Private Equity Fund Scandal Drives 80% Increase in Financial Investment Complaints This Year Compared to Last Year

Trends in Financial Complaints from Q1 to Q3 2020
Surge in Bank and Securities Complaints Due to Private Equity Fund Scandal Impact

[Asia Economy Reporter Kim Hyo-jin] "I requested to sell stocks if the price per share was over 10,000 won, but even though the opening price the next day was above 10,000 won, the sell order was not executed."

"I bought German stocks at 43 euros through the securities firm's Mobile Trading System (MTS) and sold them the same day at a 1% loss, but a commission of 60 euros was charged. I was not informed about the minimum commission."

Complaints related to financial investments have significantly increased this year. This is interpreted as a result of more people engaging in various financial investments expecting high profitability amid the ongoing ultra-low interest rate environment.

According to the financial complaint trends for the first to third quarters of this year announced by the Financial Supervisory Service on the 10th, a total of 68,917 financial complaints were received in the first to third quarters, an increase of 12.9% (7,865 cases) compared to the same period last year (61,052 cases).

Complaints related to financial investments increased by 2,546 cases (80.5%) compared to the same period last year, showing the highest growth rate. Complaints increased across securities firms, investment advisory firms, asset management companies, real estate trust companies, and futures companies. Complaints related to banks increased by 1,762 cases (23.5%) compared to the same period last year, with many complaints related to loan transactions and private equity funds.

The increase in loan transaction complaints is believed to be influenced by the rise in complaints related to maturity extensions and other issues due to the impact of the novel coronavirus disease (COVID-19).

Complaints in the life insurance sector increased by 1,167 cases (7.7%). Complaints related to insurance solicitation types, claiming insufficient explanation about products, notably increased. In the non-life insurance sector, complaints increased due to issues such as actual loss insurance, resulting in a total complaint count 1,589 cases (7.0%) higher than the same period last year.

Complaints from small and low-income citizens increased by 801 cases (6.4%). Complaints related to installment finance companies slightly decreased, but complaints related to loan sharks and mutual finance increased. By sector complaint proportions were: non-life insurance (35.2%), life insurance (23.7%), small and low-income citizens (19.4%), banks (13.4%), and financial investments (8.3%).

Financial complaints processed in the first to third quarters totaled 65,004 cases, an increase of 5,642 cases (9.5%) compared to the same period last year (59,362 cases).

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