Introduction of Financial Dispute 'Fast Track'... Strengthening Independence of Mediation Committee

Direct Referral to Mediation Committee Possible Without Consensus Recommendation When Applying Fast Track

The fast track system will be introduced to swiftly resolve financial disputes. Additionally, standards for the composition of deliberation committee members have been added to enhance the independence of the mediation committee's operation.

On the 25th, the Financial Services Commission announced that the amendment to the Enforcement Decree of the Act on the Protection of Financial Consumers, which includes improvements to the handling of the financial dispute mediation system that resolves disputes between financial consumers and financial companies, was approved at the Cabinet meeting.

In the financial sector, disputes between financial consumers and financial companies have been increasing recently as financial products diversify and product structures become more complex. According to the Financial Services Commission, the number of dispute complaints received increased by about 30%, from 28,118 cases in 2018 to 36,508 cases in 2022, four years later.

This amendment to the enforcement decree aims to strengthen the speed and independence of the financial dispute mediation system and is being promoted as part of the national agenda to protect financial consumers and enhance their rights. At the same time, improvement tasks identified through last year's Financial Services Commission Ombudsman system were also amended simultaneously.

First, the fast track system was introduced for the prompt resolution of financial disputes. Previously, when a financial consumer applied for financial dispute mediation, the process had to go through voluntary mediation → recommendation for settlement → deliberation by the Financial Dispute Mediation Committee. However, if the fast track is applied, the recommendation for settlement procedure is omitted, and the case can be referred directly to the mediation committee for deliberation.

However, whether to apply this fast track procedure will be decided by considering factors such as the amount in dispute and the number of stakeholders. The authorities plan to establish detailed application criteria related to this in the financial dispute mediation rules.

Furthermore, to enhance the independence of the mediation committee's operation, standards for the composition of deliberation members during mediation committee meetings have been added. When holding a mediation committee meeting, 6 to 10 members must be appointed from among the 34 members to form the meeting, and related standards have been added to ensure that appointed members are fairly selected by comprehensively considering their expertise.

In addition, improvement tasks raised through last year's Financial Services Commission Ombudsman operation were also amended. In the case of sold securities-backed loans, the principle of appropriateness will be excluded from application as it is not practical to apply, and duplication of content in product brochures provided during private fund sales will be allowed to be excluded. Also, when a financial consumer requests to view materials related to contract conclusion and performance from a financial company, the viewing period will be clarified from the previous 8 days to 6 business days.

The amendment to the enforcement decree, which passed the Cabinet meeting on this day, is scheduled to take effect from November 2, three months after the date of promulgation (August 1). Amendments related to excluding duplicate content in product brochures during private fund sales and clarifying the deadline for material viewing requests, which do not require subordinate regulation amendments, will take effect immediately from the date of promulgation.

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