Consumer counseling related to overseas transactions in 2018 increased by 41.3% compared to the previous year

- Consumer complaints related to‘clothes and footwear’topped the list at 24.8% -

    In line with the growing popularity of overseas travel and overseas direct purchase (ODP), consumer complaints regarding overseas transactions are also increasing. According to the KCA, the number of consumer counseling cases related to overseas transactions, which were reported to Cross Border Consumer Portal operated by the KCA and 1372 Consumer Counseling Center run by the Korea Fair Trade Commission (KFTC), increased by 41.3% from 15,684 cases in 2017 to 22,169 cases in 2018.

□ ‘Overseas direct transaction’-related counseling sharply increased by 53.6% compared to the previous year

    An analysis of the 22,169 ODP-related consumer counseling cases revealed that ‘overseas transaction agent service* (purchasing agent, shipping agent)’ topped the list of consumer counseling, accounting for 52.7% (11,675 cases) of the total, followed by ‘overseas direct transaction** (overseas direct purchase)(39.4% or 8,740 cases).’

    * overseas transaction agent services: refer to purchasing (shipping) overseas goods or services through online shopping agents

    ** overseas direct transactions: refer to purchasing goods or services directly from overseas online shopping malls

    ‘Overseas direct transaction’ rose by 53.6% year-on-year, which was higher than the increase rate of ‘overseas transaction agent service (35.9%).’

□ ‘Clothes and footwear’-related consumer counseling accounted for the largest share, and ‘accommodation’-related counseling increased significantly.

    Of 22,136 counselling cases in which the transaction items were identified, consumer complaints related to ‘clothes and footwear (5,492 cases or 24.8%)’ accounted for the largest share of the total, followed by ‘flight ticket and service (4,349 cases or 19.6%),’ and ‘accommodation (4,317 cases or 19.5%).’

    Compared to the previous year (2017), ‘accommodation’ made the highest increase rate in consumer complaints with 70.5%, followed by ‘household products (67.4%),’ ‘IT products and electric home appliances (55.7%),’ and ‘flight ticket and services (50.2%).’

□ The most common reasons for the consumer complaints were related to ‘delay and refusal of cancellation, refund and exchange (40.4%).’

    Reasons for the consumer complaints were mostly related to ‘delay and refusal of cancellation, refund and exchange (8,961 cases or 40.4%),’ followed by ‘non-fulfillment (or incomplete fulfillment) of contractual obligations, including delay in delivery (4,092 cases or 18.5%),’ and 'unfair penalties and fees, and excessive prices (3,566 cases or 16.1%).'

□ Consumer counseling regarding business operators located in ‘Singapore’ accounted for the largest share at 31.3%.

    An analysis of the 7,965 ODP (overseas direct purchase)-related consumer counseling cases in which the country of the business operator in question was identified found that 2,494 cases (31.3%) came from Singapore, followed by China (including Hongkong and Macao)(1,342 cases or 16.8%), the U.S. (769 cases or 9.7%), and the Netherlands (723 cases or 9.1%). It seems that this is because with the growth in the number of users of global websites for booking accommodation and flight tickets, consumer complaints related to ‘Agoda (Singapore),’ ‘Trip.com (China),’ and ‘Booking.com (Netherlands)’ increased.

    In order to prevent consumer damage arising from overseas transactions, the KCA has produced and distributed ‘Checkpoints for the Prevention of ODP-related Consumer Damage,’ and ‘Guide on How to Use Credit Card Chargeback Services*.’ In addition, it has signed MOUs to further expand its cooperation with foreign consumer protection authorities, and plans to consult with them about how to resolve issues in relation to foreign business operators frequently causing consumer complaints and ODP-related consumer complaints.

    * chargeback services: refer to a service that consumers can request credit card issuers to cancel transactions in case consumers sustain damage from overseas transactions

    ** countries that have signed MOUs with KCA: the U.S., Japan, Thailand, Vietnam, Singapore, Hongkong, the U.K., Uzbekistan

    Meanwhile, the KCA advised that consumers should carefully check information on sellers and transaction terms, because it might be difficult to resolve complaints due to differences between the laws and institutions of countries and language barriers. It also stressed that consumers should make a request for help to ‘1372 Consumer Counselling Center’ in case they sustain damage from overseas transaction agent services, and to ‘Cross Border Transaction Consumer Portal (http://crossborder.kca.go.kr)’ for ODP-related consumer damage.