[2021 National Audit] Banking Sector Refunds 1.3 Trillion KRW Within Six Months of Introducing 'Financial Product Subscription Withdrawal Right'

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[Asia Economy Reporter Kiho Sung]Since the introduction of the 'right of withdrawal' allowing financial consumers to cancel their subscription to financial products and receive refunds for payments already made, 96,000 product subscriptions have been canceled in the banking sector over the past six months, with consumers receiving refunds totaling 1.3 trillion KRW. In the life and non-life insurance sectors, refunds amounting to 600 billion KRW were processed for 720,000 cases.

According to data titled 'Status of Financial Company Withdrawal Applications and Processing' submitted by 18 domestic banks to the Financial Supervisory Service through Kang Min-guk, a member of the National Assembly's Political Affairs Committee from the People Power Party, from March 25 to September 30, a total of 103,729 withdrawal applications for financial products were received, amounting to 1.3942 trillion KRW.

The right of withdrawal was implemented on March 25 with the enforcement of the Financial Consumer Protection Act, allowing financial consumers to freely cancel contracts for financial products within a certain period, similar to returning purchased goods. Consumers can cancel purchases of all financial products except deposit-type products, including trusts, loans, and high-risk funds, within the specified period.

Across a total of 58 financial companies in the banking and insurance industries, from March 25 to the end of September, a total of 821,724 withdrawal applications amounting to 1.9918 trillion KRW were received, of which 813,898 cases amounting to 1.8776 trillion KRW were processed. The withdrawal processing rate was 99.1% by number of cases and 94.3% by amount.

According to the data, the number of accepted withdrawal cases in the banking sector was 95,901, with a processing rate of 91.8%. The amount reached 1.28 trillion KRW. Among banks, KakaoBank had the highest number of accepted withdrawal applications at 59,119 cases (467.9 billion KRW), followed by K Bank with 10,295 cases (185.6 billion KRW). Both banks accepted and processed 100% of withdrawal applications.

During the same period, 23 life insurance companies received a total of 276,995 withdrawal applications amounting to 538.6 billion KRW, all of which were accepted. By company, LINA Life had the highest number of withdrawal applications at 63,518 cases (2.7 billion KRW), while Samsung Life had the highest withdrawal amount with 39,602 cases (169.7 billion KRW). Seventeen non-life insurance companies received a total of 441,002 withdrawal applications amounting to 59 billion KRW, all of which were fully processed.

Assemblyman Kang said, "The astronomical refund amount approaching 2 trillion KRW with over 820,000 cases applied within just six months of implementing the right of withdrawal shows that consumers are exposed to an environment where they may make unfavorable choices when selecting financial products." He urged, "The Financial Supervisory Service should conduct more in-depth monitoring of sales sites to ensure the establishment of the withdrawal right system, and especially considering that more than one-third of withdrawal applications occur at internet-only banks, specialized management and supervision guidelines should be established for each financial sector."

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