Financial Supervisory Service Releases Major Complaint Cases on Loan Products and Credit Cards
Beware of Early Repayment Fee Surprises When Signing Loan Agreements
Mr. A received a call from a credit card company in 2022 offering monthly discounts at supermarkets and convenience stores, and he agreed without much thought. He recently discovered that 7,900 won had been withdrawn every month for three years, and when he requested a full refund, his request was denied.
Financial Supervisory Service Seoul Headquarters, Yeouido, Yeongdeungpo-gu, Seoul. Financial Supervisory Service
The Financial Supervisory Service released major complaint cases related to loan product selection and credit card services on September 7.
Like Mr. A, if you carelessly sign up for additional services from a credit card company, it may be difficult to get a refund. Do not agree in haste; make sure to listen to a full explanation of the product before deciding whether to enroll in paid additional services.
You can check your service subscription status and usage history through call centers, card statements, mobile applications, websites, and mail or mobile statements. If you wish to cancel, you can do so through the card company's app or website.
Abusing revolving payments (partial payment carryover agreements), long-term card loans (card loans), or short-term card loans (cash advances) can negatively affect your credit rating, so caution is needed.
Mr. B used the credit card revolving payment service. Revolving payment allows you to pay only part of your card bill and defer the rest to the following month.
Even in months when Mr. B's account balance exceeded the outstanding card bill, only a portion of the bill was withdrawn, and he had to pay high revolving fees. He requested a refund, but it was denied.
If a consumer wants to pay off the full balance while using the revolving payment service due to improved finances, they must make a separate request to the credit card company.
When using auto loans from capital companies, you should consider not only the interest rate but also the conditions for early repayment fees.
In April, Mr. C took out a 44 million won (four-year term) auto loan from a capital company and repaid the full amount one month later. During this process, he had to pay an early repayment fee of 792,000 won, which was higher than the accrued interest of 286,000 won. He filed a complaint, but it was not accepted.
When choosing a loan product, consumers should carefully review the early repayment fee rate, applicable period, and exemption conditions. After three years from taking out a loan, the early repayment fee is usually waived, but if you increase the loan amount in the meantime, the period is recalculated from the time of the increase, so caution is needed.
An official from the Financial Supervisory Service stated, "Many people experience difficulties with their credit rating due to impulsively signing up for card additional services or abusing card loan products. In addition, taking out a loan in a hurry can result in having to repay more money because of early repayment fees. Consumers should familiarize themselves with complaint cases and important considerations to prevent such damages."
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