No Refund on Annual Fee After Using a Single Benefit?... Fair Trade Commission Corrects Unfair Terms in Paid Performance Memberships

Nine Types of Unfair Terms Corrected at 19 Companies Including Interpark
'Zero Refund' Clause Abolished for Partial Benefit Use

In the future, consumers will no longer be denied a full refund for the sole reason that they received even a single discount benefit or used a pre-sale ticket after joining a paid membership for performances. The closed-off operational method, which made it easy to sign up online but forced customers to cancel only via hard-to-reach phone calls with consultants, thereby tying them down, will also be improved.

Exterior view of the Seoul Arts Center. The Asia Business Daily DB.

The Korea Fair Trade Commission announced on May 6 that it had reviewed the terms and conditions of paid membership services for 19 major performance venues and ticket reservation platforms, and corrected a total of nine types of unfair clauses in four categories, including unreasonable refund restrictions. This investigation covered 17 performance venues, including the Seoul Arts Center and Lotte Concert Hall, as well as two ticketing platforms, including Interpark and Club Balcony. The action was taken in response to a recent increase in consumer complaints as more people join paid memberships to secure pre-sale tickets.

'Full Penalty' Clause Abolished... Reasonable Refund Standards Established

Previously, the terms and conditions stipulated that if a certain period had passed since joining or if the service had been used even once, the annual membership fee could not be refunded at all. The Fair Trade Commission judged this clause to impose an excessive burden on users compared to the actual loss suffered by the business operator. Accordingly, full refunds are now allowed within 14 to 30 days of joining, and even if benefits have already been used, the remaining balance must be refunded after deducting a reasonable penalty.

The practice of double deductions has also been addressed. Instead of deducting both the amount corresponding to the usage period and the actual value of benefits received, the revised policy stipulates that only the larger of the two amounts will be deducted. In addition, the rule that immediately deducted points granted to members from the refund amount upon cancellation has been revised so that points must first be reclaimed, and only any shortfall will be deducted in cash.

Limiting Operator Exemptions and Guaranteeing User Rights

Clauses that shifted risks, which should have been borne by the business operator, onto consumers, or that ignored procedural rights, have also been improved. The clause that unconditionally exempted the business operator from responsibility simply because the consumer was partially at fault has been revised so that responsibility is imposed in cases of intent or negligence by the business operator.

The practice of deleting posts or rejecting membership applications without prior notice for vague reasons has also been eliminated. Broad reasons such as "policy violation" must now be specified in detail, and prior notice and an opportunity to explain must be provided in principle. In particular, the rule that forced members who had joined online to cancel only by calling the customer service center has been revised so that cancellations can now be made through various channels such as online or in writing.

The Fair Trade Commission stated, "This measure will ease the financial burden experienced by consumers when canceling performance memberships," and added, "We will continue to review unfair contract terms in areas closely related to daily life to create a fair trading environment."

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