CDSC finds that LG Electronics is liable to “pay 100,000 won to each petitioner for compensation” in the review of a clothes dryer-related collective dispute.

- CDSC holds the business liable for quality assurance for the advertising of its dryer’s ‘automatic condenser cleaning’ function -

    With regard to the collective dispute mediation case where the consumers who had purchased or used LG Electonics’dryers claimed a refund for their purchase price due to the dryer’s self-cleaning malfunction, the Consumer Dispute Settlement Commission (hereinafter referred to as the ‘CDSC,’ Chairperson Shin Jong-won) of the Korea Consumer Agency made a decision that LG should pay 100,000 won in compensation to each petitioner.

    ※ In order to promptly resolve a dispute related to collective consumer damages, a procedure for collective dispute mediation is commenced in case where the same or similar damage occurs to a group of consumers (more than 50) in accordance with the Framework Act on Consumers, and on October 14, the CDSC decided to commence its procedure for collective dispute mediation according to Article 68(2) of the Act.

    During the hearing of the case, LG Electronics argued that since condenser dust accumulation did not affect the dryer’s performance, there was no ground to judge it as a defect of the dryer; that the remaining condensate and the rust in the condenser had no possibility to influence human health because they do not flow into the dryer’s drum and come into contact with clothes within the drum; and that the company’s advertisement had been in congruence with the facts with regard to the dryer’s functions.

    In response to the argument, the CDSC determined that LG Electronics was responsible for the condenser dust accumulation, citing the advertisements explaining the concrete operational environment in which the condenser self-cleaning system is run. In detail, the CDSC added that the content of the advertisement constituted a promise for “quality assurance,” and that the company, accordingly, should be held responsible for the condenser dust accumulation, which was contrary to the advertisement. However, the CDSC found that LG Electronics had fulfilled its liability for quality assurance by announcing that it would provide a 10-year warranty for the condenser auto-cleaning system and by implementing the KCA’s recommendations on free repair service.

    However, the CDSC also found that, in its advertisement, LG Electronics said the condenser can self-clean at any time unconditionally while, in reality, the function worked only under certain conditions. It further found that such a statement had reasonably limited the consumer’s right of choice as the consumers presumably trusted advertising and purchased the dryers. As such, the CDSC concluded that LG Electronics should pay 100,000 won to each petitioner in consideration of the inconvenience consumers had suffered or would suffer from repairing the dryers.

    Meanwhile, the CDSC did not accept the petitioners’ claim that the remaining condensate and the rust in the condenser resulted in diseases such as skin irritation, saying it was difficult to prove the causal relationship between the two.

    The CDSC will prepare a written decision containing the above contents and send out the written mediation decision to the concerned party within 14 days after the date of the mediation decision. And the concerned party should notify the CDSC of their intention to accept or refuse the contents of the mediation decision within 15 days after receiving the written decision. If the concerned party accepts the decision, the mediation decision is as equally binding as a judicial reconciliation, and the CDSC may advise LG Electronics to submit a compensation plan for a person who is not the concerned party.

    The above-stated decision of the CDSC is of great significance in that it has emphasized the duty of businesses to provide accurate information by holding the businesses liable for quality assurance for their advertising.

    CDSC Chairperson Shin Jong-won said, “Going forward, we will make continued efforts to resolve collective disputes quickly and fairly by actively utilizing our collective dispute mediation procedure.”