Fair Trade Commission Uncovers Numerous Unfair Terms in Financial Companies' Contracts... Requests Correction

[Asia Economy Reporter Eunju Lee] It has been revealed that banks and other financial companies have been operating unfair terms and conditions for consumers. On the 30th, the Fair Trade Commission announced that it requested the Financial Services Commission to correct 35 types of unfair terms and conditions.

The Fair Trade Commission reviewed the terms and conditions newly established or revised last year by banks, mutual savings banks, financial investment companies, and specialized credit finance companies, and identified 35 types of unfair terms. Some banks included clauses that exempt all liability regardless of whether the bank's fault or negligence occurred when using overseas remittance services, stating that the bank is not responsible for losses. The Fair Trade Commission judged these clauses to be invalid as they unreasonably limit the scope of the business operator's liability for damages and shift risks that the operator should bear onto customers.

Regarding clauses that allow banks to suspend financial information inquiries in cases of unavoidable reasons such as system failures during the use of open banking, the commission also deemed correction necessary. The Fair Trade Commission pointed out that these clauses do not specify any prior notice procedures when suspending financial information inquiries, granting the business operator the authority to unilaterally decide or change, thus rendering the clauses invalid. Additionally, clauses that consider fee changes approved if customers do not raise objections within a certain period were also requested to be corrected.

Clauses from some financial investment companies stating that "if there is no termination request on the trust period expiration date, the trust will be automatically extended in six-month increments" were also deemed invalid. The Fair Trade Commission stated that even if contract renewal clauses exist, customers should be given time to consider whether to extend the contract, be asked for their intention, and the contract should only be renewed if there is no response within the specified period. Furthermore, clauses that require customers to bear all taxes and fees related to third-party payment obligations, such as trust operation fees, were criticized for lacking specificity and clarity, deeming them unfair.

The Fair Trade Commission said, "We expect that requesting corrections for the targeted terms and similar or identical clauses will contribute to establishing a fair trading order in the financial transaction sector."

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