373 Consumer Complaints in 3 Years... 7 Out of 10 Cases Involve Refund Refusals
Widespread Legal Violations: False Advertising and Failure to Provide Business Identification
Korea Consumer Agency: "Check Business Information and Refund Policies Carefully Before Signing a Contract"
#In May of last year, Mr. A watched a stock recommendation broadcast by a YouTuber, then paid 990,000 won to join a three-month paid membership. However, after suffering significant losses on the recommended stocks, he requested a refund one week later, but his request was denied. Following the refund request, he was blocked on Telegram and could no longer receive information.
On the 23rd, the Korea Consumer Agency announced that, after investigating 13 YouTube-based paid investment information providers, it found multiple issues requiring improvement, including false and exaggerated advertising promising high returns and failure to provide business identification information.
According to the Korea Consumer Agency, over the past three years (2022-2024), a total of 373 consumer counseling cases related to paid investment information on YouTube were reported to the 1372 Consumer Counseling Center. Of these, 75.6% involved cases where the business operator refused to terminate the contract.
Among cases of refusal to terminate or cancel contracts, the most common issue was 'delayed refunds' (88.7%), which resulted from businesses insisting on mandatory or minimum usage periods or ignoring consumers' intent to cancel. 'Non-fulfillment of contract,' such as being unable to contact the business operator, accounted for 8.9% of cases.
Some companies were found to engage in false or exaggerated advertising, such as claiming '100% guaranteed returns' or describing themselves as 'investment advisory firms that only deliver profits.' Of the 13 businesses investigated, 10 were subject to registration as similar investment advisory firms (for financial investment products). Among these, 7 were registered, 2 were unregistered, and for 1, registration status could not be verified. A representative from the Korea Consumer Agency stated, "According to the Financial Investment Services and Capital Markets Act, similar investment advisory firms are prohibited from making statements or advertisements that could mislead consumers into believing that losses will be covered or profits are guaranteed. Since investors are fully responsible for any investment losses, consumers should be careful not to trust advertising claims at face value."
It was also found that the provision of business identification information, such as the representative's name, address, and telephone number, was inadequate. All 13 businesses investigated provided insufficient information on their business name, representative's name, address, and telephone number, and 30.8% (4 businesses) did not provide any identification information at all. Among the 11 businesses required to register as telemarketing businesses, 45.5% (5 businesses) had not registered. According to the Act on Consumer Protection in Electronic Commerce, businesses selling investment information content on YouTube are required to register as telemarketing businesses and provide identification information. Without such information, it is difficult for consumers to respond to damages, such as by requesting contract termination or sending a certified mail notice.
The majority of consumers suffered damages during the 'contract termination' process. In a survey of 500 consumers who had experience using paid investment information via social media, 64.8% of respondents said their damages occurred during the process of terminating their paid investment information contract on social media. Among these, 29.9% said it was difficult to recover from damages due to the lack of business identification information, such as contact details.
The Korea Consumer Agency advised consumers to: ▲ carefully consider contracts and not be misled by exaggerated statements or advertisements, ▲ thoroughly check the business operator's identification information, and ▲ secure evidence in preparation for disputes when terminating contracts.
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