Two major foreign banks operating in Korea ranked low in consumer protection, being given the lowest grade of “class 5” by the Financial Supervisory Service.
In the yearly assessment from the FSS on financial firms’ consumer protection, Citibank Korea and Standard Chartered Bank Korea ranked at the bottom, along with Nonghyup Bank, out of 15 commercial banks.
Their grade of class 5 means that they were “poor” in resolving customers’ complaints throughout the past year, FSS officials said Tuesday.
The regulatory officials said they took the fact that “Citibank Korea and SC Bank Korea were issued disciplinary warnings for being negligent in consumer protection” into consideration in their grading.
Consumers of Citibank had to suffer damages due to irregular terms in sales of the bank’s financial products, including loans.
SC Bank Korea had also been implicated in dubious loan agreements with small and mid-sized enterprises.
Nonghyup Bank was given the lowest grade for the second consecutive year. Its customers have sometimes faced inconveniences due to the lender’s network system glitches.
Shinhan topped the list among commercial banks in Seoul with class 2 (fine), followed by Industrial Bank of Korea, Woori Bank, and Hana Bank with class 3 (average). KB Kookmin Bank and Korea Exchange Bank posted class 4 (insufficient).
For the other financial sectors, Kiwoom Securities in the brokerage industry and AIG Korea (formerly Chartis or AHA Korea) in the nonlife insurance industry were assessed as the lowest with class 5 for the “10th consecutive” year.
From 2004 (for the 2003 assessment) to 2013 (for the 2012 assessment), the two financial firms failed to garner the second-lowest grade of “class 4 (or insufficient)” or better in the annual regulatory evaluations.
Kiwoom has invited frequent complaints from customers due to breakdowns or glitches in its online trading systems over the past few years.
Among petitions against AIG Korea from consumers filed with the FSS was the insurer’s irregular application of contract terms for insurance payments.
Hana SK Card and KB Kookmin Card ranked at the bottom in the credit card sector.
Out of 82 financial firms assessed by the regulator, seven firms such as Daegu Bank and KB Life Insurance were graded as class 1 (or excellent).
By Kim Yon-se (
kys@heraldcorp.com)
