The Financial Supervisory Service is reviewing whether there were any legal violations related to the product structure and disclosure obligations after Coupang Financial sold a loan product with a maximum annual interest rate of 18.9% to marketplace sellers. The Financial Supervisory Service is said to be considering shifting to a formal inspection after completing an on-site review of Coupang Financial.
According to the financial authorities on the 4th, the Financial Supervisory Service is said to be discussing whether to shift to an inspection, focusing on whether the structure and risk disclosures of the "Coupang Seller Growth Loan," which Coupang Financial sold to marketplace sellers, were appropriate. The product carries a maximum annual interest rate of 18.9% and is facing criticism that it applied a relatively high rate to sellers by leveraging the superior position of a large retail platform.
However, the financial authorities view that, because the product's interest rate is within the cap (20% annually) under the Interest Limitation Act, the likelihood of a legal violation based on the rate level alone does not appear high.
Instead, they are looking into whether there were any violations of consumer protection rules throughout the product structure and explanation process. In particular, the collateral structure is being cited as a key issue. According to the loan transaction agreement and pledge agreement obtained by the office of Lee In-young of the Democratic Party of Korea, in the event of a debt default, Coupang Financial can exercise a pledge over the settlement receivables that a seller holds against Coupang and Coupang Pay and claim them directly.
For this product, the repayment amount for each settlement cycle is set by applying a contracted repayment rate of up to 20% of sales, and as a minimum repayment condition, the borrower must repay 10% of the principal every three months along with the interest accrued during that period.
If arrears continue because the minimum repayment condition is not met, the structure allows the financial company to recover the loan principal and interest by using as collateral the settlement funds the seller is to receive from Coupang and Coupang Pay.
The financial authorities are checking whether the effects and risks of this collateral structure were adequately disclosed during the product explanation and whether there was any possibility that, despite collateral being provided, the product could be mistaken for an unsecured credit loan.
An official at the financial authorities said, "We are examining whether there were any shortcomings in explaining the product structure and whether there were any exaggerated elements in the advertising process."