“They Said a Lifetime Condo Membership Had Been Won”...“Penalty Bomb” Right After a 3 Million Won Payment [Consumer Basics]

[Financial News]#. “Congratulations. You’ve won a condo membership in our event.”Last year, A, an office worker, received an unexpected phone call. The caller said A had won a condo membership event. When A showed interest, a salesperson came by in person a short time later and explained, “For a facility management fee of only about 3 million won, you can use a high-end condo membership for life.” Although it was a substantial amount, A thought it would mean access to upscale facilities on every vacation, so A signed the contract and paid by credit card in installments.
Right after the salesperson left, A searched online, just in case, and found numerous cases of people falling victim to similar schemes that promoted memberships in the same way. A immediately called the salesperson to say the contract should be canceled. Barely an hour or so had passed since the contract was signed.
But the salesperson strongly urged A to keep the contract, saying, “If you cancel now, the penalty will be hefty,” and that “you’re better off continuing to use the membership.” Effectively denied the chance to cancel, A applied to the Korea Consumer Agency (KCA) for relief.■ Right to withdraw from door-to-door sales contracts within 14 daysAccording to the KCA on the 15th, “similar condo memberships” are accommodation-use passes sold by businesses that are not tourism accommodation providers registered under the Tourism Promotion Act. The business provides services such as booking arrangements, allowing consumers to use affiliated hotels or guesthouses.
A’s contract, signed after a salesperson came to visit in person, is covered by the Act on Door-to-Door Sales, etc. Consumers may withdraw from a contract within 14 days of receiving it, and businesses cannot demand a penalty or damages on that basis.
In addition, if a purchase of at least 200,000 won is paid for in installments over three months or longer, consumers may withdraw from the purchase within seven days under the Act on Installment Transactions. If a contract is canceled, rescinded or terminated, consumers may also exercise the right to withhold the remaining installment payments from the card company.
According to the KCA, consumers’ right to withdraw from a contract is a mandatory provision for consumer protection, and any contract term that is less favorable to the consumer than the law’s provisions should be considered invalid.
When A asked the credit card company to exercise the right to withhold installment payments, the business canceled the payment and terminated the contract.■ Important verbal explanations must be written into the contractThe KCA urged consumers to carefully check important details when signing a door-to-door sales contract, including the contract period, whether the deposit will be refunded and the conditions for termination. A KCA representative said, “Consumers should insist that important points explained verbally by sales representatives be written into the contract,” adding, “Also, when paying 200,000 won or more, paying by credit card in installments may help resolve disputes by making consumers eligible for protection under the Act on Installment Transactions.”
[email protected] Kim Hyun-ji Reporter