Banks face class-action suit over alleged rate fixing

Published : Feb 16, 2016 - 10:57 Updated : Feb 16, 2016 - 10:57

A local consumer advocacy group said Tuesday it will file a class-action lawsuit against local commercial banks for their suspected fixing of certificate of deposit (CD) rates.

The Fair Trade Commission (FTC) found, after a years-long probe, "enough pieces of evidence" indicating the suspected collusion to fix the CD rates by six major banks including Shinhan Bank and Woori Bank.

Fair Trade Commission (Yonhap)

The lenders failed to freeze the CD rates for some time beginning in 2012 even after the central bank cut the policy rate, raising suspicions that they colluded to rig the rates to receive more for mortgage loans, as CD rates are tied to the loans. The FTC launched the investigation in July of the same year.

After reviewing written opinions by the banks next month, the antitrust watchdog said it plans to determine what punitive measures it will take.

"More than 5 million people have suffered losses worth 4.1 trillion won due to the rate fixing," said Cho Nam-hee, the chief of the Financial Consumer Agency (FICA). "We will recruit complaints to win back their ill-gotten profits."

The FICA filed similar suits twice in 2012 representing 1,000 consumers, but the cases were put on hold until the FTC presents its probe results.

Cases filed by other civic groups on the CD rates were all dismissed, with the central court citing a lack of evidence.

Banks, however, have denied any wrongdoing, claiming that their decision on the CD rates was "in accordance with the government's guidelines." (Yonhap)