Half of Subscribers Unaware of Contract Terms for Combined Funeral Services and Appliance Rentals

Bundled Home Appliance Prices Up to Three Times Higher
Complex Contract Structures Increase Consumer Risk
Seoul City Proposes Revision of Standard Service Terms

A recent survey found that half of the subscribers to "prepaid bundled products," which combine funeral or travel services with home appliance rentals, do not fully understand the terms of their contracts. The prices of bundled appliances were also found to be up to 3.3 times higher than typical online market prices.

The Seoul Metropolitan Government and the Korean Women's Consumers Federation released the results on March 24 of an analysis of consumer counseling cases concerning prepaid bundled products from 2022 to 2025, as well as a perception survey of 500 subscribers.

Prepaid bundled products refer to a combination of prepaid installment contracts for funeral or travel services and home appliance rental contracts. These products are structured so that if the customer fully pays the contract amount by the maturity date but cancels without using the service, the full amount paid will be refunded according to the agreement.

An analysis of counseling cases related to prepaid bundled products received by the 1372 Consumer Counseling Center revealed that the top source of dissatisfaction, accounting for 24.5% of cases, was "failure to notify about separate contracts." In a perception survey of 500 Seoul residents who subscribed to funeral service bundled products after 2020, only 52.8% responded that they understood the contract terms. The main reasons for difficulty in understanding the contracts included "insufficient explanation by the salesperson" (28.3%), "complex terminology in the contract or terms and conditions" (23.9%), and "lack of understanding regarding the maturity refund structure" (21.7%).

An analysis of the prices of 25 funeral service bundled home appliances across nine product categories received by the counseling center showed that their prices ranged from 1.4 to 3.3 times higher than the median prices found on online price comparison sites. Some products were outdated models or exclusive to funeral service bundles, making direct comparison challenging.

Based on these findings, the Seoul Metropolitan Government plans to work with relevant agencies to promote institutional improvements. The city also intends to propose revisions to the standard terms and conditions for funeral services, which have not reflected legal amendments since 2014.

Notifications and guidance on key information that consumers must verify at the contract stage will also be strengthened. This includes whether there are separate contracts, the composition and allocation of payments, criteria for refunds and penalties upon early termination, and product model and price comparisons.

Kim Myungseon, Director of the Fair Economy Division at the Seoul Metropolitan Government, stated, "Prepaid bundled products have complex contract structures, but key information is often not adequately explained during the contracting process, which increases the risk of consumer harm. Through institutional improvements such as revising the standard terms and conditions and proactive consumer protection campaigns, we will work to strengthen the safety net for consumer affairs that affect daily life."

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