Impact of DLF and Lime... 62% of Citizens Say "Financial Companies Do Not Make Efforts to Protect Consumers"

Financial Services Commission

[Asia Economy Reporter Kim Hyo-jin] A survey revealed that public perception of the government and financial companies' protection of financial consumers remains negative. In particular, nearly two-thirds of respondents expressed negative views toward financial companies.

The Financial Services Commission (FSC) announced the results of the "2019 National Survey on Public Perception of Financial Consumer Protection" on the 30th.

In a survey conducted last month by the FSC through Gallup Korea, targeting 1,045 people nationwide aged 19 to 69, 40.5% of respondents answered that the government does not make efforts to protect financial consumers. Those who answered that the government does make efforts accounted for 59.5%, which is a 3.4 percentage point increase compared to 2018.

When asked whether financial companies are making efforts to protect consumers, 62.1% responded that they are not. The percentage of those who answered that companies do make efforts was 37.9%, showing almost no improvement compared to 37.7% the previous year. The proportion of respondents who said companies make no effort at all was 13.9%, a slight decrease of 1.5 percentage points from 15.4% in 2018.

A majority of 73.0% of respondents believed that financial companies do not pay attention to customers after selling products. Many also thought that companies do not take responsibility when accidents or damages occur (75.7%) or that management is not interested in consumer protection (71.7%).

Regarding whether financial companies have sufficient ethical awareness, 73.9% answered that they do not. This is a 5.5 percentage point increase compared to 68.4% in 2018. The ongoing derivative-linked fund (DLF) and Lime Fund scandals since last year are considered to have influenced this perception.

Nearly half of respondents, 45.4%, said that financial authorities should play the most important role in consumer protection. A majority of 54.5% identified "fair and easy-to-understand terms and conditions" as the most crucial factor for consumer protection.

An overwhelming 80.5% said they have thought that financial companies' advertisements were distorted or exaggerated. This figure increased by 19.8 percentage points compared to the previous year.

Among respondents who have used complex and difficult-to-understand products within the last five years (34.8%), nearly half (43.1%) pointed out that sales staff gave only cursory explanations and prioritized obtaining signatures on documents. Among those who had loan experience during the same period (44.3%), 46.3% said the loan interest rate determination process was opaque.

Financial Services Commission

The FSC stated, "This survey confirmed that the majority of the public expects the government to play an active role in consumer protection," adding, "We will actively reflect these survey results in the process of establishing work plans, strengthening financial education, and enhancing support for vulnerable groups."

This content was produced with the assistance of AI translation services.