Compensation Criteria for Consumers’ Damages
November 2004
Korea Consumer Protection Board
Consumer Protection Act & Enforcement Decree of the Consumer Protection Act
Consumer Protection Act
Article 12 (Remedy for Consumers’ Damages)
① The central and local governments shall take necessary measures so as to promptly and fairly handle complaints and damages.
② The government may formulate the Compensation Criteria for Consumers’ Damages by Product Item (hereinafter referred to as the “Competition Criteria”) in conformity with the general compensation criteria for consumers’ damages as determined by the Presidential Decree, for the purpose of smoothly settling B2C disputes.
③ The Compensation Criteria as referred to in Section 2 shall be the norm for remedy in B2C disputes, unless otherwise stated.
Enforcement Decree of the Consumer Protection Act
Article 10 (General Compensation Criteria for Consumers’ Damages)
The general compensation criteria for consumers’ damages (hereinafter referred to as the “General Competition Criteria”) as prescribed in Article 12.Section 2 of the Consumer Protection Act shall be as follows.
1. In case of consumer damages involving defective goods and services or default, businesses shall repair, exchange, refund or compensate, and cancel, terminate or implement contracts according to the criteria falling under each of the following items:
a. Businesses shall bear the expense required for repairs during the warranty period. Provided, in case of mishaps or damages by consumer’s fault and unexpected circumstances as natural disasters, or in case goods are deformed or damaged from repairs by individuals other than the manufacturer or repair shops designated by the manufacturer; it shall not apply;
b. Repairs shall be completed in time but in case of delays due to unexpected circumstances, consumers shall be notified. In case the repaired product is not delivered to the consumer for over a month from the date the repair request was made, exchange shall be made for the same product or similar type of product when the exchange for the same one is impossible, if within the warranty period. In case of exchanges provided after the lapse of the warranty period, the business shall repay the 0.1 percent added depreciation amount based on the purchasing price;
c. In case of recurring similar functional or performance breakdowns after receiving repairs while using the product within two months from the date of repair, the following repairs shall be provided for free but if repairs are impossible, the previous cost of repair shall be returned to the consumer;
d. Exchanges shall be made with the same product but if exchanges for the same one are impossible, it shall be exchanged with a similar product type. Provided, that in case exchanges cannot be made with the same product and the consumer does not wish to exchange it with a similar one, the repair cost shall be returned to the consumer;
e. In case of exchanging goods purchased at a discount, exchanges shall be made for a similar product type, irrespective of difference in price between the original and discount price. If exchanges for a similar product type are impossible, exchanges shall be made for the same product: provided, that in case exchanges cannot be made with the same product and the consumer does not wish to exchange it with a similar one, the repair cost shall be returned to the consumer;
f. The amount of refund shall be based on the price of goods and services indicated on receipts. Provided, that in case of disputes over the price indicated on the receipt, the consumer who seeks refund in the amount different from that on the receipt must prove that the claimed amount was actually paid by oneself. For the non-possession of receipts that proves the consumer had actually paid the claimed amount, the amount of refund shall be based on the standard price applied in the area where the dispute occurred.
2. In case of consumer damages involving defective goods or services, the Compensation Criteria shall be the same as indicated in Section 1. In case of contract cancellations or terminations due to the consumer’s fault and the business receives the defective product and/or if product returns are impossible, the consumer shall return a similar product type or pay the market price of the similar product type where the dispute has occurred.
3. The business, upon selling goods, shall provide the Seal of Quality that indicate the warranty period, the parts replenishment period and compensation methods such as repairs, exchanges and refunds, or indicate the contents thereof on the goods. Provided, that in case of circumstances being suitable to provide the Seal of Quality or to indicate the compensation criteria, the business may only indicate that compensation shall be provided for any damages in accordance with the Compensation Criteria under the Act
