The Anticipated Tmon and Wemakeprice 'Payment Delay' Incident... Authorities Conduct Emergency On-Site Inspection and Establish Complaint Center

Joint Investigation Team Formed by FSC and Fair Trade Commission for On-Site Inspection
Payment Delays for Tenant Companies Since July... Financial Condition Deteriorated Since June 2022
FSC "Preparing for Collective Dispute Mediation... Actively Supporting Civil Lawsuits"
Concerns Over Spread as Second Merge Point Incident

As the settlement delay crisis involving TMON and WEMAKEPRICE causes increasing damage to consumers and marketplace sellers, the Financial Supervisory Service (FSS) has formed a joint investigation team with the Fair Trade Commission and others to conduct urgent on-site inspections and investigations. The FSS plans to establish and operate a dedicated complaint reception desk.

On the 25th, Lee Se-hoon, Senior Deputy Governor of the FSS, held the first related briefing since the TMON and WEMAKEPRICE settlement delay incident at the FSS office in Yeouido, Seoul, stating, "As the settlement delays continue, there are concerns about damages to consumers and marketplace sellers who purchased goods and services through these companies." TMON and WEMAKEPRICE, subsidiaries of Singapore-based e-commerce company Qoo10, operate as online marketplace intermediaries under the Electronic Commerce Act and as electronic payment gateway (PG) service providers under the Electronic Financial Transactions Act.

The delay in payment settlements to sellers on TMON and WEMAKEPRICE began in July. Following WEMAKEPRICE’s delay in settling payments amounting to 36.9 billion KRW to 491 sellers on the 11th, additional settlement delays occurred in the third week of this month as some sellers left the platforms, causing a sharp drop in sales and worsening liquidity. The parent company Qoo10 announced a statement on the 17th confirming settlement completion through the end of July, payment of 10% delayed interest, and a 3% reduction in seller commission fees as compensation measures for sellers.

First, the joint investigation team, composed of FSS and Fair Trade Commission staff, is conducting urgent on-site inspections and investigations to monitor in real time the scale of settlement delays, seller attrition status, and user refund requests and payments. Deputy Governor Lee explained, "We are reviewing the funding and usage plans submitted by TMON and WEMAKEPRICE and monitoring their funding status," adding, "We plan to investigate potential violations of obligations under the Electronic Commerce Act, such as refund obligations and service supply contract fulfillment."

Additionally, a dedicated complaint reception desk will be operated to prevent consumer damage and protect sellers. The FSS will establish and operate a dedicated complaint reception desk starting today to enable consumers and sellers affected by this incident to quickly file complaints. It will also develop a system for credit card companies involved in payments for gift certificates, travel products, and others to respond to customer complaints. The Fair Trade Commission will operate a dedicated team at the Korea Consumer Agency to support consumer damage relief and dispute mediation related to refund delays or refusals.

Deputy Governor Lee stated, "To ensure prompt damage relief, we are preparing and initiating collective dispute mediation and will actively support civil lawsuits depending on future developments," adding, "We plan to encourage banks and other financial institutions to enter escrow agreements so that funds received for settlements are used exclusively for settlements."

Meanwhile, following a report to the National Assembly’s Political Affairs Committee this morning, FSS Governor Lee Bok-hyun responded to lawmakers’ concerns that the TMON and WEMAKEPRICE incident could escalate into a second Merge Point incident by saying, "We have dispatched an inspection team of six personnel to the site for on-site inspections," and "We are verifying whether the figures reported by the related companies are appropriate."

Regarding whether the Electronic Financial Transactions Act, which requires separate management of prepaid funds, was properly observed, he said, "Although it is scheduled to be enforced starting this September, it has been managed in a supervisory manner beforehand," and added, "We do not expect consumer damage to spread in this regard."

Regarding concerns about Qoo10’s delayed settlements and other issues, which have been longstanding, he replied that a management improvement agreement had been in place. Governor Lee explained, "Since June 2022, due to intensified competition within the industry, the capital ratio deteriorated and the financial management situation worsened. We have been managing this through a management improvement agreement," adding, "The issue of delayed settlements to marketplace sellers has been specifically managed since this month."

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