Democratic Party's Jeon Jae-su Proposes Bill for Up to Triple Compensation in Financial Accidents

Jeon Jae-su, Member of the Democratic Party of Korea./Photo by Yoon Dong-joo doso7@

[Asia Economy Reporter Park Cheol-eung] Jeon Jae-su, a member of the Democratic Party of Korea, jointly proposed a revision bill to the Financial Consumer Protection Act on the 13th amid a series of major financial accidents such as the private equity fund scandal.

The core of the bill is to introduce a ‘punitive damages system’ that allows consumers to claim compensation up to three times the amount of damages when consumer harm occurs due to the seller’s illegal acts.

The current law holds sellers liable for damages caused by their intentional or negligent acts. However, since there are no clear regulations on the amount of compensation, it was pointed out that it is insufficient to prevent violations of the law, which led to the proposal of this bill.

In particular, as large-scale financial consumer damages from the Derivative Linked Fund (DLF), Lime, and Optimus fund scandals have emerged as social issues, the need for a stronger consumer post-remedy system is growing.

The revision bill also expands the seller’s burden of proof, which is currently limited to ‘violation of the duty to explain,’ to ‘all violations under this law’ when claiming damages.

Representative Jeon said, “Because the level of sanctions such as fines imposed on businesses is insufficient compared to the expected gains sellers obtain from illegal acts, criminal activities continue unabated. We expect that the introduction of the punitive damages system will suppress violations of the law, promote the sound development of the financial industry, and at the same time provide practical help in restoring damages to affected consumers.”

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