Disputes Over Credit Card Loss and Theft Revealed by Financial Supervisory Service
Full Compensation May Not Be Possible for Card Loss; Strict Management Required
Report Card Loss to the Credit Card Company Immediately
Person A lost their credit card in Thailand and suffered losses of approximately 6 million won due to unauthorized use. Person A demanded full compensation from the credit card company, but the company informed them that, according to its terms and conditions, only 80% of the amount could be compensated. Person A then filed a complaint with the Financial Supervisory Service, but the agency responded that it was difficult to recommend the company accept the complainant's demand, as the credit card company had calculated the customer's liability ratio at 20% in accordance with the 'Best Practices for Compensation in Cases of Card Loss·Theft.'
On May 19, the Financial Supervisory Service stated that financial disputes involving vulnerable groups with insufficient financial knowledge, such as in card usage and lease contracts, are increasing. The agency released major dispute cases and provided consumer advisories.
The Financial Supervisory Service explained that, in cases of credit card loss·theft, customers must report immediately to the card company. Compensation for unauthorized use may not be provided in full, depending on the degree of customer responsibility. The agency stressed that, under the Specialized Credit Finance Business Act and the Best Practices for Compensation in Cases of Card Loss·Theft, customers may also be liable for a portion of the losses, and thus should take special care in managing their credit cards.
Additionally, compensation only covers unauthorized use that occurs within 60 days prior to the date of reporting the loss·theft. Therefore, the Financial Supervisory Service emphasized that customers should report to the credit card company as soon as they become aware of the loss·theft.
In particular, for travel cards, which are not subject to the Specialized Credit Finance Business Act, customers should be aware that, unlike cards issued by card companies or banks, they may not be compensated for unauthorized use that occurs before the loss·theft is reported.
The Financial Supervisory Service also explained that, when purchasing goods in installments, it may be difficult to exercise the right to refuse payment of the remaining installments (installment defense right) if there is no contract or related documentation.
Person B entered into an expensive installment contract for services such as hair care. However, when the business failed to provide the services, Person B filed a complaint with the Financial Supervisory Service requesting to exercise the installment defense right. The agency responded that it was difficult to recommend acceptance of the complainant's demand, as there was no contract specifying the details of the installment agreement (such as the nature of the service and supply period), making it impossible to prove that the business did not provide the service.
The Financial Supervisory Service emphasized that consumers should retain the contract until the installment transaction is completed in case the installment merchant does not fulfill the contract properly, and that they should be prepared to exercise the installment defense right if necessary.
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