The right to terminate illegal contracts can be exercised upon signing up for products such as consumers and incomplete sales.
Financial companies, obligation to comply with six sales regulations, including the duty of explanation and the principle of conformity
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The era of financial products being refunded has arrived. Financial products can also withdraw their intention to subscribe and get the money already paid back.
The Financial Services Commission announced on the 25th that the Financial Consumer Protection Act (the Financial Protection Act), which provides financial consumers with the right to withdraw subscription and the right to terminate illegal contracts, will be enforced on the 25th.
Accordingly, the rights of financial consumers are further strengthened. In the future, financial consumers who have the right to withdraw their subscription can freely withdraw the contract within a certain period of time after subscribing to all financial products such as loans, insurance, and funds in principle.
In addition, if a product is subscribed to a financial company through incomplete sales, etc., the right to terminate the contract can be exercised.
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.
Conversely, the responsibility of financial companies has grown even further. When selling financial products, financial companies should check 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.
If a financial company engages in unfair business practices such as incomplete sales, it is subject to a punitive penalty up to 50% of its income. Financial companies must also prove that there was no intention or negligence when consumers sign up for financial products without hearing the explanation properly and claim damages from financial companies for losing money.
It is also prohibited to engage in unfair business practices, such as tying up other products when lending, or engaging in unfair solicitation activities, such as disclosing the contents of financial products differently.
The right for consumers to request data from financial companies to respond to dispute settlement and litigation has also been newly established.
In addition, the seller, not the customer, has the responsibility to prove the existence of intention or negligence in the event that the seller has inflicted damage to the customer by violating the explanation obligation. The Financial Services Commission explained that the responsibility for proving damages has been shifted.
Although the law came into force on this day, the financial authorities are in a position to give a grace period in consideration of the period of adaptation of the financial industry. The Financial Services Commission decided to suspend the application of some regulations for up to six months.
For more information, please visit the website of the Financial Supervisory Service.
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