I. Legal basis

Before delving into the details, readers should be familiar with the main statutes governing consumer protection in Korea:

• Framework Act on Consumers (“FAOC”)
• Act on the Regulation of Terms and Conditions (“TCA”)
• Act on Consumer Protection in Electronic Commerce
• Act on Fair Labeling and Advertising (“AFLA”)
• Product Liability Act (“PLA”) 
• In addition, there are sector-specific laws, such as the Act on Distance Sales, the Installment Transactions Act, the Motor Vehicle Management Act, the Product Safety Act, and laws on Telecommunications and Data Protection, among others.
• The main regulatory authorities include the Korea Fair Trade Commission (KFTC), the Korea Consumer Agency, and central and local government bodies responsible for enforcement.

II. Who is a “consumer”, who is protected, and who is regulated

First, it is necessary to clarify the parties who are protected and the responsibilities of the involved entities:

• A consumer, under the FAOC, is defined as a person who uses (or benefits from) goods, services, or facilities provided by a business for daily life or for production activities, in accordance with the provisions of the relevant Decree.
• Business means any entity that manufactures, imports, sells goods, or provides services.
• The Consumer Protection Act not only governs the relationship between individual consumers and businesses, but in many cases, government agencies and local authorities are also obliged to comply (for example, in public procurement or when issuing regulations affecting consumer rights).
• Exceptions: individuals or entities purchasing goods or services not for personal consumption—such as buying raw materials for production or wholesale purchases for business purposes—are generally not entitled to protection under the Consumer Protection Act.

III. Rights to quality, functionality, and transparent information

One of the most important rights is the right to receive goods and services that meet the promised quality, and to be provided with sufficient information to make informed choices.

• Under the FAOC, the government has the responsibility to establish labeling standards (product name, specifications, expiration date, usage instructions, etc.) to prevent consumers from being misled by packaging or inaccurate labels.
• If a business that manufactures, imports, or sells goods violates labeling standards or engages in false advertising, the authorities have the power to order the removal, recall, or even destruction of the violating products (pursuant to Articles 48–50 of the FAOC).
• In addition, under the TCA, if a contract between a consumer and a business contains ‘unreasonably disadvantageous’ terms—such as the exclusion of significant liabilities that the consumer could not foresee, or restrictions on fundamental consumer rights—those terms are null and void.
• Illustrative example: A wedding service company included a clause stating that if a customer cancels, only 85% of the fee would be refunded due to ‘incurred costs.’ However, the consumer agency determined this clause to be unreasonably disadvantageous, so the customer is entitled to a full 100% refund and may also claim additional compensation.

IV. Rights to product safety and liability for harmful products

A very important aspect: if a product or service poses potential hazards (to health, life, or property), consumers must be afforded special protection.

• When a business discovers that a product it provides has a serious defect that may cause injury, illness, or property damage, the business is obligated to report the defect within five days of becoming aware of it.
• At the same time, the business must voluntarily recall the product or provide replacement or repair if the defect could cause harm. If it fails to do so, the authorities may order the recall or removal of the product.
• If a business fails to comply with a recall order or continues to sell a defective product, it may be subject to imprisonment (up to 3 years) or a fine (up to 50 million KRW) under the FAOC.
• In addition, under the Product Liability Act (PLA), a manufacturing (or processing) business may be held strictly liable if a product it provides is defective and causes damage to consumers’ property. This means that consumers do not need to prove fault, only that the product was defective and the damage occurred.
• There is an exception: if, at the time, science could not detect the defect despite the business having complied with prevailing technical standards, the business may be exempt from liability under the PLA.
• Illustrative example: A company manufactured electric stoves with components that did not match the certified specifications, subsequently creating a fire and explosion hazard. They were sentenced to six months’ imprisonment, suspended, for violating the Product Safety Act.

V. Restrictions on misconduct: false advertising, unfair terms, and electronic transactions

Not only are products regulated; business practices (advertising, contracts, online transactions) are also governed by law to prevent consumer deception.

• Under the Act on Labeling and Advertising (AFLA), businesses are prohibited from making false or misleading advertisements, exaggerating claims, or making unfair comparisons with other products. Violations may result in orders to stop advertising, issue corrective statements, or fines—up to 2% of the revenue from the violation, or imprisonment (up to 2 years), or fines up to 150 million KRW.
• “Under the TCA, if a contract includes terms that excessively favor the business (such as excluding fundamental rights, imposing heavy liabilities on the consumer, restricting the right to sue, or transferring the contract without notice), such terms, if deemed ‘unreasonably disadvantageous,’ are null and void.”
• For e-commerce, the Act on the Protection of Consumers in Electronic Commerce contains specific provisions:

 - Businesses must retain records of transactions, electronic contracts, and relevant information for a sufficient period to allow retrieval when necessary.
  -Consumers have the right to cancel a contract within a specified period (right of withdrawal).