4. The warranty period and the parts replenishment period shall be based on each of the following items.
a. The warranty period and the parts replenishment period shall be the period indicated in the Seal of Quality by the business: provided, that in case the warranty period and the parts replenishment period set are shorter than the period indicated in the Compensation Criteria under Article 12.Section 2 of the Act, it shall be the period set thereof;
b. In case the business fails to indicate the warranty period and the parts replenishment period, it shall be set in accordance with the Compensation Criteria. Provided, that in case of product items which the warranty period and the parts replenishment period is not prescribed in the Compensation Criteria, it shall be set in accordance with the warranty period and the parts replenishment period of similar type of product items. If it cannot be dealt with thereof, the warranty period shall be one year and the parts replenishment period shall be the period of durable years, which reckons from the date the production of the goods in question discontinues;
c. The warranty period for used goods shall be in accordance with the Compensation Criteria;
d. The warranty period shall reckon from the purchase date of goods and services by consumers. Provided, that in case the date of agreement and delivery date are different, it shall be dealt with according to the delivery date and the warranty period of the exchanged goods shall reckon from the date of exchange;
e. In case the date of sales is not indicated in the Seal of Quality, in case the Seal of Quality or the receipt is not received or lost, or the confirmation of the purchase date is difficult, the warranty period shall reckon after the lapse of three months from the date the goods in question are manufactured or cleared of customs. Provided, that in case the manufacturing date or customs clearance date is not indicated on the goods or package, the business shall uphold the responsibility of proving the manufacturing date.
5. In case of consumer damages related to goods and services, compensation shall be provided where the goods and services are sold and rendered: provided, that in case of portable and/or transportable goods, it shall be provided in the place of business.
6. Transportation, product test and inspection costs incurred in the process of handling consumer damages resulting from the business’ fault shall be born by the business.
Article 12 (Application of Compensation Criteria)
1. The Compensation Criteria shall be applied only in cases where parties in dispute do not express otherwise and consumers only seek to be compensated for the actual damages.
2. If the criteria under other laws and statutes are more advantageous to consumers than the Compensation Criteria, the former shall take precedence over the latter.
3. If the criteria on the product in question are not prescribed in the Compensation Criteria, the criteria for similar product types indicated in the Compensation Criteria shall be applied.
4. In case the Compensation Criteria includes more than two compensation methods for the same damage, the method chosen by consumers shall be applied.
Table of Contents
Compensation Criteria for Consumers’ Damages 9
Appendix I. Product Items in Question 11
Appendix II. Compensation Criteria by Product Item 23
1. Matchmaking Service 23
2. Security Service 24
3. National Examination Preparation Center 26
4. Public Service 27
5. Industrial Goods 29
6. Performing Industry 59
7. Agriculture, Fishery & Livestock Products 60
8. Cultural Goods & Others 62
9. Beauty Care 68
10. Real Estate Brokerage 69
11. Photography & Photo Developing Industry 70
12. Maternity Care Service 71
13. Merchandise Coupons & Gift Certificates 72
14. Laundry & Dry Cleaning Service 74
15. Accommodation Service 83
16. Food & Beverage 84
17. Credit Card Industry 85
18. Pet Selling Industry 87
19. Overseas Language Training Program Agency 88
20. Travel Industry 89
21. Wedding Ceremony Service 96
22. Transportation Service 97
23. Overseas Study Program Agency 111
24. Pharmaceutical & Chemical Products 112
25. Mobile Telecommunication Service 117
26. Trucking & Shipping Service 118
27. Internet Shopping Industry 120
28. Online Contents Service 121
29. Vehicle Towing Service 124
30. Vehicle Rental Service 124
31. Vehicle Repair Service 126
32. Electronic Cash Service 127
33. Water Purifier Rental Service 128
34. Housing Construction 130
35. Used Home Appliance Sales 131
36. Used Car Sales 132
37. Windows & Doors Construction 133
38. Sports, Leisure & Discount Membership Service 134
39. High-Speed Internet Service 135
40. Courier & Delivery Service 137
41. Public Academic Institutes & Lifelong Learning Centers 137
42. Resort & Condominium Service 139
Appendix III. Warranty Period & Parts Replenishment Period by Product Item 140
Compensation Criteria for Consumers’ Damages
Enactment 31 December 1985
Revision 14 July 1989
25 March 1993
16 July 1994
1 April 1996
13 March 1999
19 July 1999
4 December 2000
4 December 2001
31 December 2002
1 August 2003
1 November 2004
Article 1 (Purpose)
The purpose of this Compensation Criteria for Consumers’ Damages (hereinafter referred to as the “Compensation Criteria”) is to establish the compensation criteria for consumer damages by product item according to the general compensation criteria for consumers’ damages under the Enforcement Decree of the Act (Article 10), so as to smoothly settle B2C disputes in accordance with Article 12.Section 2 of the Act.
Article 2 (Claim for Compensation)
If the consumer and the business (hereinafter referred to as the “party”) fail to reach a compensation agreement, the party can seek redress to the central or local administrative agency, or the Korea Consumer Protection Board.
