"Card Information Display Simplification"... Financial Services Commission Prepares 13 Ombudsman Improvement Proposals

Preparation of a total of 13 improvement measures including 10 tasks for enhancing the Financial Consumer Protection System

[Asia Economy Reporter Park Sun-mi] On the 19th, the Financial Services Commission announced that the 3rd Ombudsman, which has been active since March last year, reviewed 22 improvement tasks and prepared a total of 13 improvement plans, including 10 tasks for improving the financial consumer protection system.

For customers who apply, when the obligation to explain is strengthened, card information such as card numbers and CVV can be omitted from the physical card's display. This consideration was made because card information can already be checked through mobile apps, and it helps prevent card number theft in case of card loss. Also, while only annual billing of credit card annual fees was allowed, installment payments such as monthly payments are now permitted for products without consumer damage concerns.

Efforts are also underway to improve convenience in non-face-to-face insurance subscriptions. Considering that non-face-to-face transactions have become commonplace, insurance planners will be allowed to perform their duties through non-face-to-face methods such as recording, and a hybrid sales method linking channels will be permitted. A plan to improve non-face-to-face solicitation regulations is being promoted so that customers can easily subscribe to insurance by listening to explanations over the phone and applying via mobile without meeting the planner in person.

Additionally, financial companies currently limit the daily withdrawal and transfer limit to 700,000 KRW for accounts that have not used ATMs for more than one year, and to lift this limit, the account holder must visit the branch in person. However, considering that savings banks have fewer branches, the withdrawal and transfer limit release for accounts that have not used ATMs for a long time has been changed to allow non-face-to-face methods.

The consumer protection system has also been further strengthened.

Currently, most mortgage loans are of an unlimited liability type (recourse type), where banks dispose of the house to recover the debt in case of borrower default, and if the recovered amount is insufficient, additional debt collection is pursued. However, to expand limited liability mortgage loans, regulations have been revised so that banks treating 2% or more of newly originated mortgage loans for home purchase purposes as limited liability loans can receive a reduction in contributions to the Housing Finance Credit Guarantee Fund.

To reduce the burden of cumbersome administrative document preparation and related costs when consumers use insurance products, a basis for joint use of administrative information by insurance companies is also being established. Furthermore, active guidance has been provided to financial companies handling the Sunshine Loan so that actual workers who are members of the Dockworkers' Union can also use the worker Sunshine Loan.

A Financial Services Commission official explained, "This year, we will activate the operation of the Ombudsman by holding four meetings annually to accelerate financial regulation improvement and financial consumer protection," adding, "Anyone can apply for grievance complaints through the Financial Regulation Complaint Portal or the Ombudsman bulletin boards within financial sector associations."

Meanwhile, the Financial Services Commission has introduced and operated the Ombudsman system since February 2016 to improve financial regulations and strengthen financial consumer protection from a third-party perspective. The newly appointed 3rd Ombudsman since March last year has continued its role as a consumer-centered financial innovation advisory body even during the spread of COVID-19.

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