Rep. Jeon Jae-soo, "We must eradicate financial crimes with a strong system to protect financial consumers."
Rep. Jeon Jae-soo of the Democratic Party of Korea
[Infostock Daily= Reporter Park Hyo-sun] Amid a series of major financial accidents, including the suspension of derivatives-linked funds (DLF), Lime and Optimus redemption, Rep. Jeon Jae-soo of the Democratic Party of Korea(Busan North and Gangseo-gu gap) of the National Policy Committee of the National Assembly proposed a 'partial revision bill to the Financial Consumer Protection Act' on the 13th.
The law initiated by Rep. Jeon Jae-soo will introduce a 'punitive damages system' that allows consumers to claim compensation up to three times the amount of damages if consumer damage occurs due to illegal acts by sellers.
The current law requires the seller to be responsible for damages caused by intentional or negligence of the seller, but it has been pointed out that there is no clear regulation on the amount of compensation, which is insufficient to prevent violations of the law. It is pointed out that a stronger consumer post-relief system is needed.
The amendment introduced a punitive damages system that allows compensation to be claimed up to three times the amount of damages, and expanded the burden of proof of the seller, which is limited to 'violation of explanation obligations', to 'all violations' when claiming damages.
"The level of sanctions, such as penalties, which are received by businesses, is not enough compared to the expected gain of sellers from illegal activities. The introduction of the punitive damages system will help the financial industry to develop soundly and help the victims recover from damages by curbing violations of the law," said Rep. Jeon Jae-soo.
It will also revise the law to improve the financial consumer protection system. In order to strengthen consumer information provision, the seller has to estimate the amount of damages in case of investment-type product damage, and to make it mandatory to notify the sales commission of agents and brokers. In addition, it restricts the concurrent management of financial product sellers, and allows sellers to voluntarily submit and implement damage compensation plans.
Reporter Park Hyo-sun hs1351@infostock.co.kr
