’More user protection needed’

By Kang Seung-woo

The head of the nation’s financial watchdog Monday criticized financial institutions for a lack of consumer protection.

“Financial companies have had a superior position over consumers and focused on boosting their business sizes, ignoring any sense of protecting their customers,” Financial Supervisory Service (FSS) Governor Kwon Hyouk-se said at a workshop in Seoul.

“Unlike foreign entities, domestic financial institutions have evolved to the current level through local operations dealing with households, small- and medium-sized enterprises and independent businesspeople, but they have turned a blind eye to them when in times of need.”

He added that they have stepped up efforts to share growth with consumers amid growing uncertainties in the eurozone.

According to Kwon, the fallout from the European sovereign debt crisis is expected to affect the Korean economy, so financial firms are required to help them deal with the crisis because the collapse of consumer confidence could have a negative influence on financial players.

His strong remarks came after local credit card issuers recently yielded to Hyundai Motor by lowering their card fees for the automotive goliath, while strongly resisting demands for commission cuts from small- and medium-sized restaurants and retailers.

The nation’s card issuers last week slashed credit card and check card fees to 1.7 percent and 1 percent, respectively.

The governor also asked consumers to change their roles in their financial investments.

“They need to boost their capacity to figure out the soundness and risk of financial firms or products and refrain from investing more money than they can afford.

Meanwhile, Kwon said that he will make the FSS, which has been hit hard by a variety of scandals, a more independent and balanced watchdog.

About 100 people from six consumer groups including the Consumers Union of Korea and financial institutions were present at the workshop.