Fair Trade Commission at the Government Sejong Building in Sejong City. [Photo by Yu Dae-gil]
As of March, the number of registered prepaid installment contract holders has increased by 1.71 million from the previous year, totaling 11.31 million. The amount of deposits also rose by 1.196 trillion won compared to last year, reaching 11.3544 trillion won.
On June 19, the Fair Trade Commission released data on the current status of prepaid installment companies and deposit protection measures. Prepaid installment transactions involve consumers making advance payments for services such as funerals or travel, which are provided later.
This year, a total of 76 prepaid installment companies were registered. Among these, six companies exclusively handle travel products, while ten companies offer both travel and funeral services, each down by two from the previous year. In contrast, the number of companies focusing solely on funeral services increased by four to 60.
The Fair Trade Commission has implemented strict regulations to protect consumer deposits. Notably, prepaid installment companies are required to secure 50% of the deposits received from consumers through compensation insurance from banks or mutual aid associations.
For installment travel products, a recent amendment to the enforcement decree of the installment transaction law has established a legal obligation for prepaid installment companies to protect deposits. The authorities raised the deposit protection ratio from 40% last February to 50% starting this February.
During last year's National Assembly audit, concerns about consumer harm from prepaid installment companies were highlighted, prompting the Fair Trade Commission to focus on consumer rights protection this year. At that time, Fair Trade Commission Chairman Jeong Byeong-ki stated that he would consider collaborating with the Financial Services Commission to develop a system for managing the soundness of deposits.
A Fair Trade Commission official noted, "We are working on amending the installment transaction law to strengthen the management and supervision of prepaid installment companies, aiming to prevent the misappropriation of deposits by restricting credit extensions to controlling shareholders or related parties of funeral service companies."
On June 19, the Fair Trade Commission released data on the current status of prepaid installment companies and deposit protection measures. Prepaid installment transactions involve consumers making advance payments for services such as funerals or travel, which are provided later.
This year, a total of 76 prepaid installment companies were registered. Among these, six companies exclusively handle travel products, while ten companies offer both travel and funeral services, each down by two from the previous year. In contrast, the number of companies focusing solely on funeral services increased by four to 60.
The Fair Trade Commission has implemented strict regulations to protect consumer deposits. Notably, prepaid installment companies are required to secure 50% of the deposits received from consumers through compensation insurance from banks or mutual aid associations.
For installment travel products, a recent amendment to the enforcement decree of the installment transaction law has established a legal obligation for prepaid installment companies to protect deposits. The authorities raised the deposit protection ratio from 40% last February to 50% starting this February.
During last year's National Assembly audit, concerns about consumer harm from prepaid installment companies were highlighted, prompting the Fair Trade Commission to focus on consumer rights protection this year. At that time, Fair Trade Commission Chairman Jeong Byeong-ki stated that he would consider collaborating with the Financial Services Commission to develop a system for managing the soundness of deposits.
A Fair Trade Commission official noted, "We are working on amending the installment transaction law to strengthen the management and supervision of prepaid installment companies, aiming to prevent the misappropriation of deposits by restricting credit extensions to controlling shareholders or related parties of funeral service companies."
* This article has been translated by AI.
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