Do not go gentle into that good night, old age should burn and rave at close of day; Rage, rage against the dying of the light, though wise men at their end know dark is right, because their words had forked no lightning they, do not go gentle into that good night.
FSS looks into Toss for exaggerated advertisement
By Jhoo Dong-chan
The Financial Supervisory Service said Monday it was investigating Viva Republica, operator of online money transfer app Toss, for allegedly issuing misleading statements regarding its peer-to-peer (P2P) real estate investment product.
The firm claimed in the Toss app that its P2P real estate product was risk-free for customers and they need not be afraid of losing their investments.
With its partnership with domestic P2P financial firms such as Tera Funding, Viva Republica has offered real estate investment brokerage services via its Toss app. It wires money to these P2P financial firms on behalf of customers and receives fees from them when the product matures.
In the app, it uses some controversial phrases such as “it has never suffered a loss while it has received a total of 582.1 billion won worth of investments from customers.”
Contrary to its advertisement, domestic investments via these P2P financial firms have often suffered a loss. According to the Korea P2P Finance Association, the average delinquency rate of principal past due over 30 days at the nation's 44 P2P financial firms stood at 7.3 percent as of the end of May.
The delinquency rates of some P2P firms were higher than 93 percent, the data added.
There have been some internet community posts complaining about the Toss app's past due principal payment. Some customers even claimed their investment via the app has been written off as uncollectable.
These P2P real estate investment products are also not subject to the Depositor Protection Act.
“It says it has never sustained a loss in the app' advertisement. This should be verified,” said an FSS official.
“Under the FSS administrative guidelines, the agency is looking into whether it has mislead customers regarding its P2P real estate investment products.”
In a bid to diversify its revenue portfolio, Viva Republica is also seeking a soft landing in its advance into the nation's insurance market.
It established general agencies last year, and said it has utilized its telemarketing channel to attract more customers.
The firm also led a consortium to establish a new internet-only bank, but the proposal was rejected by financial authorities because it did not specify how it would run the bank without a single strategic partner, and raise capital given its negative cash flow.