Subscription Services Stealthily Prevent Paid Conversion with Amendment to the Act on Door-to-Door Sales Passed

Amendment to the Enforcement Decree of the Yeonjeon Act Passed at the Cabinet Meeting

[Asia Economy Reporter Park Sun-mi] The amendment to the Enforcement Decree of the Specialized Credit Finance Business Act (SCFB Act), which strengthens consumer protection in the subscription economy and rationally reorganizes entry requirements for concurrent credit card business, has passed the Cabinet meeting.

According to the Financial Services Commission on the 10th, the amendment to the Enforcement Decree of the SCFB Act passed at the Cabinet meeting includes ▲establishing consumer protection standards for regular payments ▲rationalizing approval requirements for concurrent credit card business by banks, etc. ▲extending the reporting deadline for changes in the largest shareholder of specialized credit finance companies ▲entrusting the Financial Supervisory Service (FSS) with tasks related to cancellation of registration of value-added network (VAN) operators.

First, to protect consumers in the subscription economy, the Enforcement Decree establishes a delegation basis for payment agencies regarding methods and procedures for paid conversion, transaction cancellation, and refunds, with detailed provisions to be set in supervisory regulations. According to the SCFB supervisory regulations, a method to notify consumers at least 7 days before paid conversion will be established, along with refund standards considering usage days, number of installments, and usage status.

Additionally, when approving concurrent credit card business by banks, etc., only the 'examination of whether the major shareholder is of a distressed financial institution' among the major shareholder requirements will be applied, in line with the Capital Markets Act. Furthermore, the FSS will be entrusted with the verification and review of cancellation requirements for VAN operators, and the reporting deadline for changes in the largest shareholder of specialized credit finance companies will be extended from 7 days to 14 days, improving regulations.

A Financial Services Commission official stated, "The amendment to the Enforcement Decree of the SCFB Act, approved at the Cabinet meeting, will take effect from the date of promulgation, but the provisions related to establishing consumer protection standards for the subscription economy and rationalizing approval requirements for concurrent credit card business will be enforced three months after promulgation." He added, "To strongly protect subscription economy consumers, we plan to promptly proceed with amendments to supervisory regulations delegated by the Enforcement Decree and complete the revisions before the Enforcement Decree takes effect."

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