Toss app operator faces lawsuit for fraudulent ads

A pedestrian passes by Viva Republica's head office in Seoul in this 2019 file photo. Yonhap

By Park Jae-hyuk

Hundreds of users of the Toss mobile money transfer app are preparing for a lawsuit against its operator Viva Republica, alleging the fintech firm advertised fraudulent investment products that caused them huge losses.

Most of them invested in real estate through the Terafunding peer-to-peer (P2P) lending platform, after seeing its ads on Toss. The P2P platform provider has deferred redemption of funds because the borrowers are in default.

The investors blamed their losses on both Terafunding and Viva Republica, saying the ads on Toss downplayed the risk of losing their principal. They opened a website recently to share information and preparing the lawsuits against the two companies.

After filing a petition with Cheong Wa Dae and the Financial Supervisory Service (FSS), they are also calling for the financial authorities to deprive Viva Republica of its licenses to operate an internet-only bank and a securities firm, unless the company fulfills its responsibilities.

"The company has ostensibly emphasized innovation and social responsibility, but it is actually trying to avoid all responsibility," one of the investors said.

Viva Republica attributed their losses to the P2P platform provider, refuting the allegations against it, saying users misunderstood its ads.

"We just explained there had been no loss of principal so far, and we revised our ads in late 2019," its spokesman said. "Investors are informed three times of the possible loss of principal and they need to accept the agreement to make investments."

The company also said it ended its partnership with Terafunding, and is considering doing the same with other P2P platform providers.

However, the investors regarded these measures as part of its efforts to avoid responsibility.

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