According to South Korea’s financial watchdog, the Financial Supervisory Service (FSS), consumer complaints filed against financial firms totalled 21,338 in the first quarter of this year, up 14.7% from a year earlier, with insurers being the target of most of the complaints. The complaints have prompted FSS to probe whether insurers have violated regulations in their practices. As a result of FSS’ investigations, South Korea’s Financial Services Commission issued a set of measures to protect consumers.
The measures consist of guidelines, which took effect on 1st July, to require, for example, insurers that are the subject of customers’ complaints to cut their employees' salaries while those employees who receive positive evaluations for effectively addressing consumer complaints will receive incentives in the form of higher salaries and promotions.
Insurers and other financial services providers have also been asked to bolster their consumer protection divisions by giving them the power to investigate employers. The divisions must be led by executive-level management and be independent and report directly to the CEOs of their respective organisations.
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