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Online Shopping
Electronic transactions
Electronic financial transactions- The term "electronic financial transaction" means any transaction wherein a financial company or an electronic financial business operator provides financial products and services through electronic apparatuses (hereinafter referred to as "electronic financial business") and users use them in a non-face-to-face and automated manner without any direct contact with the employees of the financial company or electronic financial business operator (Article 2-1 of the 「Electronic Financial Transactions Act」).
- Types of electronic financial transactions include internet banking, online inter-account transfer, electronic fund transfer, and mobile banking, etc.
※ Online cell phone-based payment of small amounts
You can check the details of online cell phone-based payment of small amounts in mobile telecom providers’ communications billing services terms and conditions.
If you have incurred loss or damages in this service, you can ask the customer center of the vicarious payment service company or the Cell Phone/ARS Payment Arbitration Center (☎1644-2367) for payment cancellation or refund.
Checking the terms and conditions when signing a contract Obligation to explain the terms and conditions when signing a contract- Any financial company or electronic financial business operator shall clarify the terms and conditions when concluding a contract for electronic financial transactions with a user and, at the request of the user, deliver a copy of the terms and conditions to the user in the form of e-document transmission (including transmission by e-mail), fax, mail, or personal delivery, and when a user requests to explain the contents of the terms and conditions, explain the major content of the terms and conditions to the user, using one of the following methods (Article 24(1) of the 「Electronic Financial Transactions Act」; Article 40(2) and (3) of the 「Regulation on the Supervision of Electronic Financial Activities」(FSC Public Notice No. 2015-18 dated June 24, 2015)):
· First-hand explanation of major content of terms and conditions to users.
· Providing an explanation of the major content of terms and conditions through an electronic device in a way easy for the users to understand and having them indicate their full understanding through an electronic device.
- Punishment for violation
· No financial company or electronic financial business operator shall, when having concluded a contract in violation of the foregoing, assert that the details of the terms and conditions are included in the relevant contract (Article 24(2) of the 「Electronic Financial Transactions Act」).
· Any act of failing to indicate, explain, or distribute the terms and conditions in violation of the foregoing shall be punished by a fine for negligence not exceeding KRW 10 million (Article 51(3)-8 of the 「Electronic Financial Transactions Act」).
Payment notice Obligation to serve a payment notice- Where electronic payment is made, an online shopping mall business shall notify the consumer of such fact by a method like telephone, fax, cellular phone, etc. (said procedure may be omitted if consented to by the consumer) and enable the consumer to view the data on the electronic payment anytime. (Article 8(3) of the 「Act on the Consumer Protection in Electronic Commerce, etc.」 and Article 5 of the 「Enforcement Rule of the Act on the Consumer Protection in Electronic Commerce, etc.」)
· For instance, if a person (X) purchases goods or the like by connecting to a cybermall operated by a business with the ID of another person (Y) but using his own credit card, the business and the credit card company shall inform Y and X, respectively, of the purchase. (「Guidelines on the Consumer Protection in Electronic Commerce, etc.」, Ⅱ, 6, Da)
- The business and electronic payment operator and the like may separate the content of information to be communicated by each as follows to prevent consumers’ confusion(「Guidelines on the Consumer Protection in Electronic Commerce, etc.」, Ⅱ, 6, Ra):
· Information to be communicated by the business: important purchase-related information like price and payment conditions, etc.
· Information to be communicated by the electronic payment operator: payment-related information like the name of the payer, date of payment, payment method, amount paid or whether discount is involved, etc.
- Punishment for violation
· Where an online shopping mall business fails to communicate the fact of price payment in violation of the foregoing, the Fair Trade Commission may order it to take corrective measures or may impose a penalty surcharge. If the business fails to take the necessary step despite the order to take corrective measures, the Fair Trade Commission may order the suspension of all or part of the business (Articles 32(1)-1, 32(4) and 34(1) of the 「Act on the Consumer Protection in Electronic Commerce, etc.」).
Request for correction of errors in electronic financial transactions User’s request for correction of errors- When a user recognizes the existence of any error in the electronic financial transaction, he/she may request the relevant financial company or electronic financial business operator to correct such error (Article 8(1) of the 「Electronic Financial Transactions Act」).
