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Policy Framework for Financial Consumer Protection in Korea: Focusing on the Financial Consumer Protection Act of 2020

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  • Ko Dong Won

    (Professor of Financial Law, Sungkyunkwan University Law School, Seoul, Korea; LLB, Seoul National University; SJD, Duke University School of Law)

Abstract

In Korea, the unified Financial Consumer Protection Act (FCPA) was enacted in March 2020, and will come into effect in March 2021, to consolidate dispersed provisions relating to financial consumer protection under the relevant financial regulation laws such as banking law, capital market and securities law, and insurance business law, and to set up a new regime capable of further enhancing financial consumer protection. As a single unified law for financial consumer protection, the FCPA is considered a good model for other countries that are attempting to reform their financial consumer protection systems. In general, the FCPA establishes a robust framework to promote financial consumer protection, including (i) six principles for business conduct such as suitability rule and explanation duty, (ii) consumers’ rights to terminate unlawful contracts, (iii) a financial supervisor’s product intervention power, and (iv) improvements to the financial dispute mediation system. However, further enhancements to financial consumer protection are needed. Therefore, this article suggests additional improvements, including allowing binding mediation decisions and ‘class’ dispute mediation and establishing a twin-peaks regulatory model of financial regulation.

Suggested Citation

  • Ko Dong Won, 2020. "Policy Framework for Financial Consumer Protection in Korea: Focusing on the Financial Consumer Protection Act of 2020," International Review of Financial Consumers, Sciendo, vol. 5(2), pages 1-10.
    • Handle: RePEc:vrs:irfinc:v:5:y:2020:i:2:p:1-10:n:1001
    DOI: 10.36544/irfc.2020.5-2.1
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