Five Banks and Four Securities Firms Rated 'Lowest' in Consumer Protection Amid Private Equity Fund Scandal

[Asia Economy Reporter Kangwook Cho] Banks and securities firms that caused social controversy due to private equity fund scandals such as Lime and Optimus ranked at the bottom in consumer protection among 71 financial companies. Only two companies, Woori Card and Hyundai Card, received the highest grade of 'Excellent.'

The Financial Supervisory Service announced on the 30th that, as a result of a performance evaluation of consumer protection activities last year for a total of 71 financial companies, Woori Card and Hyundai Card received an overall grade of 'Excellent,' 24 companies (33.8%) received 'Good,' 34 companies (47.9%) received 'Average,' and 11 companies (15.5%) received 'Poor.'

By sector, among 16 banks, 3 companies were rated 'Good,' 8 companies 'Average,' and 5 companies 'Poor.'

Five companies (IBK, Busan Bank, Shinhan, Woori, KEB Hana) that caused social controversy by inducing consumer damage related to private equity funds were downgraded by one grade to 'Poor' in the overall rating.

It was pointed out that there is a need for consumer protection departments to actively express opinions and solidify their pre-consultation function when selecting products such as funds and trusts. However, while most banks have operated with the CCO (Chief Consumer Officer) concurrently holding other positions, the number of banks appointing dedicated CCOs has increased from this year.

Among 18 life insurance companies, 5 were rated 'Good,' 11 'Average,' and 2 'Poor.' One company improved its overall grade compared to the previous year, while 7 companies declined.

Samsung Life Insurance, which caused social controversy by failing to pay cancer insurance benefits related to long-term care hospitals, was downgraded by one grade to 'Poor.' Also, KDB Life Insurance received a 'Poor' overall grade due to poor evaluations in four areas, including the number of complaints.

The autonomous adjustment rate related to complaint handling in the life insurance sector decreased, and four companies were rated 'Poor' in the complaint handling effort category.

Among 11 non-life insurance companies, 5 were rated 'Good' and 6 'Average.' One company improved its overall grade compared to the previous year, while 3 companies declined.

The non-life insurance sector generally has the CCO fully responsible for consumer protection tasks and operates consumer protection councils at the executive level, which was evaluated as exemplary governance compared to other sectors.

Among 7 card companies, 2 were rated 'Excellent,' 3 'Good,' and 2 'Average.' One company improved its overall grade compared to the previous year, while 3 companies declined.

Hyundai Card and Woori Card received 'Excellent' grades in 5 and 4 evaluation categories respectively, earning an overall 'Excellent' rating.

The performance of consumer protection council meetings was the best among all sectors, and some card companies were evaluated as exemplary by having their CEOs serve as council chairpersons.

Among 10 securities companies, 3 were rated 'Good,' 3 'Average,' and 4 'Poor.' One company improved its overall grade compared to the previous year, while 6 companies declined.

Four companies (Daishin, Shinhan Investment, KB, NH) that caused social controversy by inducing consumer damage related to private equity funds were downgraded by one grade to 'Poor.' Additionally, three companies with low autonomous adjustment rates during complaint handling were rated 'Poor' in the complaint handling effort category.

Among 9 savings banks, 5 were rated 'Good' and 4 'Average.' Two companies improved their overall grades compared to the previous year, and none declined.

The quantitative evaluation was generally good, but many companies were rated 'Average' or below in non-quantitative areas due to a lack of human and material resources related to consumer protection.

The newly evaluated savings bank (Shinhan) was rated 'Poor' in three non-quantitative areas, indicating a need for improvement in the future, according to the Financial Supervisory Service.

The Financial Supervisory Service plans to reward financial companies with excellent consumer protection systems and institutional operations to promote a consumer-centered management culture. The evaluation results will be notified to each company and sector associations, and companies rated 'Poor' will be required to submit improvement plans, with follow-up on implementation.

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