Chinese online travel agency (OTA) Trip.com has been selling gift cards to Korean consumers without registering as a prepaid service provider with domestic financial authorities, and confusion is growing among consumers because the company failed to properly notify them about usage restrictions during the suspension of sales.
According to the industry on the 26th, Trip.com has been selling gift cards to domestic consumers without registering for the "prepaid electronic payment instrument issuance and management business (prepaid business)" with the Financial Services Commission (FSC). Under current law, gift cards are regarded as the same payment and refund instrument as prepaid balances, so businesses must register with the Financial Services Commission (FSC).
However, Trip.com evaded regulations by specifying in its user guide a workaround that allowed purchases and payments by changing the country and language settings to a specific region. In response, financial authorities ordered Trip.com earlier this month to immediately halt domestic sales of its gift cards.
The problem is Trip.com's response after the sales suspension. Trip.com deleted the gift card menu from its platform without prior notice. Previously, users could check their balance when the country and language settings were set to Korean, but the company removed that function. Trip.com sent a balance-check L.I.N.C by email when a gift card was purchased, but clicking it no longer connects. Some consumers complained, saying, "Did they just wipe out the previously accumulated prepaid balance without a word?"
However, it appears that if the country and language settings are switched to another region, balance inquiries and usage are still possible. Trip.com removed the menu only in the Korean-language environment. Critics say the company heightened consumer confusion by blocking access routes while failing to properly notify users of unfavorable changes such as sales suspension or usage restrictions.
Under the current Electronic Financial Transactions Act, if the terms of use for prepaid electronic payment instruments are changed to the disadvantage of consumers, they must be notified in advance. Specifically: prior notice of reduced terms of use; full refund of remaining balances; separate management of prepaid funds; and an obligation to notify at least seven days in advance and post for at least 30 days. By this standard, Trip.com should have taken basic user protection measures such as notifying the suspension of gift card sales, informing users of usage restrictions in the Korean-language environment, and providing refund and response procedures, but it did not comply.
Some in the industry say Trip.com is ignoring domestic law and sticking to an opaque "blackout response." An industry official said, "It is a clear reverse discrimination to sidestep legal obligations that domestic businesses must strictly follow just because it is an overseas platform," adding, "Given that access has become difficult in the Korean-language environment, immediate suspension of use and refunding of remaining balances should be carried out."