Fair Trade Commission Fines Yanadoo 5 Million Won for False and Exaggerated Scholarship Claims

Calculation of Advertising Figures Without Objective Standards
Luring Consumers Through Deceptive Means

The Fair Trade Commission announced on January 4 that it has decided to issue a corrective order and impose a fine of 5 million won on Yanadoo, an online education company, for disseminating false or exaggerated information regarding scholarships while selling online English lecture products.

According to the Fair Trade Commission, Yanadoo is accused of violating the Act on Consumer Protection in Electronic Commerce, etc., by luring consumers through deceptive means. From December 2023 to November 2024, Yanadoo posted a notice on the main page of its online mall stating, "Already surpassed 8.8 billion won! As many as 160,000 people have received scholarships," without explaining the calculation period for these figures.

Yanadoo Advertisement. Fair Trade Commission

Presenting Scholarship Applicants as Recipients

Yanadoo was able to prove the legitimacy of the 8.8 billion won figure by providing supporting data for each scholarship program. However, the 160,000 figure was found to refer not to actual scholarship recipients, but to the number of people who attempted the scholarship program. Furthermore, there was little or no explanation regarding the cumulative period used to calculate the 8.8 billion won and 160,000 figures, which constituted a deceptive practice that misled consumers.

Since May 2014, Yanadoo has operated a system in which students who complete certain tasks, such as attending lectures or writing reviews, are awarded scholarships when purchasing online English lecture products. However, since December 2023, Yanadoo has disseminated false information regarding the effectiveness and amount of the scholarships. The Fair Trade Commission determined that Yanadoo's promotional statement, "Already surpassed 8.8 billion won! As many as 170,000 people have attempted the scholarship program (as of October 2024)," led many recent consumers to believe that a large number of people were attempting to obtain scholarships and that they themselves could realistically expect to receive one.

"Completion Rate Also Deceptively Presented"

The Fair Trade Commission also pointed out that Yanadoo posted a graph stating, "The completion rate of students attempting the scholarship program is three times higher than that of students who only attend lectures," but failed to clarify that this effect was observed only in the full-refund scholarship program, misleading consumers into thinking it applied to all scholarship programs. The Commission added, "We will continue to monitor violations of the Electronic Commerce Act by online English lecture providers that hinder rational consumer choices, and will take strict action whenever violations are detected."