Financial Complaints Decrease by 7% in First Half of Year...Sharp Decline in Both Banks and Insurance

Total Financial Complaints Received: 42,725 Cases
Non-life Insurance (36.7%), Life Insurance (22.1%), Small Business and Low-income (16.6%), Banks (13.8%), Financial Investment (10.8%) Order

[Asia Economy Reporter Park Sun-mi] Amid the enforcement of the Financial Consumer Protection Act (FCPA), the number of financial complaints received in the first half of this year decreased by 7% compared to the same period last year.

According to the Financial Supervisory Service on the 19th, the total number of financial complaints received in the first half of this year was 42,725, down 7% (3,197 cases) from 45,922 in the first half of last year. The number of financial complaints processed in the first half also decreased by 1.9% (809 cases) to 41,583 compared to the same period last year. The share by sector was as follows: non-life insurance (36.7%), life insurance (22.1%), small and low-income consumers (16.6%), banks (13.8%), and financial investment (10.8%).

Except for the financial investment sector, which saw an increase of 904 complaints, all sectors including banks (-232 cases), small and low-income consumers (-1,978 cases), life insurance (-1,424 cases), and non-life insurance (-467 cases) showed an overall decline in complaint submissions. The decrease in financial complaints is attributed to the enforcement of the FCPA starting March 25, as well as a base effect from the surge in complaints related to loan transaction relief requests and private equity funds during the first half of last year amid COVID-19.

Bank complaints totaled 5,875, down 3.8% from the same period last year. In particular, complaints related to loan transactions and private equity funds decreased, resulting in a 32.8% and 59.4% decline in loan and bancassurance/fund-related complaints, respectively. By type, loans accounted for the largest share at 23.1%, followed by deposits and savings (13.4%), internet and phone banking (5.6%), and bancassurance/funds (4.4%).

Complaints from small and low-income consumers were recorded at 7,075, down 21.8% from the same period last year. The significant reduction in complaints related to emergency disaster relief fund applications and usage led to a 28% decrease in complaints against credit card companies. Complaints in the life insurance and non-life insurance sectors were 9,449 and 15,689, respectively, down 13.1% and 2.9% compared to the same period last year. In both life and non-life insurance sectors, complaints in the insurance solicitation category, which holds the largest share, decreased by 9.5% and 8.9%, respectively.

However, financial investment complaints were the only category to increase, rising 24.2% to 4,637 cases. Complaints against securities companies, investment advisory firms, and real estate trust companies increased by 479, 844, and 18 cases, respectively. In particular, complaints related to internal control and system failures due to HTS and MTS disruptions at securities firms increased by 643 cases (140.1%).

A financial authority official advised, "In cases of complaints related to incomplete sales of bancassurance products by banks, if it is confirmed that the normal sales procedures were followed during product subscription and there are recorded responses to questions about whether the complainant was informed of the main contents of the product, it is difficult for banks to accept the complainant's claims. Consumers themselves need to carefully read the documents when subscribing to products, verify the accuracy of the product details during confirmation calls, and reassess the appropriateness of the subscribed products."

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