Wednesday, July 21, 2010

Interview: Dr. Kim Yeong-seen, President of Korea Consumer Agency

The Korea Consumer Agency is a government organization, that was established in July, 1987, based on the Consumer Protection Act. Its founding principle is to protect consumer rights and interests, to promote a rational consumption life and to contribute to the sound development of the nation's economy.
The agency is contributing to national economic development through providing consumer redress, consumer information and education, guaranteeing safety and rights, and protecting consumers economic interests. It provides distinctive and professional services on consumer affairs as a public institution specialized in effectively promoting the governments consumer protection policies.
An interview with Dr. Kim Yeong-seen, President of Korea Consumer Agency, on the role of the agency and plans for the future.

>>Major three areas in which Korea Consumer Agency is pouring efforts this year include 1) providing information on sales price of necessity goods, 2) establishing and spreading green consumption life, and 3) strengthening underprivileged and vulnerable consumers.
We are trying to help our consumers to enjoy more options in choice and promote price competition among distributors eventually to stabilize prices at home by providing price information of about 80 necessity goods including tofu, instant noodle, milk sold in diverse retailer format such as department store, discount store, supermarket, and traditional market.
In addition, we continue to survey consumer prices at home and abroad to identify and improve issues. In 2009, our Agency surveyed and compared local consumer price for the same items at three different store formats of department store, discount stores, and specialty stores in 11 cities of G7 member nations, major three Asian nations, and Korea.
To establish green consumption life, an index of advanced consumption life, we plan to 1) develop an index for green consumption capacity and a model for green home as an 粗nergy-saving environmentally-friendly home 2) develop and promoting educational programs for taking the initiative for green consumption, and 3) provide quality information to our consumers by conducting quality comparison test of green-labeled products.
In particular, our Organization is going to focus our capacity on strengthening consumer protection for the underprivileged and vulnerable class including the elderly, children, the challenged, and multi-cultural family. For example, we conducted a variety of tests and research on children play equipment, safety status of elderly consumers, improvement of consumption environment of multi-cultural family, and quality comparison for products for the disabled. Also, we set up a task force for Consumer PR for the Vulnerable in Feb to aggressively back up consumer protection for the underprivileged.
>>Korea Consumer Agency is a public organization to comprehensively promote diversified consumer policies of the Government as well as carry out consumer counseling and redress activities by the Framework Act on Consumer.
Consumer policy in Korea is largely divided by pre-emptive damage prevention and consumer redress after the fact. For prevention, we carry out activities of consumer information provision and consumer education. And, for consumer redress, we do consumer counseling and redress activities.
In particular, if consumer complaints or damages take place during one's use of a merchandise or service, a consumer counselor carries out counseling and providing information such as where to contact by guidelines for consumer dispute resolutionand other relevant law. And, if consumer redress is necessary, the consumer complaint is transferred to Consumer Redress Bureau by item so that consumer redress is taking place with agreed recommendation to both parties of a consumer and a business operator.
The person in charge of the consumer redress in question conducts fact-finding activities and helps compensation process through the agreed recommendation by the both parties of the consumer and the business. And the whole process shall be completed within 30 days after when the complaint is originally made.
If the business or the consumer does not accept the agreed recommendation determined by the person in charge in Consumer Redress Bureau, a request for settlement is made to Consumer Dispute Settlement Commission. The Commission shall make a settlement decision within 30 days from the day of the request. And, the settlement functions as judicial compromise.
>>Framework Act on Consumers, completely revised in 2007, reflects new policy paradigm shift to establishment of consumer sovereignty from consumer protection-oriented policy in the past. The Act itself changed its name to framework Act on Consumers from Consumer Protection Act while our organization changed its name to Korea Consumer Agency from the Korea Consumer Protection Board
Also, Consumer Association Lawsuit and Collective ADR (alternative dispute resolution) mechanism were introduced for consumer redress for massive number of victims suffering small amount of damages. The revised Act recognizes Consumer Association Lawsuit in which an organization fulfilling certain level of requirements seeks for ban or stop on violating activities of business.
Also, the revision grants an exception in which the CDSC at KCA carries out collective ADR process including monetary compensation. In addition, the revision also stipulates consumer Safety Center set up at KCA to give preferential consumer protection to the underprivileged in terms of safety including children and states consumer safety provisions such as collecting injury information and issuing consumer alert.
Meanwhile, the Act on the Consumer Protection in the Electronic Commerce Transactions, etc introduces online Escrow system and makes it obligatory for businesses using private information received such as shipping company to secure personal information. Also, a revision is on-going in order to strengthen responsibility of the telemarketing intermediaries.
>>With the advance of Information, Communications, and Technology and spread of cross-border transactions and economic cooperation among nations and regions such as the FTA, it is highly likely for number of cross-border complaints and damages to grow further. In reality, the number of cross-border consumer disputes filed to our Agency for the past five years amounted to 1,795 cases in total, indicating an increasing trend.
At KCA, we have the person in charge of cross-border consumer redress in place in Consumer Redress Bureau in order to carry out real consumer redress activities in cross-border transaction more efficiently. In addition, we are actively engaged in activities to prevent cross-border consumer damages through analysis and PR of the current status of damages such as top complaint location, top consumer location, top dispute cause, and contents of dispute. Also, the KCA is seeking ways to resolve the disputes by strengthening multilateral cooperation with International Organizations such as OECD and ICPEN (International Consumer Protection & Enforcement Network).
>>In order to resolve consumer issues, consumers should play their part. But, more fundamentally, role of the business should be stressed. Companies should embrace paradigm shift in consumer protection, since management toward consumer protection and customer satisfaction is not a choice but a must with top priority for the business to survive.
Business can upgrade product quality by listening to consumer voice and understanding consumer needs through consumer dispute settlement and redress process. This will lead companies to come up with a new idea for product development and achieve product innovation.
Enhancing consumer confidence by resolving consumer issues is core to strengthened corporate competitiveness. Not only companies but also nations should recognize that preparing measures to resolve simultaneously-occurring cross-border consumer complaints triggered by the rising number of cross-border transactions is the best strategy to secure competitive edge for long-term. Only companies that can satisfy difficult consumers can survive in the highly competitive market.