Indemnification of financial companies
Scope and subject of indemnification
- When a user suffers any loss due to any of the following incidents, the relevant financial company or electronic financial business entity should be liable for indemnifying him or her for the loss (Article 9(1) of the “Electronic Financial Transactions Act”).
1. An incident caused by the forgery or alteration of the means of access
2. An incident caused in the course of electronically transmitting or processing the conclusion of a contract or a transaction request
3. An incident caused by the use of a means of access acquired by fraudulent or other illegal means by invading electronic apparatus for electronic financial transactions or an information and communication network
- Cases of dispute mediation decision
· Claim for damages due to mobile phone micropayment
Exemption of indemnification for financial companies, etc.
When burdened by user
- Notwithstanding Article 9(1) of the “Electronic Financial Transactions Act”, a financial company or an electronic financial business entity may require a user to fully or partially bear the liability for any loss in any of the following cases (Article 9(2) of the “Electronic Financial Transactions Act”).
· Where, with respect to any incident caused by the intention or gross negligence of the user, a prior agreement is made with the user to the effect that all or part of the loss may be borne by the user
· Where a corporate user (excluding any small enterprise defined in Article 2(2) of the “Framework Act on Small and Medium Enterprise”) suffers any loss although the financial company or electronic financial business entity fulfills the duty of due care reasonably required to prevent incidents, such as the establishment and strict observance of security procedures
Scope of intention or gross negligence of user
- The intention or gross negligence of the user shall be limited to that stipulated in the terms and conditions of electronic financial transactions within the following scope (Article 9(3) of the “Electronic Financial Transactions Act” and Article 8 of the “Enforcement Decree of the Electronic Financial Transactions Act”).
1. Where the user has rented a means of access or delegated the use thereof to a third person, or has offered the means of access as an object of transfer or security (excluding cases where an electronic prepayment means or electronic currency is transferred or offered as security)
2. Where a means of access is divulged or exposed, or left neglected despite knowing or being able to easily access the information that a third person is able to make an electronic financial transaction using the user’s means of access without authorization
3. Where an incident under Subparagraph 3 of Article 9(1) of the “Electronic Financial Transactions Act” occurs because the user refuses, without any good cause, to take additional security measures which, in addition to the confirmation under Article 6(1) of the “Electronic Financial Transactions Act,” a financial company or an electronic financial business entity requests to enhance security in electronic financial transactions
4. Where an accident under Subparagraph 3 of Article 9(1) of the “Electronic Financial Transactions Act” occurs because the user performs any of the following subparagraphs with regard to the medium, means, or information used for additional security measures referred to in 3 above
√ Divulging, exposing, or leaving it neglected
√ Renting it or delegating the use thereof to a third person, or offering it as an object of transfer or security