Correction made by a financial company or an electronic financial operator- Upon receipt of a request to correct an error, a financial company or an electronic financial business operator shall immediately investigate and make appropriate corrections to the processed transaction and inform the user of the causes for error and the results of correction by document, telephone or email within two weeks of receiving such request (Article 8(2) of the 「Electronic Financial Transactions Act」 and Article 7-2 of the Enforcement Decree of the Electronic Financial Transaction Act).
- Upon recognizing the existence of any error in the electronic financial transaction, a financial company or an electronic financial business operator shall immediately investigate and make appropriate corrections to the processed transaction and inform the user of the causes for error and the results of correction by document, telephone or email within two weeks of recognizing such error (Article 8(3) of the Electronic Financial Transactions Act and Article 7-2 of the 「Enforcement Decree of the Electronic Financial Transaction Act」).
- Punishment for violation
· When a financial company or an electronic financial business operator fails to inform the user of the results of correction in violation of the foregoing, the Financial Services Commission may order the full or partial suspension of the relevant business concerned (Article 43(2)-1 of the 「Electronic Financial Transactions Act」).
Safe purchase service system Escrow system for payment deposit and consumer damage compensation insurance contract- Where a consumer chooses to use an escrow system for payment deposit or requires the mail order distributor to conclude a contract, etc. on consumer damage compensation insurance with respect to a prepaid mail order, the mail order distributor shall allow the consumer to use such system or conclude the contract, etc. on consumer damage compensation insurance (Article 24(2) of the 「Act on the Consumer Protection in Electronic Commerce, etc.」).
※ “Prepaid mail order” refers to a mail order wherein the consumer pays all or part of the price of such goods, etc. before being supplied with them (Article 15(1) of the 「Act on the Consumer Protection in Electronic Commerce, etc.」).
- However, prepaid mail order shall not apply where a consumer performs any of the following transactions (Article 24(3) of the 「Act on the Consumer Protection in Electronic Commerce, etc.」 ):
· A transaction of paying the price of goods, etc. with a credit card as defined in Article 2(3) of the Specialized Credit Finance Business Act. In such cases, if a consumer fails to receive the goods, etc., the credit card company as defined in Article 2.2-2 of the Specialized Credit Finance Business Act shall cooperate for the prevention and recovery of damage to the consumer, such as cancellation of the settlement of purchase price.
· A transaction of purchasing goods, etc. which are sent through information and communications networks or delivery of which cannot be ascertained by a third party referred to in Article 13(2)10 of the Act on the Consumer Protection in Electronic Commerce, Etc.
· A transaction of purchasing goods, etc. supplied in installments for a certain period of time
· Other transactions determined and publicly notified by the Fair Trade Commission as not requiring the escrow system or the conclusion of a contract, etc. of consumer damage compensation insurance or as having difficulty in the utilization of such escrow system or the conclusion of such contract because the safety of purchase is firmly secured by any other Act or there exists any other cause similar to those provided in the above.
Escrow system for payment deposit- “The escrow system for payment deposit" refers to a system that ensures the safety of transaction. Under the system, a reliable depositor (referring to a bank or a payment guarantee business or the party stated in Article 19-3(1) of the 「Enforcement Decree of the Act on the Consumer Protection in Electronic Commerce, etc.」) keeps a consumer’s payment and pays it to the business after completion of the delivery of goods.
Consumer damage compensation insurance contract- A “consumer damage compensation insurance contract” refers to an insurance contract and the like signed between a business and an insurance company to compensate for damages incurred by a consumer due to the non-delivery of goods after paying the price (Article 24(1) of the 「Act on the Consumer Protection in Electronic Commerce, etc.」).
Punishment for violation- A business not allowing a consumer to use an escrow system for payment deposit or not signing the “consumer damage compensation insurance contract,” where it is required to do so, shall be punished by a fine not exceeding KRW 10 million (Article 45(3)3 of the 「Act on the Consumer Protection in Electronic Commerce, etc.」 and Subparagraph 2 of the attached Table 3 of the 「Enforcement Decree of the Act on the Consumer Protection in Electronic Commerce, etc.」).
- A business that uses a mark indicating the fact of having concluded a contract, etc. on consumer damage compensation insurance or of being allowed to use the escrow system or makes or uses other similar marks shall be punished by a fine not exceeding KRW 30 million (Article 42-2 of the 「Act on the Consumer Protection in Electronic Commerce, etc.」).
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