Article 3 (Product Item & Compensation Criteria)
The product items in question and the compensation criteria by product item are each described as follows (Appendix I, Appendix II and Appendix III).
This Compensation Criteria shall enter into force on August 1, 1989. (Proviso Omitted)
This Compensation Criteria shall enter into force after the date of its promulgation. (Proviso Omitted)
This Compensation Criteria shall enter into force on August 1, 1994. (Proviso Omitted)
This Compensation Criteria shall enter into force on April 1, 1996. (Proviso Omitted)
This Compensation Criteria shall enter into force after the date of its promulgation. (Proviso Omitted)
This Compensation Criteria shall enter into force after the date of its promulgation. (Proviso Omitted)
This Compensation Criteria shall enter into force after the date of its promulgation. (Proviso Omitted)
This Compensation Criteria shall enter into force after the date of its promulgation. (Proviso Omitted)
This Compensation Criteria shall enter into force on January 1, 2003. (Proviso Omitted)
This Compensation Criteria shall enter into force on August 1, 2003. (Proviso Omitted)
This Compensation Criteria shall enter into force on November 1, 2004. (Proviso Omitted)
<Appendix I>
Product Items in Question
Classification / Product Description / Product Items1 / Matchmaking Service / Marriage Information
2 / Security Service / Security Services
3 / National Examination Preparation Center / National Examination Preparation Centers
4 / Public Service / Electricity Services
Telephone Services
5 / Industrial Goods / Home Appliances / TV, VTR, Refrigerator, Washing Machine, Fan, Air Conditioner, Radio, Recorder, Record Player, Microwave, Rice Pressure Cooker, Electric Iron, Electric Mattress Pad, Electric Blanket, Vacuum Cleaner, Electric Furnace, Electric Frying Pan, Humidifier, Head Phone, Electric Razor, Dish Washer & Dryer, Hair Dryer, Electric Oven, Electric Healing Medicine Maker, Electric Pot, Toaster, Curling Iron, Electric Mixer, Coal Gas Ejector, Electric Pump, Juice Extractor, Mini Pressure Regulator, Electric Dehydrator, Fluorescent Lighting, Electric Stand, Electric Door Hanger, Door Phone, Water Thermos, Electric Heater, Heating Cabinet, Ventilator, Air Purifier, Current Sensor, Water Sprinkler, Water Cooler, Ice Machine, Anti-Theft Alarm System, Ice Shaver, Chime/Bell Ringer, Game Player, Gas Furnace, Antennae, Water Purifier, Water Heater, Bidet, Soft Water Purifier, DVD Player, MP3 Player, Voice-Pen, Hand Blender, Electric Fryer, Food Steamer, Halo Plate, etc.
Office Supplies / Copy Machine, Typewriter, Facsimile, Cash Register, PC & Computer Parts, Word Processor, Calculator, Cabinet, Filing Cabinet, Bookbinding Equipment, Mimeograph, CD-ROM & Disks, Beam Project, PDA, etc.
Electronic Device / Wire/Wireless Phone, Interphone, Car Phone, Cellular Phone, Pager (Beeper), Video Phone, Long-Distance Automatic Dialing Unit, Telephone Adapter, Fixed Switchboard & Auxiliary Device, Multi-Data System (less than 2.048Mbps, except for those used by telecommunication operators), Video Fax, TeleTax, Telewriter, Credit Card Authorization Terminal, Signal Converter (modem, data service device, pad), Circuit Terminal Device (subscriber protector, access plate, termination plate, telephone connector, wire broadcasting transmission system, other telecommunication equipment), etc.
Light Bulbs / Fluorescent Light Bulbs & Incandescent Lamps
Furniture / Closet (drawers, decoration furniture, cupboard, book shelf, etc.), dining table, bed, sofa, cabinet, desk, stationery chest, makeup table, etc.
Automobile / Passenger & Commercial Vehicles
Cycle / Bicycles & Motorcycles
Boiler / Oil/Electric/Coal/Gas/Solar Boiler
Watches / Wrist Watch, Wall Clock & Table Clock
Sewing Machine / Household & Industrial Sewing Machine
Optical Goods / Camera, Video Camera, Camera Parts, Telescope, Microscope, etc.
Children’s Goods / Baby Carriage, Tricycle, Baby Walker, Toys & Dolls, Water Toys, Goggles, Children’s Swing, Roller Skates, Assembling Toy, Textbooks & Materials, etc.