– Publicity Efforts on Major Cases and Precautions for Small Business Owners –
The Korea Fair Trade Commission (KFTC, Chairperson Han Ki-jeong) announced that the “Task Force for Combating Illegal Online Advertising Agency Practices” (hereinafter “TF”) held a review meeting for investigation referrals for the first quarter of 2025. The TF reviewed advertising agencies that were frequently reported to the Online Advertising Fraud Reporting Center during the period and decided to refer seven of them for investigation.
The primary illegal practices of the referred agencies include:
▲ Inducing contracts by impersonating large platforms or public institutions,
▲ Misleading clients into believing they only need to pay small monthly fees, then charging the full amount for the entire contract period without consent,
▲ Failing to fulfill promises such as top search rankings or guaranteed sales,
▲ Disappearing after contract cancellation requests,
▲ Refusing refunds or imposing excessive penalties (up to 74%) upon immediate cancellation requests after signing.
Notably, five of the seven agencies referred for investigation used the same contract format or were operated by the same representative, indicating that a single entity had established multiple agencies.
The KFTC operates the “Online Advertising Fraud Reporting Center” to make it easier for small business owners to report illegal activities by advertising agencies and is consistently conducting educational and promotional efforts to prevent related damages.
The Online Advertising Fraud Reporting Center can be accessed by visiting the Korea Internet Advertising Foundation’s website (www.kiaf.kr) → Reporting Center → Online Advertising Fraud Reporting Center.
Currently, the KFTC is raising awareness about illegal practices in the online advertising agency sector through national billboard advertisements and cartoons in government publications, and is promoting key scam types and reporting procedures to ensure swift responses when cases occur.
Going forward, the TF will continue to strengthen enforcement against fraudulent behavior by online advertising agencies and expand education and outreach efforts for small business owners, with the goal of eradicating illegal practices that undermine fair competition in the advertising market.
Additionally, the KFTC plans to distribute stickers during the second quarter of 2025 that can be displayed at business locations to help small business owners remember key precautions when approached with online advertising contracts.
Meanwhile, to prevent falling victim to scams, small business owners should take special care before signing contracts by:
▲ Postponing contracts if impersonation of portals or public institutions is suspected,
▲ Refusing to provide payment information in advance,
▲ Confirming the final payment amount.