[Reporter’s Notebook] Negligent Regulation of TMEF by Authorities Shattered Someone’s Precious Dreams

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A month ago, I purchased a PC and monitor worth 2.5 million won from TMON. It was a special deal using a famous YouTuber, and hundreds of PCs sold out in an instant. I once visited a company located in Yongsan for a monitor exchange, where about five employees in their early twenties worked in a space of roughly 10 pyeong (approximately 33 square meters). After the TMEF (TMON·WEMAKEPRICE) incident occurred, this company temporarily suspended its business. They cited reasons such as delays in receiving settlement payments causing difficulties in purchasing parts, and increased YouTuber advertising costs linked to sales, making it impossible to continue operations. The CEO of Company A lost the company he had cherished in an instant, and the employees lost their valuable workplace.

The various uncomfortable experiences caused by the TMEF incident are being shared across social networking services (SNS). A son saddened because an overseas trip prepared for his mother’s 70th birthday party was canceled; a small business owner looking into private loans because the money to pay employees’ salaries is tied up; a mother feeling sorry because a trip booked with her son’s first paycheck was canceled. The TMEF incident is not just a 1 trillion won settlement delay caused by a simple e-commerce corporate group but is spreading into a disaster threatening the precious daily lives, memories, and livelihoods of many citizens.

Regarding this incident, the responsible authorities cannot escape accountability. The financial authorities failed to properly prepare consumer protection measures even after experiencing the Merge Point incident just three years ago in 2021. At that time, the financial authorities avoided responsibility by stating, "Merge Plus was not a registered company, so we had no legal authority to supervise it." Even after the TMEF incident broke out, the Financial Supervisory Service (FSS) withdrew by saying, "There are no provisions to issue management improvement orders to TMON and WEMAKEPRICE." It was also revealed that although two management improvement agreements (MOUs) were signed with TMON and WEMAKEPRICE in June 2022 and December last year, the FSS only received written materials and never visited the sites.

The FSS was more eager to find scapegoats to divert public opinion than to take responsible action. On the 29th of last month, the FSS held an emergency briefing that was not previously announced. At the briefing, Park Sang-won, Deputy Director of the FSS’s Small and Medium Enterprise and Low-Income Division, said, "Because the electronic payment gateway (PG) companies received payment fees from TMON and WEMAKEPRICE, they should bear the related risks." After this statement from the FSS, debates over responsibility and loss-sharing between credit card companies and PG companies have intensified, further delaying customer refund procedures. Although the political circles have pointed out that the burden should be shared with credit card companies to ensure prompt refunds and prevent the collapse of small PG companies, the financial authorities have yet to take a clear stance.

Since all e-commerce falls under the jurisdiction of the Fair Trade Commission (FTC), which oversees the Electronic Commerce Act, the FTC must bear even heavier responsibility. Over the past two years, the FTC has maintained a self-regulation policy in response to legislative requests from political circles and civic groups regarding unfair business practices and regulatory gaps by platform operators such as TMON and WEMAKEPRICE. However, self-regulation was so lax that it could be described as 'regulatory neglect.' This resulted in neglecting issues such as the platform payment settlement methods, which are the core causes of this incident. Chairman Han Ki-jung of the FTC said, "We failed to connect the possibility of fund misappropriation with the settlement cycle, so we did not actually anticipate this incident," and apologized for the shortcomings in the system.

The relevant authorities must thoroughly identify system vulnerabilities and thoroughly improve regulations to ensure that the precious daily lives and memories of ordinary citizens are never destroyed again.

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