Notification of electronic payment transactions 
Notification of payment transactions
- Where an electronic payment is made, the business operator, an online shopping mall operator shall promptly notify the consumer of such a fact by using such means as e-mail, telephone, short message service (SMS), or facsimile. In addition, when notifying service charges on a given date each month, the transaction details, service charges, and contact details (telephone number, e-mail address, etc.) for each service provider that has supplied products, etc. shall be specified (Article 8(3) of the Act on the Consumer Protection in Electronic Commerce, etc. and Article 5 of the Enforcement Regulations of the Act on the Consumer Protection in Electronic Commerce, etc.).
Sanctions for violations
- Where the operator fails to perform his/her duty under the above provision, the Fair Trade Commission may order him/her to take corrective measures. Where the violation is repeated despite the order to take corrective measures, an order to take corrective measures is not complied with, or corrective measures alone are deemed insufficient to prevent damage to consumers or deemed impossible to compensate consumers for their damages, the Fair Trade Commission may order to fully or partially suspend the business for a fixed period of up to 1 year or impose upon the relevant operator penalty surcharges (Subparagraph 1 of Article 32(1), Article 32(4), and Article 34(1) of the Act on the Consumer Protection in Electronic Commerce, etc.).
Obligation to subscribe to the escrow system or consumer damage compensation insurance
Safe purchasing service system
- Where an online shopping mall operator engages in sales via a prepaid mail order that allows him/her to receive payment in part or in whole prior to the provision of goods, the operator shall subscribe to the escrow system or consumer damage compensation insurance so as to ensure that consumers benefit from safe purchasing service (Article 24(2) of the Act on the Consumer Protection in Electronic Commerce, etc.).
Q. Do I have to subscribe to the escrow system or the consumer damage compensation insurance?
A. An online shopping mall operator must subscribe to the escrow system or the consumer damage compensation insurance in order to ensure that consumers benefit from safe purchasing service.
The escrow system refers to a transaction safety device in which escrow service providers with public confidence (banks, PG companies, etc.) keeps the amount of payment made by consumers if the consumers wish to secure safe purchases, and then forwards the amount paid by consumers to operators after the delivery of the products is completed by online shopping mall operators.
An online shopping mall operator must sign a contract with an escrow service provider in advance to allow the consumers to select and use the escrow system when making payment for purchases. In the event where a contract is signed, the operator is allowed to put a notice of such fact, and the operator shall not put such notice or a notice similar thereto when the escrow system is not available.
The consumer damage compensation insurance is designed to compensate consumers for damages arising from non-receipt of products after making payment, and it constitutes either an insurance contract pursuant to the Insurance Business Act or a debt payment guarantee contract according to Article 38 of the Act on the Establishment, etc. of Financial Services Commission.
Sanctions for violations
- Any person who fails to enable consumers to use the escrow system or subscribe to the consumer damage compensation insurance notwithstanding his/her obligation to do so shall be subject to an administrative fine not exceeding KRW 10 million (Subparagraph 4 of Article 45(3) of the Act on the Consumer Protection in Electronic Commerce, etc.).
- Where an online shopping mall operator fails to perform his/her duty in relation to the escrow system or the consumer damage compensation insurance, the Fair Trade Commission may order him/her to take corrective measures. Where the violation is repeated despite the order to take corrective measures, an order to take corrective measures is not complied with, or corrective measures alone are deemed insufficient to prevent damage to consumers or deemed impossible to compensate consumers for their damages, the Fair Trade Commission may order to fully or partially suspend the business for a fixed period of up to 1 year or impose upon the relevant operator penalty surcharges (Subparagraph 1 of Article 32(1), Article 32(4), and Article 34(1) of the Act on the Consumer Protection in Electronic Commerce, etc.).