The Financial Supervisory Service (FSS) has revealed its achievements in consumer protection over the past year. While it has connected issues identified during the complaints and disputes process to system improvements and established a proactive supervisory framework, challenges remain due to short-term performance-driven sales practices and an increase in complaints and disputes.
On September 17, the FSS held a public report meeting in Yeouido, Seoul, to present its accomplishments and future directions regarding consumer protection.
The FSS reported that from July of last year to August of this year, it linked 94 cases identified during the complaints and disputes process to system improvements. Notably, during the TMON and WEMAKEPRICE incidents, it recognized the right of installment payment users to withdraw their applications, establishing dispute resolution criteria for 11,696 similar cases amounting to 13.22 billion won.
However, the FSS acknowledged that there are still areas for improvement in sales practices for financial products. Among bank-traded exchange-traded funds (ETFs), 94.6% of transactions were short-term trades within six months, yet 91.7% of these transactions were subject to upfront fees, which are unfavorable for short-term trading. This indicates a misalignment between the sales incentives of financial companies and consumer trading tendencies.
The FSS's capacity to handle the increasing number of complaints and disputes has not kept pace with their growth. The number of disputes processed rose from 11,578 in the third quarter of last year to 13,469 in the second quarter of this year, a 16.3% increase. During the same period, the number of complaints and disputes received increased from 34,628 to 40,668, a 17.4% rise, slightly outpacing the increase in processed cases.
Lee Se-hoon, the FSS's Chief Deputy Commissioner, stated in a pre-briefing, "We still have a long way to go," comparing the progress to running a marathon, saying, "We have only covered about 5 kilometers of the 42-kilometer race."
Consumer advocates have pointed out that relying solely on recommendations and best practices is insufficient to change the sales practices of financial companies. Moon Mi-ran, chair of the Consumer Citizens' Association, remarked, "Current measures are formulated as best practices, lacking binding force and penalties for violations. We need to create and sell products that provide real benefits to consumers, going beyond mere procedural compliance."
Looking ahead, the FSS plans to solidify its proactive supervisory framework in the design and sales processes of financial products and enhance its capacity to handle complaints and disputes. It will also expand its platform for addressing financial crimes affecting consumers.
Lee Chan-jin, the FSS Commissioner, emphasized, "Consumer protection is not a peripheral issue but the foundation of trust that allows finance to exist. The real achievement will be the changes consumers feel in the financial field, making this report not a conclusion but a starting point."
On September 17, the FSS held a public report meeting in Yeouido, Seoul, to present its accomplishments and future directions regarding consumer protection.
The FSS reported that from July of last year to August of this year, it linked 94 cases identified during the complaints and disputes process to system improvements. Notably, during the TMON and WEMAKEPRICE incidents, it recognized the right of installment payment users to withdraw their applications, establishing dispute resolution criteria for 11,696 similar cases amounting to 13.22 billion won.
However, the FSS acknowledged that there are still areas for improvement in sales practices for financial products. Among bank-traded exchange-traded funds (ETFs), 94.6% of transactions were short-term trades within six months, yet 91.7% of these transactions were subject to upfront fees, which are unfavorable for short-term trading. This indicates a misalignment between the sales incentives of financial companies and consumer trading tendencies.
The FSS's capacity to handle the increasing number of complaints and disputes has not kept pace with their growth. The number of disputes processed rose from 11,578 in the third quarter of last year to 13,469 in the second quarter of this year, a 16.3% increase. During the same period, the number of complaints and disputes received increased from 34,628 to 40,668, a 17.4% rise, slightly outpacing the increase in processed cases.
Lee Se-hoon, the FSS's Chief Deputy Commissioner, stated in a pre-briefing, "We still have a long way to go," comparing the progress to running a marathon, saying, "We have only covered about 5 kilometers of the 42-kilometer race."
Consumer advocates have pointed out that relying solely on recommendations and best practices is insufficient to change the sales practices of financial companies. Moon Mi-ran, chair of the Consumer Citizens' Association, remarked, "Current measures are formulated as best practices, lacking binding force and penalties for violations. We need to create and sell products that provide real benefits to consumers, going beyond mere procedural compliance."
Looking ahead, the FSS plans to solidify its proactive supervisory framework in the design and sales processes of financial products and enhance its capacity to handle complaints and disputes. It will also expand its platform for addressing financial crimes affecting consumers.
Lee Chan-jin, the FSS Commissioner, emphasized, "Consumer protection is not a peripheral issue but the foundation of trust that allows finance to exist. The real achievement will be the changes consumers feel in the financial field, making this report not a conclusion but a starting point."
* This article has been translated by AI.
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