Lee Chanjin: "Significantly Strengthening Consumer Protection, Financial Firms Neglecting Duties May Be Expelled" (Comprehensive)

Financial Supervisory Service Holds Resolution Meeting to Strengthen Financial Consumer Protection for All Executives and Staff
Governor Lee Chanjin: "FSS to Be Completely Restructured as a Consumer Protection Organization"
National Report to Be Held Next Year Following Organizational Restructuring

Employees of the Financial Supervisory Service held a "Resolution Meeting to Strengthen Financial Consumer Protection for All Executives and Staff" on the afternoon of the 29th at the Financial Supervisory Service headquarters in Yeouido, Yeongdeungpo-gu, Seoul. Photo by Financial Supervisory Service

The Financial Supervisory Service has decided to elevate the Financial Consumer Protection Bureau to the Financial Consumer Protection Headquarters, focusing its resources on financial consumer protection. A new "Financial Consumer Protection Committee" directly under Governor Lee Chanjin will also be established to oversee institutional improvements and inspections related to consumer damage incidents, such as the recent losses from Hong Kong equity-linked securities (ELS). The Financial Supervisory Service warned that it would use all available sanctions permitted by current law to expel financial companies that neglect their consumer protection responsibilities from the financial market at any time.

Financial Supervisory Service Holds "Resolution Meeting to Strengthen Financial Consumer Protection"

Governor Lee stated this at the "Resolution Meeting to Strengthen Financial Consumer Protection for All Executives and Staff," held on the 29th at the Financial Supervisory Service headquarters in Yeouido, Yeongdeungpo-gu, Seoul. He said, "During the recent organizational restructuring discussions, we recognized that the Financial Supervisory Service's level of consumer protection does not meet public expectations."

Governor Lee announced a major organizational restructuring on this day. He pointed out that the Financial Supervisory Service's work has been somewhat skewed toward imposing sanctions for financial soundness, while consumer protection has mainly been reactive, addressing issues only after incidents occur. He pledged to reform this practice, rearming the Financial Supervisory Service with a "financial consumer protection DNA" and guiding financial companies to cooperate. He stated, "While we interact frequently with financial companies, we only engage with consumers when incidents occur, leading to an evident imbalance between the two."

By December, the Financial Consumer Protection Bureau will be elevated to the status of the Financial Consumer Protection Headquarters. This will allow for consistent handling of complaints, disputes, product reviews, supervision, and inspections across sectors such as banking, small finance, financial investment, and insurance. The Dispute Mediation Bureau under the Financial Consumer Protection Bureau will also be reorganized into regional headquarters. This aims to maximize synergy between the establishment of systems by the Bank Supervision Bureau, regular and ad-hoc inspections conducted by the Bank Inspection Bureau, and the existing consumer complaint handling and dispute mediation work of the Financial Consumer Protection Bureau.

A Financial Consumer Protection Committee directly under the Governor will also be established by December. This is to ensure that consumer opinions are significantly reflected in all major institutional improvements and inspection matters.

After the resolution meeting, the Financial Supervisory Service launched the "Financial Consumer Protection Planning Team" under Senior Deputy Governor Lee Sehoon. The planning team, which will operate until December, will support the practical work of the committee directly under the Governor. The existing "Task Force for Strengthening Financial Consumer Protection" under Deputy Governor Hwang Seonoh for Planning and Strategy has been expanded and reorganized.

The "Comprehensive Civil Crime Response Team" under Deputy Governor Kim Sungwook for Civil Financial Affairs will also be activated. The team’s personnel and organization will be strengthened to comprehensively and systematically respond to financial crimes affecting the public, such as illegal private financing, voice phishing, and insurance fraud. Next year, a "National Report on Financial Consumer Protection Innovation" will be held. After completing the organizational restructuring, including the operation of the planning team and the elevation of the Financial Consumer Protection Headquarters, the Financial Supervisory Service plans to inform the public of the achievements and future direction of its innovation efforts.

Governor Lee emphasized that as the Financial Supervisory Service undergoes a major overhaul, financial companies must also actively cooperate in financial consumer protection. He said, "For financial companies that neglect their consumer protection responsibilities, we will impose strong sanctions such as fines and business suspensions to the fullest extent permitted by law, operating with the mindset that they can be expelled from the market at any time."

Senior Deputy Governor Lee Sehoon: "Strengthening Financial Consumer Protection Is Our Mission"

Meanwhile, Senior Deputy Governor Lee Sehoon stated at a press briefing after the resolution meeting that the results of the newly established Financial Consumer Protection Planning Team will be reflected in the year-end organizational restructuring. Based on the planning team's activities, a national report on financial consumer protection will be held in the first half of next year.

He said, "It is important to have organic cooperation among departments for consumer protection, and the Financial Consumer Protection Bureau, as the most senior department, must be able to oversee all work." He added, "The specific organizational structure will be announced after gathering opinions and consulting with relevant agencies."

He continued, "It is true that, having experienced several financial crises, we have prioritized market stability and soundness. However, going forward, our mission is to provide stable services to financial consumers and to establish infrastructure that safely protects their assets."

Regarding the issue of designating the Financial Supervisory Service as a public institution, he stated, "We will do our utmost to strengthen public interest and transparency in our consumer protection functions." He added, "Since there is a trade-off between enhancing public interest and transparency and maintaining independence, future discussions will be balanced accordingly."