"Congratulations, customer! You are a priority candidate for regular filing (tax) refund verification. Please check your new refund amount this year."
Tax platform application (app) Samjeomsam sent consumers advertising messages like this via KakaoTalk and other channels in 2023. But some consumers who tapped the "check" button in the message felt perplexed. There was no tax they could get back. Just from the message, they could not shake the feeling they had been "tricked."
Samjeomsam, which ran false ads targeting consumers, was sanctioned by the Korea Fair Trade Commission. This is the first time a tax platform has been sanctioned for unfair advertising. Samjeomsam has repeatedly stirred controversy not only for exaggerated ads, but also for the unauthorized collection of personal information and errors in refund amounts. With the National Tax Service recently recognizing these issues and launching a security project to block, at the source, access to Hometax and the "scraping" (copying) of national tax data by tax platforms including Samjeomsam, some say Samjeomsam's revenue model is being shaken.
◇ Tapped "19,7500 won refund arrived," found "0 won"
According to the Korea Fair Trade Commission (FTC) on the 31st, Jobis&Villains Corp., which operates Samjeomsam, was ordered to take corrective action and fined a penalty surcharge of 71 million won for violating the Act on Fair Labeling and Advertising. Samjeomsam provides a service that, based on personal information entered by users, guides them on the expected tax refund amount and acts as an agent for refund applications. Under the Framework Act on National Taxes, a taxpayer can get back any amount paid in excess if the taxes paid over the past five years exceed the actual tax liability.
The Korea Fair Trade Commission (FTC) found that Jobis&Villains Corp. sent KakaoTalk messages to about 2.55 million consumers that contained four types of false, exaggerated, and deceptive ads. The free "check expected refund" service was used in the process. A representative tactic was to use phrases like "a new refund has arrived," falsely telling consumers as if a new tax refund had appeared. Although Jobis&Villains Corp. is a private company and has no authority whatsoever to verify who is actually eligible for a refund, it misled consumers.
In May last year, Samjeomsam also sent an ad message saying, "Those who checked their refunds got back an average refund of 197,500 won." But that amount was for people who used the paid service. The actual average refund confirmed through the refund check was 65,578 won, revealing it was an exaggerated ad. It also turned out the company inflated refunds that can only be received if certain conditions are met, as if they were generally available. It even presented figures that differed from actual statistics, saying "1 in 2 workers is eligible for a refund."
Samjeomsam has been mired in successive controversies beyond false ads. In 2023, the Personal Information Protection Commission imposed a penalty surcharge of 850 million won and fines of 12 million won, saying Samjeomsam excessively collected users' personal information. But even afterward, Samjeomsam sparked controversy by excessively collecting personal information, including resident registration numbers and information on dependents. In addition, Samjeomsam is facing legal risk after being reported by the Korean Association of Certified Public Tax Accountants for acting as an unqualified tax agent and violating the Certified Tax Accountant Act through its tax agent (TA) service. Prosecutors previously decided there was no suspicion regarding those matters.
◇ Problem lies in involvement beyond brokering into tax affairs… National Tax Service also draws its sword
Industry officials criticize that while Samjeomsam touts its service as technology-based innovation, it is in fact excessively intervening in national tax administration processes. At the refund check stage, Samjeomsam, based on user consent, automatically logs into Hometax to query national tax data, then, when customers confirm their refund amount and pay, reviews additional deduction requirements and proceeds to file the refund application with the National Tax Service. The problem is that in this process, Samjeomsam collects users' personal information through false ads and, based on that, effectively designs and brokers the entire refund procedure.
This differs from other platforms whose main business model is brokering. Real estate platforms ZIGBANG CO. and Dabang, and mobility platform Kakao Mobility, are positively evaluated for reducing information asymmetry through brokering. Originally, these platforms also faced strong pushback from incumbent businesses, but they have been finding their footing as they gain users' trust. Meanwhile, Samjeomsam is effectively involved in tax affairs but does not bear related legal responsibility, while taking a 10%–20% commission on refund amounts.
The National Tax Service has also recognized these issues and is putting the brakes on Samjeomsam and other tax platforms by improving its own services. In Apr., the National Tax Service launched the one-click comprehensive income tax refund service. This service shows up to five years of refund amounts at once and, unlike Samjeomsam, which charges fees, is entirely free to use.
In Oct., the National Tax Service also launched a security project to fundamentally block tax platforms from accessing Hometax and scraping national tax data. The core of the project is to devise ways to block scraping, in which tax platforms ride on taxpayer credentials to access internal databases of the National Tax Service's Hometax and excessively query taxpayer information. In response, however, tax platforms are in discussions with the National Tax Service about transitioning to an open API (application programming interface).
As a result, Jobis & Villains, which operates Samjeomsam, is facing red flags for its business. The company's sales rose from 3.5 billion won in 2020 to 31.1 billion won in 2021, 49.6 billion won in 2022, and 50.7 billion won in 2023. Last year, it recorded sales of 86.2 billion won, the highest ever. However, as Samjeomsam faces a series of problems, business diversification has become inevitable.
Accordingly, Jobis&Villains Corp. is expanding its partnership services beyond taxes to all areas of daily life, including insurance, telecommunications, and mutual aid. The company recently acquired "microprotect," an insurtech company based on indemnity insurance, and "BLQ," which operates phone rental, used phone purchases, and refund services for riders. It also signed business agreements with the mobile brokering platform "Moyo" and the funeral service specialist "Goi Funeral Lab."