"Can't Loan Repayment Be Deferred?"... Financial Complaints Up 15% in Q1 Due to COVID Impact

[Asia Economy Reporter Kim Hyo-jin] Financial complaints submitted to the Financial Supervisory Service (FSS) have noticeably increased this year.

The FSS announced on the 23rd that financial complaints in the first quarter of this year totaled 22,121 cases, a 14.8% (2,855 cases) increase compared to the first quarter of last year.

By sector, complaints related to banks increased by 25.2% (579 cases) to 2,876 cases. Economic difficulties due to COVID-19 and successive incidents such as delays in private equity fund redemptions led to a significant rise in complaints related to loans, bancassurance (insurance sold through banks), and funds.

There were particularly many complaints requesting loan repayment deferrals and principal and interest reductions, as well as issues raised regarding inconveniences and delays in processing due to the downsizing of sales organizations and call centers.

Complaints in the small and microfinance sector increased slightly by 0.3% (13 cases) to 4,165 cases. While complaints against installment finance companies, credit card companies, and credit information companies decreased, complaints related to credit unions and loan providers increased by 179 and 81 cases, respectively.

Complaints related to life insurance rose by 15.0% (723 cases) to 5,530 cases. Complaints about insurance solicitation, such as claims of insufficient product explanations, increased by 41.3%, standing out relatively.

By type, complaints related to insurance solicitation accounted for the largest share at 53.7%, followed by complaints about insurance claim calculation and payment at 17.3%, and exemption and liability-related complaints at 10.8%.

Complaints related to non-life insurance increased by 12.1% (851 cases) to 7,862 cases. While most types of complaints increased, complaints related to insurance claim calculation and payment and exemption and liability decisions increased by 506 and 200 cases, respectively.

By type, complaints about insurance claim calculation and payment were the most common at 43.0%, followed by complaints about contract formation and cancellation at 10.2%, insurance solicitation at 7.7%, and exemption and liability decisions at 6.2%.

Complaints related to financial investments totaled 1,688 cases, a 69.0% (689 cases) increase compared to the first quarter of last year.

Complaints related to securities companies surged by 78.6% (517 cases) to 1,175 cases. This was largely due to a significant increase in complaints related to funds and trusts, influenced by delays in private equity fund redemptions.

By type, complaints related to securities companies were led by fund-related complaints at 21.2%, followed by internal control and system failure complaints (18.4%), stock trading complaints (14.5%), trust-related complaints (4.7%), and derivative product complaints (4.0%).

The FSS processed a total of 20,101 complaints in the first quarter of this year. Compared to the first quarter of last year, the number of processed cases increased by 6.3% (1,189 cases).

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