"Be Careful When Signing Condo Membership Contracts"... Relief Requests Up 28% Year-on-Year

Korea Consumer Agency Receives 1,012 Cases Over the Past 5 Years

Status of Condominium Membership Compensation Claims.

[Asia Economy Reporter Lim Chun-han] As phased daily recovery (With Corona) measures are expected to increase travel demand, consumer damages related to condo membership rights continue to occur, requiring caution.

According to the Korea Consumer Agency on the 5th, a total of 1,012 damage relief applications related to condo membership rights were received over the past five years (January 2017 to September 2021), and this year, 114 cases were reported up to September, a 28.1% increase compared to the same period last year.

In particular, 87.2% of all damage relief applications were related to similar condo membership rights. Similar condo membership rights are a type of long-term accommodation usage rights that allow consumers to use hotels or pensions affiliated or partnered with the business operator under certain conditions. This differs from general condo membership rights, which allow priority or more favorable use of condo facilities compared to general users. In the case of similar condo membership rights, contract cancellation is possible under the Door-to-Door Sales Act, but there have been many cases where the business operator refused cancellation or excessively charged penalties.

Analyzing by reason, contract-related damages such as contract cancellation or penalties accounted for 97.3%, the highest proportion. Specifically, damages caused by business operator closure or loss of contact accounted for 23.6%. Since condo membership rights are often contracted through door-to-door sales (78.9%) or telemarketing sales (6.3%), there is a high risk of impulsive purchases.

The Consumer Agency urged caution, stating that many cases occur where consumers are asked for their address by phone under the pretext of providing free accommodation vouchers or winning events, then visited to induce membership contracts. They also advised that if an impulsive contract was made, consumers should request contract withdrawal in writing within 14 days, and for general condo membership rights, verify with the relevant local government whether the business operator is registered as a resort condominium operator and is operating normally.

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