6 Sales Principles |
Substance |
Penalty for Violation |
Suitability Principle |
Prohibition of recommending unsuitable contracts based on the age or financial situation of the general financial consumer (see Article 17 of the Act on the Protection of Financial Consumers) |
Administrative fine of up to KRW 30 million (Article 69(2)1 through 4 of the Act on the Protection of Financial Consumers)
|
Appropriateness Principle |
Obligation to notify if a financial product is not appropriate based on the financial situation of the consumer who voluntarily wishes to purchase (see Article 18(1) and (2) of the Act on the Protection of Financial Consumers) |
|
Duty to Explain |
Obligation to explain the main content of the product that the general financial consumer must know (see Article 19 of the Act on the Protection of Financial Consumers) |
Administrative fine of up to KRW 100 million (Article 69(1)2 and 6 of the Act on the Protection of Financial Consumers) |
Prohibition of Unfair Business Practices |
Prohibition of forcing other product contracts, unfair guarantees, collateral, or benefits against the will of the general financial consumer (see Article 20 of the Act on the Protection of Financial Consumers) |
Administrative fine of up to KRW 100 million (Article 69(1)3 and 6 of the Act on the Protection of Financial Consumers) |
Prohibition of Unfair Solicitation |
Prohibition of providing definitive judgments on uncertain matters or conveying content that may be misunderstood as certain (see Article 21 of the Act on the Protection of Financial Consumers) |
Administrative fine of up to KRW 100 million (Article 69(1)4 and 6 of the Act on the Protection of Financial Consumers) |
Prohibition of False/Exaggerated Advertisements |
Prohibition of actions that mislead as if there is loss compensation or guaranteed profits (see Article 22 of the Act on the Protection of Financial Consumers) |
Administrative fine of up to KRW 100 million (Article 69(1)5 and 6 of the Act on the Protection of Financial Consumers) |