Closure-threatened 'Hangang Life' Mutual Aid Contract Terminated... "Support for Damage Compensation"

Chairman Jo Sung-wook of the Korea Fair Trade Commission attended the National Assembly's Public Administration and Security Committee's audit of the Fair Trade Commission held at the National Assembly on the 5th and is reporting on the work./Photo by Yoon Dong-joo doso7@

[Asia Economy Sejong=Reporter Dongwoo Lee] The Fair Trade Commission announced on the 7th that it will support damage compensation related to the funeral service company Hangang Life Co., Ltd., whose guarantee contract was recently terminated by the Korea Funeral Service Guarantee Association (Hansanggong).

Hangang Life received a notice of termination of the guarantee contract from Hansanggong on the 4th due to deteriorating management. The company is a prepaid funeral service provider with advance payments amounting to 150 billion KRW. After the termination of the guarantee contract, the registration of prepaid installment sales business with the relevant local government may be canceled or deleted.

If Hangang Life’s registration is canceled, consumers can receive damage compensation equivalent to 50% of the advance payments made through Hansanggong. Hansanggong plans to explain the specific procedures and methods for receiving the damage compensation to subscribers via registered mail. Damage compensation can be applied for on the Hansanggong website. However, amounts paid for cruise products sold together with funeral service products by Hangang Life are not eligible for compensation.

By using the Fair Trade Commission’s "My Funeral Service As Is" service, consumers can choose to receive services from another company offering similar products instead of receiving damage compensation for the funeral service products.

If consumers prove that they were subscribers of Hangang Life, they can select products from one of 15 other funeral service companies. The amount paid to Hangang Life will be recognized as having been paid to the selected product, allowing consumers to receive services. However, if there is a remaining balance from the original product payments or if consumers wish to subscribe to a more expensive product, they must pay the additional amount. Compensation methods and procedures will be notified individually to consumers and will also be posted on the Consumer24 website.

Previously, in November last year, the Fair Trade Commission filed a complaint with the prosecution against Hangang Life for failing to return 2.324 billion KRW in cancellation refunds to consumers.

A Fair Trade Commission official stated, "Along with damage compensation, we plan to strengthen monitoring of violations of the Installment Transactions Act, such as failure to deposit advance payments, to minimize consumer damage caused by insolvency of funeral service companies, and to promote system improvements through expert and stakeholder consultations."

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