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[Alpha Biz= Paul Lee] Mr. Lee suffered unauthorized charges amounting to approximately 6 million KRW after losing his credit card during a trip to Thailand. However, his credit card company compensated only 80% of the fraudulent amount. Mr. Lee filed a complaint demanding full compensation, but the Financial Supervisory Service (FSS) informed him that customers may bear partial responsibility depending on their degree of fault, making it difficult to accept his demand.



On May 19, the FSS released a consumer advisory titled “Key Dispute Cases on Financial Transactions Involving Vulnerable Groups Such as Young Adults,” emphasizing the importance of promptly reporting lost or stolen credit cards. The FSS explained that compensation for fraudulent charges depends on the customer’s responsibility as calculated by credit card companies under relevant laws and industry guidelines, including the Act on Specialized Credit Finance Business and the Model Regulations for Lost or Stolen Card Compensation established by the Credit Finance Association.



Compensation applies only to fraudulent use occurring within 60 days prior to the reporting date. In theft cases, such as pickpocketing, customers should report the incident to local authorities and obtain official documentation to reduce their liability.



Travel cards issued by electronic financial service providers are excluded from such compensation prior to the reporting date because they are classified as “prepaid electronic payment instruments” under the Electronic Financial Transactions Act and are not subject to credit finance laws.



Additionally, the FSS warned that some overseas merchants may process payments using a renewed credit card even after the old card’s expiration. Customers are advised to promptly dispute any unauthorized charges with their card issuer.

 

 

 

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