Consumers can get a full refund if they cancel their mobile accommodation booking within 1 hour

after making a contract

As demands for leisure activities increase and a variety of types of accommodation booking services are created, consumer damages related to accommodation booking via mobile devices are growing accordingly.

According to the Korea Consumer Agency (KCA), the number of consumer counselling cases regarding ‘accommodation booking via mobile devices’ reported at 1372 Consumer Counseling Center* is increasing annually, with 149 cases in 2015, 435 cases in 2016, and 156 cases as of the end of the first quarter in 2017.

* 1372 Consumer Counseling Center is a nationwide integrated consumer call center (1372, no regional code) that offers counseling services, and the KCA, consumer groups and local governments work together to provide counseling services.

□ Most of the reasons for damage redress applications are related to contract.

Out of 591 consumer counseling cases reported during Jan. 1, 2016~Mar. 31, 2017, 87 cases were classified as damage redress applications. More specifically, among those 87 cases, 73 cases (83.9%) were related to ‘contract’ including contract cancellation, nonfulfillment of contract and subscription withdrawal, and 6 cases (6.9%) were about ‘unfair act’. Also, counseling cases for ‘terms and conditions’, ‘quality’ and ‘labelling/advertisement’ were 2 (2.3%) respectively.

□ Non-refundable product rates are different by business operator.

29 (33.3%) out of 87 applications for damage redress involved disputes. The consumer requested to cancel or change the contract within several minutes or 1 hour after making a contract due to his/her mistakes or remorse, but the business operators refused to refund arguing that the operators informed the consumer that the purchased products were non-refundable when selling the products.

After the KCA examined the rates of non-refundable products of 4 mobile accommodation booking applications* (DAILYHOTEL, YANOLJA, GOODCHOICE, HOTELNJOY) which came under the above type of case, it found out that 1.7% of DAILYHOTEL’s hotel accommodation products were non-refundable, and YANOLJA’s non-refundable products accounted for 5.25% of its motel and guesthouse accommodation products. The examination results also showed that GOODCHOICE’s non-refundable motel accommodation product rate amounted to 10%, and 10% of HOTELNJOY’s all types of accommodation products were not refundable. In addition, it has been shown that even for refundable products, the 4 mobile booking applications do not use the consumer dispute resolution standard (Fair Trade Commission Notification) as a refund policy.   * overseas business operators excluded

□ Cancellation policy generous to business operators but disadvantageous to consumers

17 (19.5%) out of 87 applications for damage redress were caused because accommodation booking service providers or lodging operators arbitrarily cancelled bookings or did not fulfill booking contracts. However, it has been shown that the business operators refused to compensate for the damages even though they were to blame for the contract cancellation (full or double booking).

For this reason, the KCA induced voluntary improvement of the accommodation booking service providers which were reported to have refused to refund when consumers cancelled their contract on the day of making the contract. As the result of the inducement, the 4 mobile accommodation booking applications decided to provide consumers with a full refund for all products including non-refundable products if the consumers cancel their contract within 10 minutes or 1 hour after making the contract. In addition, the KCA has called on consumers to ▲ confirm the exact date of stay, ▲ make a booking after carefully checking the accommodation business operators’ refund policies and ▲ use e-mails and text messages that can prove the time of cancellation when cancelling their booking.