[One Month Since the Financial Consumer Protection Act] "Still Don't Know"... Proposals and Complaints Explode Against Financial Authorities (Comprehensive)

Among 68 Reported Issues, 19 Addressed... Authorities "Preparing Improvement Measures"
Industry "Prompt Sector-Specific Guidelines and Clear Interpretations Needed"

[Asia Economy Reporter Park Sun-mi] "Under the Financial Consumer Protection Act, when a consumer exercises the right to terminate an illegal contract, financial companies must notify acceptance or rejection within 10 days. When a long holiday like a traditional holiday is included, 7 out of the 10 days are holidays including weekends, leaving an extremely insufficient amount of time to prepare related tasks. Improvement measures are needed." - Bank A

"The Financial Consumer Protection Act applies the six major sales principles to all financial products in the process of implementing the principle of same function, same regulation. There is a need to subdivide the sales regulations applied as the same function across industries into regulations that consider the characteristics of each industry." - Card Company B

Since the Financial Consumer Protection Act was enforced (March 25), the industry has continuously raised difficulties and suggestions toward financial authorities for over a month.

Financial authorities claim that they are promptly receiving and preparing improvement measures for industry suggestions and complaints through the Financial Consumer Protection Act Difficulty Resolution Subcommittee, but confusion in the field has hardly improved. Financial companies unanimously agree that prompt sector-specific guidelines and clear interpretations of ambiguous laws must be prepared, along with clause improvements reflecting the realities of work processing.

According to financial authorities on the 19th, the Financial Services Commission, Financial Supervisory Service, and each industry association have formed a Financial Consumer Protection Act Implementation Situation Team, held the first meeting last week, and are preparing for the second meeting scheduled for the end of this month. The Implementation Situation Team is divided into three subcommittees: ▲Difficulty Resolution Subcommittee, ▲Guideline Subcommittee, and ▲Monitoring and Education Subcommittee, focusing on receiving and responding to industry difficulties for the successful settlement of the Act, preparing guidelines, monitoring implementation, and education and promotion.

As of the 14th, 68 difficulties and complaints related to the Financial Consumer Protection Act have been received through the rapid difficulty handling system. Among these, 19 cases have been completed, but 49 cases are still under review. A financial authority official said, "The number of cases received through the rapid difficulty handling system continues to accumulate," adding, "We operate under the principle of responding within 5 days to received cases, but due to COVID-19, work processing is difficult."

He added, "We check the response status weekly and notify reasons and response plans in case of delays," and "We plan to additionally disclose received inquiries and explanatory materials on the online Financial Consumer Protection Act dedicated bulletin board soon."

Requests Related to the Financial Consumer Protection Act Flood Financial Authorities from Each Industry

The industry believes that detailed adjustments reflecting the situation of each sector are inevitable to calm the confusion occurring after the enforcement of the Financial Consumer Protection Act. The banking sector has requested improvements to change the response deadlines for the ‘right to terminate illegal contracts’ and ‘right to request data inspection,’ which are currently based on calendar days, to business days.

Also, regarding the scope of fees that customers must return to exercise the right of withdrawal, only ‘stamp tax and other taxes and public charges’ and ‘registration costs due to mortgage registration’ are specified, but opinions have been raised that authorities should review adding fees related to collateral evaluation such as appraisal and patent value evaluation, and pledge registration fees that banks must pay to third parties.

In the card industry, since the current burden of proof method for financial companies is based on the Electronic Signature Act, it is difficult to operate consumer verification authentication channels through card authentication and mobile phone identity verification. Therefore, there is a request to allow general electronic authentication channels of financial companies through subordinate regulations. There is also a suggestion to subdivide the six major sales regulations into regulations that consider the characteristics of each industry.

In the insurance and financial investment industries, there are many suggestions related to advertising regulations. These include how to distinguish between business advertisements and product advertisements, what must be mandatorily stated in advertisements, and to what extent the content of stock and bond product advertisements can include product details.

Furthermore, concerns have been raised that inconvenience may increase in the sales process due to the enforcement of the Financial Consumer Protection Act. A representative example is insurance policy loans. The Act defines all loans handled by insurance companies as loan-type products, but insurance policy loans are contracts linked to insurance contracts. The insurance industry points out that applying suitability and appropriateness principles to policy loans would increase consumer inconvenience and administrative burden.

Financial authorities plan to prepare guidelines first in five areas where regulatory uncertainty felt in the field could cause consumer inconvenience: ▲improving the efficiency of investor profile evaluation, ▲advertisement review, ▲risk rating standards for investment products, ▲methods for preparing product explanation documents and key explanation documents to improve explanation efficiency, and ▲standard internal control standards and standard financial consumer protection standards. They will then collect voices from the field and add guidelines as necessary.

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