The Anti-Corruption and Civil Rights Commission (ACRC) has recommended that the Fair Trade Commission and the Financial Supervisory Service devise measures to protect user rights concerning prepaid electronic payment methods like transportation cards and pay/money systems. It has been highlighted that the notification of the expiration of these prepaid funds needs to be strengthened.
According to the ACRC, from 2021 to 2024, a total of 211.6 billion KRW in expired prepaid electronic payment amounts went to the businesses instead of the users, averaging 52.9 billion KRW annually. The ACRC has recommended implementing mandatory advance notification of expiry dates and strengthening the guidance on key information as part of the “Prepaid Electronic Payment User Rights Protection Plan.”
As of the end of December 2024, the daily usage of prepaid electronic payment methods exceeded 33 million transactions. However, the current system applies a five-year statute of limitations, which many users are unaware of, leading to unused balances reverting to the businesses. Moreover, businesses currently have no obligation to inform users of the completion of this statute of limitations, nor is there a mandate to indicate it in terms and conditions or product descriptions.
The ACRC has recommended that starting one year before the statute of limitations is completed, businesses should notify users at least three times via email about the expiry date and encourage usage. They also stated that the standard terms should mandate displaying the statute of limitations, and users should be provided with a summary consent form to better understand it. For physical cards, it is necessary to print the statute of limitations notice in bold and large type.
Additionally, the ACRC suggests that businesses should be allowed to collect personal information such as email addresses or phone numbers, with users’ consent, to facilitate notices regarding the statute of limitations.
The lack of regulations for handling unused balances after the statute of limitations has expired has been pointed out as an issue, and the ACRC proposed that these funds should be regularly identified, disclosed, and used for public projects.
Song Young-hee, head of the Economic System Improvement Division at ACRC, expressed expectations that these improvements would significantly enhance user rights by strengthening advance notices regarding the statute of limitations related to prepaid electronic payments.