Consumer Policy and Consumer Rights in South Korea

free essaySouth Korea is a sovereign state in East Asia. Since its foundation, South Korea has come a long way of development. In the 1960s, the country was one of the poorest in the region, but now, the Republic of Korea is a developed industrial and highly urbanized state, one of the largest trading countries in the world market.

The Roots of Consumer Protection in South Korea

According to the report presented at the 43rd Annual Conference of the American Council On Consumer Interests, consumer protection in South Korea began in the middle 1970s (Joo 115). The South Korean government started to pay particular attention to the problem of consumer rights in the mid-1970s when the complicated situation on the world oil market caused a rapid rise in consumer prices. In the 1980s, the government passed the Korea Consumer Protection Act (KCPA) that provided the foundation for consumer protection in South Korea (Joo 115).

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The KCPA stipulates seven consumer rights. They are following: the right to safety, the right to be informed; the right to choose; the right to be heard; the right to redress or remedy; the right to be educated, and finally – the right to organize private consumer organizations. It also designates the roles of national and local government agencies in the sphere of consumer protection.
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Consumer Protection on Practice

The Korean Consumer Agency was founded in 1987 as a governmental organization. The Consumer Protection Act acts as the basis of its activities. It works in five main areas, and its practical and research parts are almost equally divided and addressed. In addition to solving cases directly related to the safety and damages caused to consumers, the Korean Consumer Agency’s experts study the policies and systems related to consumer rights and investigate consumer-related matters, constantly gathering information about consumer protection and analyzing it. Moreover, the Agency’s employees continuously oversee information and education programs aimed at raising the public awareness on consumer protection.

There are five categories of consumer protection in South Korea (Joo 115). The first one is a fair transaction. The legislation in this area is quite large: The Antitrust Act, according to which the monopolizing is illegal; Price Stabilization Act; Act on Installment Transactions (which does not apply to property); Acts on Door-to-door Sales, as well as the Service Contract Act. Moreover, the government has the right to make changes and regulate public affairs and prices by setting an upper limit or revealing information about prices.

The second category of consumer protection initiatives is the consumer protection on services (the acts on Insurance, Travel, and Health Insurance that exist in South Korea). Mostly, this category is associated with the fairness of transactions. Moreover, consumers can rely on the support of Committee of Medical Care Inspection Arbitration, as well as the Medical Science Mutual Aid Association to protect their rights. However, of great importance, in this case, is the presence (or absence) of an insurance or travel contract.

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The third category is consumer safety. South Korea has issued the Food Safety Act and the Consumer Product Safety Act, which regulate sanitary conditions, quality, distribution period of meals, imported food, and drugs. However, experts say that these laws are aimed more at supporting the industry interests rather than the safety of consumers. It should be also noted that the electric Appliance Safety Act exists separately.

The fourth and fifth categories are consumer credit protection and consumer redress after sale. Issues arising from the use of credit cards are regulated by The Act on Installment Credit, Act on Credit Cards, Banking Act, Act on Pawn shops and The Act on Interest Limitation. In general, these instruments are similar to those in the US, with small differences, however. For example, if the card is stolen, the owner must submit a written statement, and the company that issued the card should pay for the 15 days of misuse.

Situations of redress in sales in South Korea can be solved in several ways: by reciprocal actions, referring to the private consumer protection organizations or directly through the South Korea Consumer Protection Agency. The mechanism, in this case, is specific: the agency assumes the role of a mediator between the two participants of the discussion. If a problem that arose between the consumer and the service (the product) provider is not settled through negotiations within 20 days, the consumer may address the Special Committee, which operates under the agency’s supervision. A common practice in the country is to pursue a company with a claim on a poor quality of the goods.

South Korean Consumer Movement

In The Watchdogs and Whistleblowers: A Reference Guide to Consumer Activism, Stephen Brobeck and Robert N. Mayer state:

South Korean consumer activists are becoming more involved in international consumer activities. Five Korean consumer groups are registered members of Consumers International (CI), including Korean National Council of Consumer Organizations. Korean consumer groups actively participate in CI-hosted events such as seminars, workshops, and conferences. Furthermore, to find solutions to consumer issues emerging globally, South Korean consumer groups cooperate with CI and other international consumer organizations.”(Brobeck and Mayer425)

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It is important to note that the most of the South Korean organizations involved in the protection of consumers’ rights do not compete but firmly cooperate. In the middle 1970s, when The Korean National Council of Consumer Organizations was created, it included four organizations, which later received the status of the founding members. Eventually, this trend increased. Nowadays, 40 years later, KNCCO is not a separately functioning organ, but a Federation, which coordinates the activities of ten participating organizations and combines well-developed network of 182 regional consumer protection organizations.

Nevertheless, in the recent years, the consumerist movement in South Korea has changed significantly, and observers mark at least three main points in this list of changes. In the last few years, the consumer movement gas changed tremendously in several important ways. First, there has been a transition in leadership. Traditionally, the Korean consumer movement was directed by the leaders of women’s associations. As these founders of the consumer movement have begun to step aside, new leadership is emerging, though it is still predominantly female. Second, whereas consumer groups in South Korea tended to embrace a large number of consumer issues, the new groups are more focused on specific products or services such as telecommunications, insurance, genetically modified foods, and medical services. These new single-issue groups tend to be more professional in their methods and bring a high level of expertise to issues, which has increased their visibility and influence. None of these single-issue groups has joined the National Council of Consumer Organizations to date. The future of the consumer movement will depend on synergies that develop between single-issue groups and more established groups (Brobeck and Mayer 425).

The third point is the most important because it determines the future direction of the consumer organizations as well as their global objectives.

A final challenge facing the consumer movement in Korea is a lack of public support. The public has yet to embrace the goals and ideals of consumerism, undermining the movement’s influence. A potential goal of consumerists could be to raise the visibility of the organizations with the general public. This issue could help to solve issues related to human resources and money, and it could make consumer activists the primary voice of the consumers rather than government bodies and elected officials. At least, it could offset the overwhelming power of business in the Korean economy.