Because of the "T-MEP incident" that occurred in 2024, consumers who bought travel products on the online malls Tmon and WEMAKEPRICE INC. did not take their trips, and the travel agencies that sold the products did not receive settlement payments. Both consumers and travel agencies are victims of the "T-MEP incident," but the first trial court found that the travel agencies must refund consumers.
The court said that because the party that signed the travel product contracts with consumers was the travel agency, the agency bears refund responsibility even if it did not receive sales proceeds from Tmon and WEMAKEPRICE INC.. By contrast, the payment gateway company (PG company) had no refund responsibility because it only routed the money consumers paid and did not ultimately receive and manage it.
◇Travel agencies must pay 1.357 billion won to consumers... PG company's responsibility not recognized
According to legal sources on the 30th, the Seoul Central District Court's Civil Division 29 (Presiding Judge Ko Seung-il, Director General judge) on the 16th ruled partly in favor of 539 victims of the T-MEP incident in the first trial of a suit to return payments filed against travel agencies and the PG company.
While recognizing the travel agencies' refund responsibility, the court dismissed all of the consumers' claims against the PG company. If the ruling is finalized, travel agencies must pay 1.357 billion won to the victims.
The issue began with the delay in settling T-MEP sales proceeds in Jul. 2024. Travel agencies sold various travel and lodging products to consumers through T-MEP, but did not receive settlement payments from T-MEP. Some agencies argued that, for this reason, it was difficult to refund consumers.
"Agencies that didn't receive settlement payments must still refund consumers"
The court found that even if a travel agency did not receive money from the online mall, it must fulfill its refund obligation when the consumer withdraws the offer.
The court also said the travel agency must prove that the withdrawal period had passed or that the provision of travel services had begun. Some agencies argued that more than seven days had passed from the ticketing date for airline tickets and therefore refunds could not be made, but the court said it was hard to acknowledge this because there was no evidence the tickets were issued.
Regarding this, attorney Lee Wang-min of law firm DR&AJU said, "The fact that the court recognized the agencies' duty to return payments will serve as a reference in similar cases."
Why was the payment gateway that routed the money excluded?
The court's view of the PG company was different. When a consumer paid by credit card, the PG company processed the payment and passed the money, minus fees, to another business. It was not the party that sold the travel products or provided the travel services.
The issue was whether the PG company falls under the "party that received the payment" in Article 18, Paragraph 11 of the Electronic Commerce Act. The provision requires joint responsibility for refunds upon withdrawal of offer when the mail-order seller, the contracting party, and the party that received the payment differ.
The court found that merely because the payment passed through the PG company's account does not make it the "party that received the payment." The PG company did not ultimately acquire the funds and only served an intermediary role for payment and settlement.
Attorney An Seo-yeon of Law Firm LIN said, "The court viewed the PG company as neither a party to the sales contract nor the entity that ultimately received or managed the payment, so it has no direct duty to refund consumers."
Applying existing precedent to a large-scale non-settlement event
In the past, courts also did not recognize refund responsibility solely because the payment passed through a PG company.
In Apr. 2014, the Incheon District Court did not recognize a PG company's refund responsibility in a case where some vouchers purchased on an online social-commerce site were not delivered. The court viewed the PG company as only passing along the payment and not the business that ultimately received and managed the funds.
Social commerce is an e-commerce model that sells certain items at dramatically reduced prices for a set period when a certain number of buyers gather. Tmon and WEMAKEPRICE INC. were among the representative social-commerce corporations.
The Seoul Central District Court also in May 2024 rejected a claim for restitution of unjust enrichment against a PG company in a case where voice-phishing proceeds passed through the PG company's virtual account service. The reason was that the PG company only provided the virtual account and settled payments, and the actual money went to someone other than the PG company.
Shin Hyun-jung, managing partner at Hyunil Law Group, said, "Existing precedent also did not recognize a PG company's duty to return money it did not ultimately acquire," adding, "This ruling applies that standard to the T-MEP non-settlement incident and distinguishes the responsibilities of travel agencies and PG companies."
Travel industry: "We're also non-settlement victims"... Attention on remaining suits
The travel industry is taking the ruling seriously. They did not receive travel product payments from T-MEP, yet must refund consumers.
A Yellow Balloon Tour official said, "Because sales proceeds were not settled properly, travel agencies also suffered direct non-settlement damage," adding, "Yellow Balloon Tour will continue to put customer protection first and faithfully follow related procedures." On whether to appeal, the official said, "We will decide after closely reviewing the written judgment."
This suit is part of a joint action in which about 3,000 victims who bought travel and lodging products through T-MEP sought the return of 7.7 billion won from travel agencies and the PG company. Five suits with the same claims were filed, and this ruling is the first first trial decision among them.
If this decision is finalized, there is a possibility that, in the remaining joint suits, travel agencies will have to return sales proceeds to consumers. However, the outcome may differ depending on each consumer's transaction details, such as how far the travel service was provided.