Financial products
What is a “financial product”?
- A “financial product” refers to deposits and loans, financial investment products, insurance products, credit cards, etc. (see Subparagraph 1 of Article 2 of the Act on the Protection of Financial Consumers).
Types of financial products
- Financial products are categorized as ① deposit products, ② loan products, ③ investment products, and ④ indemnity products. If an individual financial product has attributes that fall under more than one product type, it is considered to belong to each respective product type [Article 3 of the Act on the Protection of Financial Consumers; Article 3 of the Enforcement Decree of the Act on the Protection of Financial Consumers; and Article 3 of the
Supervisory Regulations on Financial Consumer Protection].
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Classification
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Financial Product (Example)
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Deposit products
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▪ Deposits ▪ Trust funds ▪ Contracts where financial institutions receive money from general financial consumers and agree to pay back that money along with interest in the future (However, resident savings under the Housing Act are excluded.)
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Loan products
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▪ Loans ▪ Credit cards, facility rentals, annual installment sales, installment financing ▪ Lending ▪ Linked loans ▪ Contracts where insurance companies, etc., provide “money or other property of monetary value” (hereinafter “money, etc.”) to general financial consumers through bill discounting, accounts receivable purchasing (limited to contracts where money can be claimed from general financial consumers), loans, payment guarantees, or similar means, and agree to receive money, etc., and interest in the future (However, contracts related to export/import payment settlements, such as export bill purchasing, are excluded.)
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Investment products
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▪ Financial investment products ▪ Linked investments ▪ Trust contracts ▪ Investment management contracts ▪ Financial products with investment properties under Article 3(1) of the Financial Investment Services and Capital Markets Act
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Indemnity products
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▪ Insurance products ▪ Mutual aid ▪ Financial products similar to insurance products
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Disclosure of financial product comparisons
- The Financial Services Commission can disclose comparisons of the main content of financial products by type so that general financial consumers can easily compare them (Article 32(1) of the Act on the Protection of Financial Consumers).
※ The content of each financial product comparison can be checked on the “At a Glance Financial Products home page operated by the Financial Supervisory Service at (
http://finlife.fss.or.kr).
- The range of financial products that the Financial Services Commission can disclose for comparison and the details that should be included in the comparison disclosure are as follows (Article 29(1) and (2) of the Enforcement Decree of the Act on the Protection of Financial Consumers; Article 27(1) and (2) of the Supervisory Regulations on Financial Consumer Protection).
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Scope of financial products for comparison disclosure
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Content to be included in the comparison disclosure
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▪ Deposits among deposit products ▪ Loans among loan products ▪ Collective investment securities among investment products ▪ Insurance among indemnity products ▪ Installment savings among deposit products ▪ Pension savings accounts ▪ Retirement pension systems
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▪ Interest rates ▪ Insurance premiums ▪ Fees ▪ Early repayment fee rates, risk ratings, and other matters that general financial consumers should be aware of ▪ The following details regarding the disclosed information: √ The department and contact information of the direct financial product seller that provided the information √ The time of the comparison disclosure ▪ Other matters deemed necessary for the protection of general financial consumers as determined by the head of the Financial Supervisory Service
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Meaning of financial consumers
What is a “financial consumer”?
- A “financial consumer” refers to the counterparty of a financial product seller in the conclusion of a contract related to a financial product or in the solicitation or acceptance of a subscription, or the counterparty of a financial product advisory service provider’s advisory service, which can be either a professional financial consumer or a general financial consumer (Subparagraph 8 of Article 2 of the Act on the Protection of Financial Consumers).
※ A “professional financial consumer” refers to a financial consumer who can bear risks according to a financial product contract, based on expertise in financial products or the size of owned assets, such as the Bank of Korea or financial companies (see Subparagraph 9 of Article 2 of the Act on the Protection of Financial Consumers).
※ A “general financial consumer” refers to a financial consumer who is not a professional financial consumer (see Subparagraph 9 of Article 2 of the Act on the Protection of Financial Consumers).
※ This content provides legal information on consumer protection regulations for various financial products, including financial transaction usage, electronic financial transactions, dormant deposits, deposit protection systems, and financial dispute resolution for general financial consumers.