FSS Discloses Dispute Cases Related to Credit Card Loss and Theft

Mr. A lost his credit card in Thailand and suffered damages from approximately 6 million KRW in fraudulent transactions. Mr. A requested full compensation from the card company, but the credit card company informed him that only 80% could be compensated according to their terms and conditions. Mr. A then filed a complaint with the Financial Supervisory Service (FSS), but the FSS explained that, as the credit card company had set the customer's liability ratio at 20% in accordance with the "Model Standards for Compensation for Card Loss and Theft Accidents," it was difficult to recommend acceptance of the customer's request.

The FSS stated on May 19 that disputes involving vulnerable groups with insufficient financial knowledge, such as in card usage and lease contracts, are increasing. The agency released major dispute cases and provided consumer advisories.

The Financial Supervisory Service (FSS) stated that in case of loss or theft of a credit card, it must be reported to the card company immediately, and the fraudulent usage amount may not be fully compensated depending on the degree of the customer's responsibility.

In the case of travel cards, which are not subject to the Specialized Credit Finance Business Act, unlike cards issued by card companies or banks, fraudulent usage amounts incurred before reporting may not be compensated, so caution is required.

The FSS stated that in the event of loss or theft of a credit card, it must be reported to the card company immediately, and the fraudulent usage amount may not be fully compensated depending on the degree of the customer's responsibility. The agency emphasized that, under the Specialized Credit Finance Business Act and the Model Standards for Compensation for Card Loss and Theft Accidents, customers may also be liable for a portion of the damages, so credit cards must be managed with particular care.

In addition, compensation only applies to fraudulent usage amounts incurred within 60 days prior to the date the loss or theft is reported, so it is important to notify the credit card company as soon as the loss or theft is discovered.

In particular, for travel cards that are not subject to the Specialized Credit Finance Business Act, unlike cards issued by card companies or banks, fraudulent usage amounts incurred before reporting may not be compensated, so caution is required.

The FSS explained that if there is no contract or related document when making a purchase on installment, it may be difficult to exercise the right to refuse payment of the remaining installment amount (installment defense right).

Ms. B entered into an expensive installment contract for hair care services, but when the business operator failed to provide the services, she filed a complaint with the FSS requesting to exercise her installment defense right. However, since there was no contract specifying the details of the installment agreement (such as the content and supply timing of the service), it could not be proven that the business operator had failed to provide the service, so the FSS explained that it was difficult to recommend acceptance of the customer's request.

The FSS emphasized that, in case the installment merchant does not properly fulfill the contract, consumers should keep the contract documents until the installment transaction is completed, so they can exercise their installment defense right if necessary.