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On the 25th, the Financial Consumer Protection Act, which guarantees a wide range of rights to financial consumers, such as the right to withdraw from subscription and the right to terminate illegal contracts, will come into effect on the 25th.
Accordingly, consumers have the right to withdraw their contracts freely within a certain period of time for investment products such as insurance and loan products excluding parts such as guarantee insurance and linked loans, high-level financial investment products, high-level discretionary investment contracts, and some trust contracts. Have.
Just like a refund after buying a product, you can withdraw your intention to subscribe to financial products and get the money you have already paid back.
For insurance products, you can withdraw the subscription within 15 days from the date of receipt of the insurance policy or 30 days from the subscription date, whichever is earlier, and for investment products and loan products, within 7 days and 14 days from the date of signing the contract, respectively.
In addition, when selling financial products, financial companies are obligated to confirm the consumer’s property situation and transaction purpose, recommend suitable and appropriate products, and explain important matters such as the possibility of fluctuations in profits.
It is also prohibited to engage in unfair business practices such as tying up other products during loans, or engaging in unfair solicitation activities, such as reporting the contents of financial products differently from the facts.
If a financial company violates these sales principles, the consumer can exercise the right to terminate the illegal contract for one year from the date of knowledge of the violation, or five years from the date of signing the contract, whichever comes first.
In this case, since the contract becomes invalid from the point of termination, it is not possible to get back expenses such as loan interest and card annual fees paid before termination, but there is no need to pay additional fees such as penalty fees.
The right for consumers to request data from financial companies to respond to dispute settlement and litigation will also be established.
In addition, if the seller has inflicted damage to the customer by violating the explanation obligation, the seller, not the customer, should be responsible for proving the existence of intention or negligence. In some areas, the responsibility for proving damages is shifted.
If financial companies violate the obligation to explain, prohibit unfair business practices, prohibit unfair solicitation, and advertisement regulations among the six sales regulations, punitive penalties are imposed up to 50% of related income.
The bill of enactment of the Financial Consumer Protection Act, aimed at enhancing financial consumer rights and interests, passed a plenary session of the National Assembly in March last year, about eight years after its initial proposal.
Most of the provisions come into effect one year after the promulgation, but some regulations, such as the obligation to prepare internal control standards for financial product sellers, and provisions related to data access requirements, are delayed for up to six months.
Detailed information regarding the Financial Consumer Protection Act can be found in the information material for financial consumers and employees of financial companies posted on the Financial Supervisory Service’s website (www.fss.or.kr).
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