness of settlement deadlines, to ensure that payments are made on time not only on online platforms but also in traditional retail businesses.
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