[2020 Financial Services Commission Work Plan] Debtors Directly Request Debt Adjustment from Financial Companies

Financial Services Commission to Promote Enactment of Consumer Credit Act... Establishment of Debt Adjustment Negotiation Business

[Asia Economy Reporter Haeyoung Kwon] The Financial Services Commission is promoting the enactment of the "Consumer Credit Act (tentative name)," which centers on the establishment of the "Right to Request Debt Adjustment" and the "Debt Adjustment Negotiation Business" to support the rehabilitation of debtors.

On the 19th, the Financial Services Commission announced in its "2020 FSC Work Plan" that it will completely revise the Loan Business Act, focusing on regulating the procedures and methods for managing individual delinquent claims.

The Consumer Credit Act will allow creditor financial institutions to support delinquent debtors on their own. It plans to introduce the right to request debt adjustment, which enables delinquent debtors to change repayment conditions and plans, and establish the debt adjustment negotiation business to support this. When a delinquent debtor requests debt adjustment, the financial company must immediately stop collection efforts and disclose whether it accepts the request.

Measures to limit the burden of delinquent debt will also be implemented, such as restricting the imposition of delinquency interest, collection, and sale of claims with completed statute of limitations.

The "Right to Request Contact Restriction" will also be included. This aims to suppress excessive collection and guarantee the debtor's normal life through the total collection volume system (limiting contact frequency), the right to request contact restriction, and statutory damages.

In addition, following the introduction of a simplified debt adjustment application via the Credit Recovery Committee's mobile application since December last year, the Commission plans to improve the special debt reduction system and repayment deferral system in the second half of this year.

The Financial Services Commission will also enhance financial accessibility for the elderly. It will activate mobile and unmanned branches and develop dedicated apps and customized educational content. It will strengthen regulations and sanctions on incomplete sales and establish a suspicious transaction monitoring system for exploitation of the elderly, as well as a system for delayed processing and reporting of suspicious transactions.

For the youth, it plans to alleviate housing and living expenses burdens by leasing vacant houses under the housing pension program and providing 100 billion KRW worth of Sunshine Loans this year. The system will be improved to allow small franchisees to receive part of their card sales proceeds on Saturdays and Sundays, addressing weekend operating fund shortages.

The Financial Services Commission will also work to eradicate illegal advertisements and voice phishing. It will introduce an automatic illegal advertisement extraction system, strengthen the responsibility level of financial companies when voice phishing damage occurs, and promote insurance products that guarantee compensation for voice phishing victims.

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