FSS Reviews Loan Product Advertisements... "Emphasis on Lowest Interest Rate Only and Exaggerated Expressions"

The Financial Supervisory Service (FSS) has inspected online advertisements for loan products and prepared improvement measures. It decided to display both the minimum and maximum loan interest rates and to prohibit definitive expressions.

According to the financial sector on the 2nd, the FSS inspected 797 loan product advertisements from 18 banks and 79 savings banks between September and November last year. The FSS identified issues such as ▲only the minimum interest rate being displayed ▲insufficient updating of information on loan comparison platforms ▲expressions suggesting exaggerated advertisements ▲lack of explanations regarding loan ancillary costs and other matters.

First, to address the problem of many loan products emphasizing only the minimum interest rate for advertising effect, it was improved so that both minimum and maximum interest rates are displayed even when advertising space is limited.

In cases where the interest rates displayed on bank websites and loan product comparison platforms differ for the same loan product, financial institutions will strengthen post-management by conducting regular inspections. A notice was added to comparison platform advertisements to prevent consumer misunderstandings regarding interest rate information.

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Definitive expressions that stimulate unnecessary loan demand are prohibited from use altogether. Model cases regarding ancillary loan costs and other matters will be prepared by associations to support member savings banks in faithfully implementing the intent of the regulations.

The FSS also prepared consumer precautions related to loan advertisements. Consumers should check detailed interest rate information beyond the minimum interest rate displayed in loan product advertisements. When using loan product comparison platforms, it is necessary to verify whether the product information is up-to-date. When executing a loan, consumers should confirm the actual loan availability and fully understand ancillary costs and other loan-related information.

The Korea Federation of Banks and the Korea Federation of Savings Banks will support member companies' practical implementation by supplementing the advertisement review manual to reflect the improvements. The FSS will monitor financial company advertisements together with the two associations and promote and support improvements in advertising practices.

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