Unfair advertisement posted by Korea Land Trust and Serim Construction. Provided by the FTC
Trust companies and construction companies that made advertisements that deceive consumers, such as “three houses for 100 million in front of Lake Park,” were sanctioned by the Fair Trade Commission.
The Fair Trade Commission announced on the 2nd that it imposed a corrective order against Daehan Land Trust and Serim Construction, which violated the Display Advertising Act by posting deceptive advertisements when selling officetels.
According to the Fair Trade Commission, the two companies sold officetels in Seosan City, Chungcheongnam-do from November 2016 to February 2019 and advertised “3 for 100 million” and “2 for 100 million” on banners. It attracted the attention of consumers by telling it as if it was possible to sell a large number of officetels with a small investment.
However, the actual investment amount was calculated arbitrarily by the two companies assuming the mortgage loan ratio of 70% and the conditions for refunding VAT for the rental business (10% of the pre-sale price). The actual investment amount may be larger, but it has caused misunderstandings by consumers because the concrete calculation basis was not explicitly disclosed. In addition, only 4 out of 7 types of rooms that can actually be sold for 2 or 3 units for 100 million won in the officetel.
Here, the two companies advertised as if a stable income would be possible by using expressions such as “Lifetime annuity 1 million won per month” and “Lifetime annuity, I will make a lifetime paybook”. However, the monthly rent is only expected based on the surrounding market price, and there is no means of guaranteeing rental income.
An official from the Fair Trade Commission said, “We expect that this measure will induce businesses to provide accurate information on profitable real estate and help consumers make investment decisions.”
Sejong= Youngha Son reporter [email protected]
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