The Fair Trade Commission announced on June 9 that the revised enforcement decree for the so-called 'Consumer Protection Laws'—which include the Door-to-Door Sales Law, Advertising Law, and Installment Sales Law—has been approved by the Cabinet. The new regulations will take effect on July 1, following the administrative notice issued in March.
This amendment aims to enhance deterrence against legal violations in areas where consumer harm is recurrent. The Fair Trade Commission has responded to criticisms regarding the ineffectiveness of fines by strengthening the criteria for imposing penalties and revising the criteria for reductions.
Specifically, the maximum penalty for habitual offenders will increase from 50% to 100%. The period for considering past violations will also extend from three years to five years.
As a result, businesses with violations in the past five years may see their fines increase by up to two times, depending on the number and severity of past infractions. Notably, businesses that have violated the law four or more times could face a maximum penalty increase of 100%.
Conversely, the criteria for reducing fines, which previously favored businesses, will be significantly tightened.
Under the old rules, businesses could receive a fine reduction of up to 30% for efforts to compensate consumers for damages. This will now be capped at 10%. In cases involving the Advertising Law, businesses could receive reductions of up to 20% for cooperating with investigations and reviews, but this will now only apply if they cooperate throughout the entire process, with a maximum reduction of 10%.
The Fair Trade Commission explained that these adjustments were made in response to concerns that excessive reductions were being granted for compliance obligations that should be expected from businesses.
Additionally, the criteria for imposing fines for false and exaggerated advertising will be strengthened.
The Fair Trade Commission has raised the penalty rates for 'serious violations' and 'very serious violations' under the Advertising Law. This reform allows for higher fines for more egregious advertising practices.
In particular, the penalty rate for serious violations will increase from 0.8-1.6% to 1.5-1.8%, while the rate for very serious violations will rise from 1.6-2.0% to 1.8-2.0%.
A Fair Trade Commission official stated, "This measure aims to strengthen accountability for repeated legal violations in areas with significant consumer harm and to enhance the effectiveness of the fine system. We expect it will contribute to establishing market order and protecting consumer rights."
* This article has been translated by AI.
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