#After finding the clothes needed at an online shopping mall, Mr. A immediately put them in the cart and completed payment. But even after several days, the clothing was not shipped, and the mall only sent a text saying the item he paid for was out of stock. Mr. A demanded a cancellation, but contact with the mall was cut off. Mr. A reported this to the Korea Consumer Agency (KCA), and the KCA notified the responsible local government, Seoul's Yongsan District. But Yongsan District remained silent.
There is the Korea Consumer Agency (KCA) under the Fair Trade Commission to promote consumer rights, but a survey found that cases that still appear not to have been remedied account for about half. Because the KCA does not have the authority to discipline companies on its own, its role ends with relaying the company's violations to the relevant local government. Local governments, which can impose administrative sanctions such as business suspensions and fines, often do not even respond to the KCA's notifications. The limits of the KCA, a quasi-governmental agency, are showing plainly.
According to Rep. Lee Jeong-mun's office of the Democratic Party of Korea on the 29th, the number of cases in which the KCA notified local governments and other related agencies of specific businesses' violations from January to August this year was 929, but the rate at which related agencies replied to the KCA with the outcome of their actions was only 47.4%.
Consumers can report to the KCA when a business fails to provide the goods or services it promised. If the KCA determines the business violated laws or regulations, it notifies the local government and asks for appropriate action. Because the KCA is a quasi-governmental agency, it cannot directly sanction companies and must rely on local governments.
To prevent additional consumer harm, local governments impose sanctions such as business suspensions or fines on businesses and inform the KCA of the outcome. But this year, they failed to reply in roughly 1 out of 2 cases. Although this year's reply rate has improved compared with 2020 to 2022, when it hovered in the 20% to 30% range, it is nearly 15 percentage points lower than last year's 61.9%.
Reply rates were particularly low among local governments in the greater Seoul area, where businesses are concentrated. The local government with the lowest reply rate over the past five years was Seoul's Yongsan District (9.1%). The KCA notified Yongsan District of 55 violations, but Yongsan replied to the KCA on only 5 of them. Regarding this, an official from Yongsan District said, "As we juggle other duties, the workload can increase," adding, "We will pay attention to replying going forward."
In addition, Incheon's Bupyeong District (11.5%), Seoul's Gangseo District (12.0%), Gyeonggi Province's Ansan (13.4%), and Gyeonggi Province's Gimpo (15.3%) were identified as local governments with low reply rates following Yongsan District.
Even when the KCA judges a company to be in violation, local governments do not impose sanctions because there is no mandatory provision. The Framework Act on Consumers stipulates that when the KCA handles a damage relief application and determines that a related party has violated laws or regulations, it shall notify the relevant agency and request appropriate measures.
However, there is no clause obligating the related agency—the local government notified by the KCA of the violation—to reply with the outcome. As a result, even when the KCA receives a legitimate report of damage from the public, there are cases where it does not lead to action against the company.
Among the Lee Jae-myung administration's 123 national policy tasks is establishing an obligation for local governments to take action and reply when the KCA notifies them of violations confirmed during damage relief. In addition, a plan to create a legal basis so that consumers who have not applied for damage relief can also receive collective redress has been adopted as a policy task. The government intends to amend the Framework Act on Consumers, but National Assembly approval is required, so it cannot be said with certainty at this point that the system will be improved.
Rep. Lee Jeong-mun said, "When local governments and related agencies ignore replying, the damage goes straight back to consumers," adding, "The legal obligation must be strengthened so that local governments are required to reply with the outcome of actions regarding KCA notifications, and the government must thoroughly check this as well."