Withdrawal of subscription for investment products within 9 days
Requests for reading materials will be suspended for 6 months
Photo = Getty Image Bank
On the 25th, the Financial Consumer Protection Act, which provides consumers with the right to withdraw subscriptions and terminate illegal contracts, will be enforced on the 25th.
Accordingly, consumers can freely withdraw their contracts within the period for insurance and loan products excluding guarantee insurance and linked loans, high-level financial investment products, high-level investment discretionary contracts, and some trust contracts.
For insurance products, subscriptions may be withdrawn within 15 days from the date of receipt of the insurance policy or 30 days from the subscription date, whichever is earlier, and within 9 days (including consideration period) and 14 days from the date of signing the contract for investment products and loan products.
In addition, when selling financial products, financial institutions are obligated to check the property situation and transaction purpose of consumers, 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 to engage in unfair solicitation activities such as disclosing 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 time of termination, it is not possible to get back expenses such as loan interest and card annual fees paid before termination. However, there is no additional cost, such as a penalty.
In addition, consumers have the right to request data from financial companies to respond to dispute settlement and litigation. If the seller has inflicted damage to the customer by violating the duty of explanation, the seller, not the customer, is liable to prove the existence of intention or negligence. 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 will be in effect from this day, but some regulations, such as the obligation to prepare internal control standards for financial product sellers, and provisions related to requesting access to data, will be delayed for up to six months.
Details of the Financial Consumer Protection Act can be found in the information materials for financial consumers and employees of financial companies posted on the Financial Supervisory Service’s website.
Eunbit Go, reporter Hankyung.com [email protected]
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