[금소법 전격 시행] Will the troublesome incomplete sales be eradicated?

# “There is no loss of your principal.” A bank employee introduced the fund product to Mr. B in his 80s, saying, “No matter what, the investment capital must be preserved.” Mr. B, whose investment grade is 5th grade, could not sign up for this product, which could lead to a loss of principal, but the bank encouraged him to sign a’confirmation of oversubscription to risk grade’. Mr. B was in a situation where he couldn’t read documents properly due to his poor eyesight due to his old age. As a result of the Financial Supervisory Service’s investigation, it was revealed that Bank A sold dangerous goods without a proper explanation to Mr. B.

As the Financial Consumer Protection Act (Money Soo Act) comes into force on the 25th, damage cases like Mr. B are expected to be greatly reduced. This is because it is expected to become a watershed in the financial market, such as further strengthening of consumer rights. In particular, controversy over incomplete sales surrounding the financial sector, such as the fund crisis, which has become a problem recently, is also expected to significantly decrease.

The key to this law is to increase consumer rights and interests, and to impose heavier responsibilities on financial companies such as banks and securities companies. In particular, when a financial company sells financial products, it focuses on the imposition of six obligations: △conformity principle △appropriateness principle △duty to explain △prohibition of unfair business △prohibition of unfair solicitation △prohibition of false exaggerated advertisement

Here, the conformity principle states that financial companies can only recommend financial products designed similar to the consumer’s investment tendency, such as risk-taking and stability-oriented. In addition, according to the principle of adequacy, financial companies must inform them in advance if the financial products that consumers decide to invest do not match their property and investment preferences.

This law of law was created on the background of’incomplete sales’, which has been deeply rooted in the financial sector. During the 2008 foreign exchange derivative KIKO crisis, the necessity was raised for the first time as SMEs exported to Korea suffered great damage.

Then, in 2011, when the bankruptcy of savings broke out, discussions began in the National Assembly. At the 18th National Assembly, then Democratic Party lawmaker Park Seon-sook made the first proposal. However, at the time of the Lee Myung-bak and Park Geun-hye administrations, it was not possible to cross the threshold of the National Assembly as a keynote at the time of easing financial regulations.

Afterwards, the Moon Jae-in administration began to gain momentum. Shortly after the inauguration of President Moon Jae-in in May 2017, the Financial Services Commission proposed the prohibition against law as government legislation. In the following two years, it was predicted to follow the same procedure as before, as the National Assembly’s Political Affairs Committee failed to pass the legal review subcommittee, but the necessity of enacting it was attracted attention as the private equity accident broke out in 2019. In that year, the damages of the DLF and Lime incidents were reported, and the ban on law in November passed the National Assembly’s political committee. After passing the National Assembly Judiciary Committee and the Main Assembly Committee in March last year, it was implemented in 11 years.

Despite the mixed evaluation of the gold law, the reason why incomplete sales of financial products are still in progress is the reason why they are raising a lot of expectations. In particular, in the past five years, the damage from incomplete sales of financial products such as banks and securities companies has been concentrated on the elderly.

According to the’Age Status of Incomplete Sales Victims for Five Years’ (2016-June of last year) submitted by the Financial Supervisory Service by Rep. Kim Hee-gon, 1,820 dispute mediation applications were filed in relation to the incomplete sales of products at banks and securities companies.

In particular, the elderly aged 60 or older accounted for 782 cases (43.0%). It was found that applications for dispute mediation of incomplete sales of financial products by elderly people over 60 years of age have increased sharply since 2019, when insolvent private equity funds such as Lime began to break out.

The number of applications for settlement of disputes on bank products by the elderly over the age of 60 has increased significantly from 46 in 2018 to 234 last year. Until June of last year, 175 cases were received. For securities company products, there were 32 applications for dispute mediation in 2018 and 23 in 2019, but last year it recorded 106 cases in half a year.

It is expected that the prohibition law in effect on this day will drastically reduce such problems.

Lee Jung-moon, a member of the National Assembly’s political committee, said, “There are concerns about the contraction of the financial industry, but nevertheless, because the protection of financial consumers is more important, we welcome the enforcement.” I look forward to it.”