Interest in finance is getting higher, did you know that the Financial Consumer Protection Act will be enforced from March 25, 2021 today? As the law was enacted, the foundation was laid for more protection of financial consumers’ rights than before.
Financial consumer protection law?
The bill is to further deepen the responsibilities of financial institutions such as banks for the purpose of protecting consumers who are using finance. There have been many discussions on this issue in the past, but we have not been able to find a solution because we have not passed the National Assembly.
However, the bill has been passed as the recent incomplete sales of financial products such as the DLF incident and the lime incident have occurred. Incomplete sales are the act of selling the financial products to the customer without explaining the basic contents of the product and the investment risk.
- First: Applying the six sales principles to most financial products
The six sales principles, which mean conformity principle, adequacy principle, explanation obligation principle, prohibition of unfair business practices, prohibition of unfair solicitation, false and exaggerated advertising, apply to most financial products, while these sales principles have been applied only toford or variable insurance, but now they are applied to financial products handled by most financial institutions such as deposits, loans, insurance subscriptions, credit card issuance.
The principle of suitability: We should 폰테크 recommend appropriate products considering the consumer’s investment propensity and investment experience.
The principle of adequacy: When a financial product that the consumer has corrected the investment does not fit the customer’s investment tendency or property, it should be informed in advance.
If you do not follow the two principles, you can be charged a maximum fine of 30 million won. If you do not follow the remaining sales principles, you will have to pay a punitive penalty, up to 50% of the related income.
- Second: New Consumer Rights
The second key to the implementation of the Financial Consumer Protection Act is that consumers have new rights. It is the right to terminate illegal contracts, withdraw subscriptions, and request data, and I will explain it one by one.
Unlawful contract termination: The right to demand termination within five years after the contract is concluded if the financial company does not comply with the six sales principles in joining financial products. Private equity funds, which have not been able to repurchase in the meantime, can also be terminated if they are illegal contracts.
Subscription withdrawal rights: All financial offerings, such as funds, loans, and insurance, could be withdrawn within a period of time, but not prepaid and debit payments such as pay.
Data reading rights: In the course of litigation and disputes with financial companies, financial product vendors can request data recorded and managed by financial companies. Since a system for recording and managing should be created by financial companies, the right to request is available from September 25th.
As the bill is implemented, consumers are responding to the expectation of the expectation, and it is a voice of concern that the consumer’s authority is strengthened, as well as good, but it is not ready to enforce the law yet.
In particular, the financial industry has pointed out that the guidelines are ambiguous. If consumers exercise their right to terminate illegal contracts, they are confused because they do not have detailed criteria for how much monetary compensation is made and what actions are recommended for sale.