   - Businesses are prohibited from using consumers’ personal information unlawfully and from exploiting resource constraints to deceive buyers (e.g., complicating the complaint process, delaying responses, etc.).

   -In case of violations, the KFTC has the authority to order corrective actions, suspend operations, or apply other administrative measures (fines, business suspension, etc.).

• Example: An online platform listed a cancellation period shorter than permitted by law or deliberately complicated the cancellation process. It was fined a total of 7.5 million KRW by the KFTC for violating the e-commerce consumer protection law.

VI. Enforcement mechanisms, complaint resolution, and litigation

Good regulations are important, but without enforcement, consumer rights can be left unprotected. The following illustrates how Korean consumers are actually supported in the event of a dispute:

• Complaint – Mediation – Consumer agency: Consumers may file complaints with the Korea Consumer Agency. This agency can facilitate dispute resolution or refer the case to the competent authorities. There is also a Consumer Dispute Mediation Committee, where both the consumer and the business can agree on the mediation outcome, or, if not, proceed to litigation in court.
• Investigation and enforcement measures: KFTC, Central or local authorities have the power to investigate (officials may inspect production facilities, warehouses, collect samples, and request businesses to produce records or documents) if a violation is suspected. If a violation is found, authorities may issue a ‘corrective order,’ a ‘recall order,’ require cessation of the violating conduct, or even suspend business operations. Non-compliance may result in criminal prosecution, imprisonment, or fines under the relevant laws (FAOC, PLA, Advertising Act, E-Commerce Act).
• Litigation – class action: Under the FAOC, consumer organizations have the right to file class actions on behalf of multiple consumers when common interests are violated (Article 70 of the FAOC). However, in practice, from 2006 to 2021, only eight class actions were filed due to complex procedures, difficulty of proof, high costs, etc. In cases where administrative measures such as corrective orders or recall orders are issued, businesses or individuals subject to the orders may appeal through the administrative courts (to annul the order) or file an appeal if subject to criminal penalties.
• Litigation and appeals: Measures taken by government authorities (e.g., recall orders, corrective orders) are considered ‘administrative decisions’ and may be challenged in court by the affected party through administrative litigation. Criminal proceedings for violations of consumer protection laws may also be appealed through the judicial system. Filing an appeal does not automatically suspend the effect of the order or penalty; the court may decide to stay enforcement if there is an urgent reason to prevent irreparable harm.

VII. Current trends and future challenges

Finally, to illustrate that ‘Korean consumer protection law’ is not static but continuously evolving:

• E-commerce and cross-border platforms: After the COVID-19 pandemic, online shopping surged, bringing new issues such as “dark patterns” (user interface designs that mislead users), hidden advertising, and deceptive tactics. The KFTC and the Korea Consumer Agency have focused on addressing these practices. Particularly for foreign platforms operating in the Korean market (without a local headquarters), applying Korean law poses a challenge — the KFTC has announced a strict policy to regulate such platforms.
• Improving the class action system: Currently, class actions in Korea are rarely pursued due to evidentiary, cost, and procedural barriers. Consequently, there are proposals to amend the law to expand the ability to file such suits—for example, allowing claims based on “potential violations” rather than waiting for actual harm to occur.
• Strengthening control over unfair contract terms: Authorities are considering applying stricter criteria to assess “unreasonably disadvantageous” terms, particularly in online contracts, long-term service agreements, and contracts containing clauses that excessively waive consumer rights.
• International cooperation: Korea participates in international forums (OECD, United Nations, international product safety organizations) to coordinate cross-border product regulation and share information when hazardous products from abroad affect Korean consumers.

VIII. Conclusion

• For consumers:You have the right to request transparent information, the right to cancel transactions in e-commerce, the right to compensation if a product causes harm, and the right to take legal action when a business violates the law. Korean law provides strong tools for protection, not just by words.
• For businesses (including international businesses wishing to operate in Korea): It is necessary to strictly comply with laws regarding labeling, truthful advertising, reasonable contract terms, and product safety, and to establish procedures for recalls and responses in the event of defective products.
• Special note: In the era of international commerce, if you sell goods cross-border into Korea, you may be subject to Korean consumer protection laws — meaning you cannot consider yourself “beyond the law”.

IX. About NYLA – Korean Legal Office

■ NYLA – Your Trusted Legal Partner in Korea

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