[First Day of the Financial Consumer Protection Act] It Takes 1 Hour 30 Minutes to Contribute to Pension but Fails... "I'll Do It Next Time"

On the First Day of the Financial Consumer Protection Act Enforcement, Visiting Bank Branches
Product Enrollment Took More Time Than Expected
Confusion Among Both Employees and Consumers on Site

On the first day of the Financial Consumer Protection Act enforcement, the 25th, a customer is receiving consultation at a bank counter in Jung-gu, Seoul.

[Asia Economy Reporters Kiho Sung and Seungseop Song] “Dear customer, we apologize. The recorder malfunctioned, so I need to read the product explanation again.” (A bank teller at Bank A in Seodaemun-gu, Seoul)

“We need to get recording certification for the product explanation, but it keeps failing. I will check with the group, so please wait a moment.” (A staff member in charge at Bank B in Jung-gu, Seoul)

On the first day of the Financial Consumer Protection Act (FCPA) enforcement, the 25th, it was much more difficult and time-consuming for financial consumers to sign up for bank products than expected. Although fewer customers visited branches due to the activation of non-face-to-face services amid COVID-19, some branches revealed scenes of staff struggling due to insufficient systems and prior information. Also, as product sign-up took more time than anticipated, there were instances of staff sweating nervously and customers expressing dissatisfaction.

On that day, the reporter personally visited Bank B in the Myeongdong area of Seoul to sign up for a pension fund product. Upon sitting in the branch chair, the sales staff presented a script and a recorder. The script was four pages of A4 size. The script, which contained a detailed product explanation, was structured so that the staff and customer read alternately. The staff explained that until yesterday, this process was not required, but from that day forward, with the enforcement of the Financial Consumer Protection Act, recording became mandatory.

However, since it was the bank staff’s first time doing the recording, the recorder malfunctioned, causing the same part of the script to be read several times, adding more than five minutes. After about 20 minutes of recording, the next step was to verify whether the recording was successful.

However, due to a system error, the recording certification did not go through, and the on-site staff explained that verification by the group was necessary and asked for more waiting. The group responded that they could not confirm the recording, instructed to note the exception reason, and proceed to the next step. But the system did not work, and eventually, the group IT team said the recording seemed not to have been done properly and that it needed to be recorded again. The reporter spent a total of 1 hour and 30 minutes just to sign up for the product but gave up on signing up after being told to record again.

"Additional time required for product explanation... Concerns over work overload leading to sales performance decline"

Such scenes of confusion due to inadequate preparation were found at various bank branches. A representative from Bank C in Jongno-gu, Seoul, said, “Even signing up for relatively simple products took considerable time, which inevitably led to customer complaints,” adding, “We cannot argue with customers, but I worry frequent conflicts will arise.”

A salaried worker named Seongin Lee (32 years old, pseudonym), who visited this bank, said, “I explained my situation to the company and came out briefly to sign up for a product, but it took much longer than expected,” and pleaded, “I’m now considering whether I need to take half a day off when I handle bank business in the future.”

Concerns remain on-site. A representative from Bank D’s branch located in Gwanghwamun, Seoul, said, “As additional explanations such as product withdrawal increase, work overload will cause more time to be spent on customer service,” and expressed worry that “Overall, this will lead to a decline in sales performance.”

Although the FCPA has been enforced, unclear guidelines remain problematic. For example, when a customer demands compensation for illegal contract termination, the scope of compensation the bank must provide is ambiguous. A representative from Bank C’s branch said, “It is still tight to reorganize sales rules and build IT systems,” and appealed, “Because the authorities have not presented clear enforcement rules, it is difficult to prepare solutions that can respond 100% to all issues on-site.”

Meanwhile, the core of the FCPA is to expand six major sales regulations to all financial products. The sales regulations include ▲Suitability Principle ▲Appropriateness Principle ▲Duty to Explain ▲Prohibition of Unfair Sales Practices ▲Prohibition of Improper Solicitation ▲Prohibition of False or Exaggerated Advertising.

Financial companies violating these rules face 'punitive surcharges' of up to 50% of related revenue, and sales staff can be fined up to 100 million KRW. This effectively makes active solicitation by financial sales staff impossible.

The regulation banks are most concerned about is the 'burden of proof for damages.' If a consumer invests in a high-risk product (with a principal loss possibility exceeding 20%) without proper explanation and suffers losses, and then claims damages, the financial company must prove there was no intent or negligence.

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