Financial authorities reflect responsibilities for each life cycle in the Financial Services Act... Promotion of legislative supplementation

(Seoul = Yonhap News) Reporter Kang Soo-ryun and Kang Ryu-na = Financial authorities plan to supplement legislation by reflecting the responsibilities of manufacturers and sellers by life cycle in the Financial Consumer Protection Act to strengthen consumer protection.

Lee Chan-jin, head of the Financial Supervisory Service, said at the 'Financial Consumer Protection Performance Public Reporting Conference' held at the head office in Yeouido on the 17th, "We have established a system with guidelines in the short term, but there is a need to supplement it through legislation to ensure that the consumer protection laws are complete," and announced that he would cooperate closely with the Financial Services Commission.

This event was prepared to report on the achievements of the Financial Supervisory Service, including the 'Financial Consumer Protection Improvement Roadmap' promoted after the resolution to implement financial consumer protection in September of last year, and discuss points of improvement.

Director Lee pointed out, “Complaints and disputes continue to increase, and the practice of prioritizing short-term performance still persists in the financial field,” and added, “Unlike advanced consumer protection systems that have a consumer protection system spanning the entire product life cycle, the Financial Services Act focuses on sales activities.”

So far, the Financial Supervisory Service has established a preventive supervision system for each product life cycle, including design, manufacturing, sales, and after-sales management, and applied it as a guideline, with the intention of making efforts to legislate.

In addition, the Financial Supervisory Service manages volatility to prevent market volatility from expanding due to debt investment (investment with borrowed money) and leverage, while also preparing improvement measures such as credit loans and receivable transactions.

It was suggested as a solution to limit pending transactions by minors and require additional confirmation from elderly investors. It also includes a plan to provide a form of preliminary simulation, such as conditions for occurrence of reverse trading and possible range of losses.

In particular, as controversy arose over the increase in debt, including unpaid transactions by minors, it appears that the authorities are actively discussing measures to protect investors.

Senior Vice President Lee Se-hoon said in a preliminary briefing that day, "We are discussing details with the Financial Services Commission," and "We are approaching how to reduce investments using excessive leverage."

The Financial Supervisory Service also presented tasks for each industry.

In the banking industry, the trust's internal sales procedures and fee system will be improved, and the system for early detection of borrowers with concerns about delinquency will be advanced. In insurance, we plan to implement a comprehensive supervision plan for corporate insurance agencies (GAs), and in small and medium-sized finance, we plan to establish an integrated monitoring system for inclusive finance.

In addition, we plan to promote ▲strengthening the function of the financial crime platform for people's livelihood, ▲enhancing supervisory capacity in the digital era, ▲innovating the financial complaint and dispute system, and ▲innovating supervisory administration.

Senior Vice President Lee emphasized, “Financial consumer protection is gaining ground in terms of hardware,” and “the future task is to ensure that the preventive consumer protection system operates effectively and is internalized in the field.”

In response to the point that there is a conflict between financial consumer protection and the soundness of financial companies, he said, "In the long run, soundness can only be achieved if consumer protection is properly in place," and "(when regulating loans), we are working to (improve) areas from the consumer protection perspective, such as applying unfavorable interest rates or lower limits due to the superior position of financial companies."

Meanwhile, due to the Financial Supervisory Service's efforts to protect consumers, the number of voice phishing cases decreased by 46.0% and 53.3%, respectively, compared to last year, to 794 billion won and damage amount to 361.4 billion won as of July this year.

The number of civil complaints and disputes that led to supervision and inspection was 94 from July last year to August this year, and 3.1 trillion won worth of New Hope Hall, a support measure for vulnerable groups, was supplied.