▲ Financial Supervisory Service building
The financial authorities plan to pursue legislative supplements to strengthen consumer protection, such as reflecting the duties of manufacturers and sellers across the lifecycle in the Financial Consumer Protection Act.
Financial Supervisory Service Governor Lee Chan-jin stated at the National Report Meeting on Financial Consumer Protection Performance held at the main office in Yeouido on September 17, "Although we have prepared systems through guidelines in the short term, we need to supplement them so that consumer protection legislation is completed through legislation," adding that he will closely cooperate with the Financial Services Commission.
This event was arranged to report on the achievements of the Financial Consumer Protection Improvement Roadmap, which the FSS has pursued following its financial consumer protection practice resolution in September of last year, and to discuss supplementary points.
Governor Lee pointed out, "Complaints and disputes continue to increase, and practices prioritizing short-term performance still persist in the financial field," and added, "Unlike advanced consumer protection systems that have consumer protection systems spanning the entire lifecycle of products, the Financial Consumer Protection Act regulates primarily centered on sales practices."
The intent is to push for legislation, as the FSS has previously established and applied pre-preventive supervisory systems across product lifecycles—design and manufacturing, sales, and post-management—through guidelines.
In addition, the FSS will manage market volatility to prevent it from expanding due to leveraged investments (borrowing to invest), while also preparing improvement measures for credit financing and unsettled transactions.
Measures suggested include restricting unsettled transactions for minors and collecting additional confirmation forms from elderly investors.
It also includes providing a pre-simulation format regarding the occurrence requirements of forced liquidation and the potential range of losses.
In particular, as controversies have grown over increased leveraged investments including unsettled transactions by minors, it is interpreted that the authorities are actively discussing investor protection measures.
Senior Deputy Governor Lee Se-hun said in a pre-briefing on this day, "We are consulting on detailed contents with the Financial Services Commission," and "We are approaching how to reduce investments using excessive leverage."
The FSS also presented promotion tasks by financial sector.
In the banking sector, internal trust sales procedures and fee systems will be improved, and a system to early identify borrowers at risk of delinquency will be upgraded.
In insurance, comprehensive supervisory measures for general insurance agencies (GAs) will be pursued, and in small and medium-sized finance, an inclusive finance integrated monitoring system is planned to be established.
In addition, plans will be promoted to strengthen the functions of the public livelihood financial crime platform, enhance supervisory capabilities in the digital era, innovate financial complaint and dispute systems, and innovate supervisory administration.
Senior Deputy Governor Lee emphasized, "Financial consumer protection is settling down in terms of hardware," and "The future task is for the pre-preventive consumer protection system to operate effectively and become internalized in the field."
Regarding the pointing out that financial consumer protection and financial company soundness conflict, he said, "In the long run, soundness can be secured only when consumer protection is properly established," and added, "We are making efforts (for improvement) from the perspective of consumer protection regarding parts such as being applied with disadvantageous interest rates or receiving smaller limits due to the superior position of financial companies (during loan regulations)."
Meanwhile, due to the FSS's consumer protection efforts so far, the number of voice phishing occurrences and the damage amount by July of this year decreased by 46.0% and 53.3% compared to the annual total of last year, to 794 billion won and 361.4 billion won, respectively.
The number of complaints and disputes leading to supervision and inspection from July of last year to August of this year was 94, and Sae Hope Holssi, a support policy for vulnerable groups, supplied 3.1 trillion won.
(Photo: Yonhap News)
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