- Corrective orders, business suspension, fines imposed, and corporate entity & CEO referred to prosecution -
The Korea Fair Trade Commission (Chairman Han Ki-jeong, hereinafter “KFTC”) has decided to impose corrective orders (including a public announcement order), a business suspension (4.5 months), and a fine (7.5 million KRW) on Korea Silver Exchange Co., Ltd. for the following violations:
- Failure to properly refund consumers despite their cancellation requests after non-delivery of goods.
- Providing false or exaggerated information to lure consumers.
- Obstructing consumers' right to cancel purchases in violation of the law.
- Failing to comply with corrective recommendations issued by the Byeollae-dong Office in Namyangju City, despite initially accepting them.
Furthermore, the KFTC has decided to refer both the corporation and its CEO to the prosecution for legal action.
Details of the Violations
- Korea Silver Exchange Co., Ltd. operates an online shopping mall, Korea Silver Exchange (www.koreasilverex.co.kr). Between January 2022 and August 2024, some consumers placed orders for precious metals and other goods that were never delivered. Even after requesting order cancellations, these consumers either did not receive refunds or received them after more than three business days, violating e-commerce regulations.
- In December 2023, the Korea Consumer Agency issued a consumer damage warning against Korea Silver Exchange Co., Ltd.. In response, the company falsely claimed on its website through an official announcement that “refunds are being processed normally”, misleading consumers regarding the actual status of refunds.
- From November 2023 to March 2024, the company misrepresented its refund policy on its product pages, stating that order cancellations were not allowed, despite consumer rights ensuring such cancellations under the law.
- From June 2023 to May 2024, Korea Silver Exchange Co., Ltd. received corrective recommendations from the Byeollae-dong Office in Namyangju City, instructing the company to cease violations, prevent further consumer harm, and implement corrective measures regarding unpaid refunds. Although the company accepted these recommendations, it later failed to implement them. The company’s CEO, Mr. Kim ○○, who was responsible for enforcing these corrective measures, also failed to take any action.
Significance of the Decision
This decision is significant as it strictly penalizes businesses that fail to refund consumers despite valid cancellation requests or fail to comply with agreed-upon corrective measures. The enforcement action is expected to prevent similar violations in the future.
Going forward, the KFTC will continue to monitor e-commerce violations that harm consumer rights and will work closely with local governments and related agencies to strictly respond to non-compliance with corrective orders.