Memorandum of Understanding between the Korea Consumer Agency and the US Council of Better Business Bureau on Resolving Consumer Damages related to Cross-border Transactions

 - Resolving Korean consumer disputes from Northern American countries(U.S., Canada, and Mexico included) which Koreans purchase the most is now possible -

    On 26th May, 2016, in Washington, D.C., US, the Korea Consumer Agency(www.kca.go.kr) and US Council of Better Business Bureau (www.cbbb.org)* signed a memorandum of understanding(MOU) on resolving consumer damages related to cross-border transactions taking place between Korea and North America. Therefore, this has paved the way for Korean consumers to be properly compensated in cases of problems while traveling in Northern American countries or using Northern American countries’ online shopping malls.

* CBBB (Council of Better Business Bureau): The network hub for 112BBBs in North American countries including the U.S., Canada and Mexico that deals with consumer damages.

    According to the MOU, Korean consumers can file complaints (e.g., not receiving items purchased via Northern American online shopping sites) to the KCA and redress is provided through the CBBB, and the KCA handles complaints from Northern American consumers involving Korean business operators.

    The number of consumer complaints related to cross-border transactions is growing, but consumers are not properly compensated due to communication difficulties(language barrier) and different laws of the countries involved. The 1372 Consumer Counseling Center* is seeing a sharp rise in the number of complaints (812 cases in 2010 → 8,952 in 2015). In an integrated effort, starting from last Oct, KCA is running 『Cross border Transaction Consumer Portal (http://crossborder.kca.go.kr)』.

* 1372 Consumer Counseling Center (www.ccn.go.kr): An integrated nationwide hotline that receives consumer counseling requests, participated by 10 consumer organizations, 16 municipal/local autonomous bodies, and the KCA

    The rise in consumer complaints involving cross-border transactions is a global phenomenon. Accordingly, the OECD’s Committee on Consumer Policy (CCP) has recommended member countries to take action to better resolve complaints and problems arising from cross-border transactions, and the UN Commission on International Trade Law (UNCITRAL) is discussing ways to resolve consumer complaints related to cross-border transactions.

    On the domestic front, the government’s three-year economic reform plan includes measures to facilitate the use of domestic online shopping malls by foreign consumers and attract tourists (including medical tourists) from abroad. However, many have pointed out the lack of redress measures for foreign consumers. The MOU is anticipated to provide such redress, thus strengthening credibility among foreign consumers toward products/services available.

    The KCA established cooperative channels with the US, Canada, and Mexico along with Vietnam and Japan which had signed a MOU last year, to improve consumer rights related to overseas travel and overseas online shopping sites, and take preemptive measures against complaints related to cross-border transactions.

    Going forward, KCA plans to establish cooperative channels with counterparts in vibrant consumer markets (e.g., China, ASEAN, US, and EU) in order to resolve consumer complaints stemming from cross-border transactions.