Korea Consumer Agency Investigates Three Major Service Brokerage Platforms
52.4% of Reported Damages Involve Daily Life Services Such as Cleaning and Interior Work
Consumers Urge "Urgent Need to Strengthen Seller Service Quality"
#A man in his 50s, referred to as Mr. A, commissioned an interior construction company through a service brokerage platform in June 2022 for work such as installing partition walls, wallpapering, door installation, and building a staircase for a loft. He paid 2.5 million won for the project. However, the construction company failed to fulfill the contract, not carrying out the door installation, wallpapering, or the carpentry work for the loft staircase. Mr. A demanded a full refund from the company but received no response.
The Korea Consumer Agency announced on the 31st that, according to its survey conducted from March 15 to April 30 with 500 consumers and 200 sellers, more than half of all reported damages on major service brokerage platforms (Soongo, Kmong, and Taling) were related to daily life services such as cleaning and interior work.
Over the past three years, there have been a total of 498 consumer damage cases related to service brokerage platforms filed for dispute resolution with the Korea Consumer Agency: 93 cases in 2022, 156 in 2023, and 249 last year, showing an annual increase. When examining the specific categories of damages, "daily life services" accounted for 52.4%, making up more than half of all cases. This was followed by "video, photography, and audio" at 14.5%, "lessons and lectures" at 8.7%, and "IT and programming" at 5.6%.
Within the daily life services category, damages related to "cleaning services" were the most common at 17.5%. "Interior services" followed closely, accounting for 16.3% of cases.
Consumers identified "strengthening the verification of sellers' service quality" (30.2%) as the most urgent area for improvement. The three platforms currently provide information such as certifications, work experience, portfolios, number of transactions, and user reviews through their seller information boards. However, unlike standardized goods, it is difficult to predict the quality of services, so quality-related damages continue to occur.
Additionally, 11.6% of respondents stated that "improvements are needed in the management of seller identity information." Currently, all three platforms either do not provide some seller information or do not offer a way to access it, indicating a need for improvement. According to Article 20, Paragraph 2 of the Electronic Commerce Act, platforms are required to provide information such as the seller's phone number or a method to access such information.
The platforms' role in resolving disputes between buyers and sellers was found to be limited. Of the 498 cases filed with the Korea Consumer Agency, 62.2% remained unresolved, and only 13.3% of resolved cases were settled with the platform's involvement.
Meanwhile, the seller brokerage commission rates for the three platforms were found to be 3.0-9.9% of the sales amount for Soongo, 4.4-16.4% for Kmong, and 11-20% for Taling. The commission rates varied depending on the sales amount and other criteria.
However, both Kmong and Taling deduct additional costs from the seller's earnings when settling payments, on top of the brokerage commission. As a result, the total commission rate actually borne by sellers was found to range from a minimum of 8.5% to a maximum of 21.7% for Kmong, and from a minimum of 19.1% to a maximum of 27.3% for Taling.
Based on the results of this survey, the Korea Consumer Agency recommended that platform companies: strengthen procedures for verifying sellers' service quality; provide contact information and other details about sellers; establish standards for consumer complaints and dispute resolution; and adjust brokerage commissions to foster mutually beneficial cooperation among platform users.
A representative from the Korea Consumer Agency advised consumers, "Draw up a contract that includes the details of the work, completion date, and terms regarding cancellation, refunds, and after-sales service. When dealing with individual sellers, be aware of the potential difficulty in resolving issues, verify the seller's information, and proceed with caution."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
