Bankruptcy Notification Sent by Text Message Without Prior Notice of Business Difficulties
Parents File Criminal Complaint Against CEO... Separate Compensation Lawsuit Also Being Prepared
The online tutoring platform 'Topclass Edui' has suddenly declared bankruptcy. However, there are concerns about the impact, as instructor wages and tuition refunds have not been properly processed.
On May 18, Maeil Business Newspaper reported that Topclass Edui recently announced, "Due to ongoing business deterioration, we are inevitably ceasing operations."
The company added, "We sincerely apologize to all students and parents, and we will do our best to minimize the damage."
Previously, on May 15, Topclass Edui abruptly notified instructors and parents of its bankruptcy via text message. It is reported that there was no prior official communication about the worsening business situation or instructions on how to receive refunds.
Topclass Edui, founded in 2018, is an online video tutoring company that promoted instructors from prestigious universities and employs about 20 staff members.
Shin, CEO of Topclass Edui, told Maeil Business Newspaper on May 17, "The business difficulties have continued for several years." According to Shin, tuition fees have remained the same as 10 years ago, but the number of instructors has increased, and as more competitors have emerged, fixed costs and advertising expenses have also risen.
As a result, on May 16, parents filed a criminal complaint against CEO Shin with the Seodaemun Police Station in Seoul, accusing Shin of fraud and other charges.
According to the complaint, more than 340 victims, including parents and students, claim damages exceeding 1 billion won due to the bankruptcy of Topclass Edui. Unpaid wages for about 300 instructors for April and May are also said to amount to approximately 150 million won.
In addition to filing the complaint, parents and others are also preparing a joint legal action demanding compensation for the damages.
Previously, in March 2024, another online video tutoring company declared sudden bankruptcy after encouraging consumers to make long-term payments, resulting in damages amounting to hundreds of millions of won.
According to the Korea Consumer Agency, as of 2024, there have been over 3,000 requests for relief related to internet education services in the past five years. In particular, there were 947 cases in 2023, which is an increase of nearly 60% compared to 592 cases in 2022.
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