The Increasingly Common Issue of 'Mis-sent Money' Every Year: Can It Be Recovered This Time? (Comprehensive)

Mistaken Remittances Increased by 18.1% Last Year Compared to the Previous Year
Even After Requesting Refunds, Lawsuits Are Needed for Resolution... Relief Law Gains Momentum

[Asia Economy Reporter Jo Gang-wook] The so-called 'Mistaken Remittance Act,' which helps recover money sent due to errors such as incorrect account numbers or amounts, is being discussed again in the 21st National Assembly. As non-face-to-face financial transactions like internet banking and mobile banking rapidly increase every year, mistaken remittances caused by incorrect input or recording of recipient financial institutions and account numbers are also on the rise.

Opposition Proposes 'Prior Recovery, Later Cost Settlement'

According to financial circles on the 14th, Seong Il-jong, a member of the People Power Party, introduced a revision bill to the 'Depositor Protection Act' on the 10th to address damages caused by mistaken remittances, a side effect of non-face-to-face financial transactions. Currently, when mistaken remittance occurs, the sender can request a refund through the financial company, but the problem is that refunds are not smoothly processed. In such cases, the sender can only recover the money through costly and time-consuming lawsuits, resulting in significant social costs.

The amendment to the Depositor Protection Act, proposed by Representative Seong, adds 'mistaken remittance damage relief work' to the scope of the Korea Deposit Insurance Corporation's duties. It stipulates that when mistaken remittance occurs, the unjust enrichment obtained by the recipient can be recovered, and the costs incurred for damage relief can be handled through a post-settlement method. The Korea Deposit Insurance Corporation, equipped with deposit-related infrastructure and expertise, can purchase claims for the return of unjust enrichment related to mistaken remittances and request voluntary returns by contacting recipients through information secured from financial companies and central administrative agencies.

Legal Basis Established to Induce Voluntary Returns

In particular, the bill establishes a legal basis to obtain the recipient's actual mobile phone number from telecommunications service providers to encourage voluntary returns rather than lawsuits. Under current law, financial companies cannot disclose the recipient's contact information to the mistaken remitter. Also, many contact details held by financial companies are not updated, forcing mistaken remitters to either give up recovery or resort to lawsuits.

The number and scale of mistaken remittances are steadily increasing. According to the Korea Deposit Insurance Corporation and the Korea Financial Telecommunications & Clearings Institute, the number of mistaken remittance transactions last year rose by 18.1% year-on-year to 158,138 cases, and the mistaken remittance amount increased by 8% during the same period to 320.3 billion KRW, marking an all-time high. From January to May this year, the number of mistaken remittance transactions reached 75,083 cases, and the amount was 156.7 billion KRW. These figures represent increases of 19.4% and 23.5%, respectively, compared to the same period last year. However, on average, only about half of the mistaken remittance amounts are recovered. The return rate of mistaken remittance amounts has remained around 49.0% in 2015, 45.2% in 2016, 53.3% in 2017, 49.8% in 2018, and 51.9% in 2019.

Ruling Party Also Proposes Bills... Growing Expectations

The Mistaken Remittance Act was also discussed in the 20th National Assembly. However, opposition arose on the grounds that 'the state solving individual mistakes could lead to moral hazard,' and the bill was not submitted to the National Assembly's Legislation and Judiciary Committee.

But the situation is different this time. Earlier in June, Yang Kyung-sook of the Democratic Party of Korea introduced a similar bill, followed by Yang Jeong-sook, an independent member, and Kim Byung-wook of the Democratic Party of Korea in July. Notably, the bills no longer include provisions for funding through state or financial company-provided funds, removing the biggest obstacle.

Half of Refund Claims Remain Unreturned

From 2017 to 2019, the official number of refund claims reached 407,375 cases, but more than half, 53.6%, were ultimately not refunded. Last year, there were 106,262 refund claims for mistaken remittances, with a claimed amount of 239.2 billion KRW, but unreturned cases numbered 58,105, with an amount of 120 billion KRW.

A financial industry official said, "Currently, if the other party does not return the mistakenly sent money after an incident, there is no option other than civil litigation," adding, "The litigation cost to recover a mistakenly sent 1 million KRW is about 600,000 KRW, and considering subsequent procedures like forced execution, costs increase further. Therefore, unless the amount is several tens of millions or hundreds of millions of KRW, it is difficult to take action, and many senders give up on lawsuits."

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