'Eoden Life,' a 'Good Sangjo' company that charged membership fees without registering as a 'prepaid Sangjo company'... Fair Trade Commission issues corrective order

[Sejong=Asia Economy Reporter Joo Sang-don] The first sanction has been imposed on a funeral service company that received partial payments from consumers in advance under the pretext of membership fees, etc., but failed to register as a prepaid installment sales business with the relevant local government.

On the 15th, the Fair Trade Commission (FTC) announced that it imposed a corrective order on Good Funeral Service Eden Life for operating without registering as a prepaid installment sales business and without concluding a consumer damage compensation insurance contract.

The consumer damage compensation insurance contract is an agreement to secure 50% of the amount received in advance from consumers with banks or mutual aid associations.

According to the FTC, Good Funeral Service Eden Life operated by signing contracts with 303 consumers from April 18, 2014, to June 3, 2019, charging a membership fee of 50,000 KRW and receiving the remaining amount after the funeral service.

Since such contracts fall under prepaid installment contracts, the company was required to meet conditions such as a capital of 1.5 billion KRW and register with the relevant local government, as well as conclude a consumer damage compensation insurance contract. However, Good Funeral Service Eden Life failed to comply with these requirements.

Accordingly, the FTC ordered Good Funeral Service Eden Life to register as a prepaid installment sales business and imposed corrective orders to prevent recurrence of similar acts. The corrective order also included a reporting order requiring the company to submit a plan to the FTC to operate only on a postpaid basis if it fails to meet capital requirements and cannot register as a prepaid installment sales business.

An FTC official stated, "Funeral service companies must register as prepaid installment sales businesses and strictly fulfill legal obligations whenever they receive partial payments from consumers in advance under any name such as membership fees, information provision fees, or card issuance fees. Through this action, we expect to raise awareness in the funeral service industry and eliminate blind spots in consumer protection."

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