Prepaid Installment Service Subscribers Including Sangjo Industry Surpass 8.33 Million

Advance Payment Scale Records 8.389 Trillion Won

The number of subscribers paying in installments to funeral service providers and other mutual aid companies for future services has surpassed a record high of 8.33 million. The amount of advance payments entrusted by these subscribers approached 8 trillion won.

On the 28th, the Korea Fair Trade Commission announced key information such as the general status of prepaid installment transaction companies and the status of advance payment preservation as of the first half of 2023. As of the end of March 2023, the number of registered prepaid installment transaction companies was 79, the number of subscribers increased by about 760,000 compared to the second half of last year to 8.33 million, and the amount of advance payments increased by 491.6 billion won to 8.389 trillion won. Among them, companies with advance payments exceeding 10 billion won (45 companies) held a total of 8.3192 trillion won in advance payments, accounting for 99.1% of the total, indicating that most of the advance payments are concentrated in large companies.

This includes seven travel agencies newly registered under the revised Enforcement Decree of the Installment Transactions Act last year, which operate in the form of prepaid installment transactions. The number of subscribers subject to advance payment preservation for these seven newly registered companies totals about 60,000, with an advance payment amount of 9.4 billion won. A prepaid installment contract refers to an agreement where consumers pay the business operator in two or more installments over at least two months and receive the service at an unspecified future date.

As a result of the Fair Trade Commission’s inspection of the obligation to preserve advance payments by prepaid installment transaction companies, 76 companies have preserved the advance payments received from consumers through banks, mutual aid associations, or consumer damage compensation insurance institutions at the legally required preservation ratio. Mutual aid products must preserve 50%, and travel products must preserve 20% as of March 2023. The amount of advance payments for these companies accounts for 99.9% of the total. On the other hand, three companies violated the obligation to preserve advance payments with an average preservation ratio of 37.2%, and their advance payment amount accounts for 0.12% (about 3.7 billion won) of the total.

The Fair Trade Commission stated, “The prepaid installment transaction industry is steadily growing in scale, with 8 million subscribers and advance payments exceeding 8 trillion won,” and added, “Efforts by stakeholders to prevent consumer damage commensurate with this scale of growth are necessary.”

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