[Alpha Biz= Kim Jisun] South Korea’s Korea Fair Trade Commission said on June 10 that it has corrected unfair terms and conditions used by 24 entertainment companies, including Big Hit Music, SM Entertainment, YG Entertainment, Weverse Company, Kakao Entertainment, and CJ ENM, for improperly restricting refunds on paid fan club memberships.

Paid fan memberships typically offer benefits such as early access to concert and fan meeting tickets, exclusive merchandise purchasing opportunities, and access to members-only digital content during the subscription period.

The KFTC determined that clauses broadly restricting refunds—such as after a certain period or upon partial use of services—unfairly impose excessive penalties on consumers under Korea’s terms and conditions law.

For example, Big Hit Music and Starship Entertainment had provisions denying refunds if more than seven days had passed since sign-up or if membership benefits had been used. P Nation maintained a clause prohibiting refunds altogether in cases of simple change of mind after subscription.

Under the revised rules, full refunds must be provided if no services have been used within seven days of sign-up. If more than seven days have passed or benefits have been used, companies may deduct a cancellation fee—typically 10% of the membership fee—along with charges based on usage or elapsed time before refunding the remaining balance.

The KFTC also addressed cases where renewing a membership before the expiration of an existing one led to the loss of the remaining validity period upon refund, as seen with SM Entertainment. The commission ordered that the remaining period of the original membership must be restored in such cases.

Additionally, the regulator required the removal of clauses that denied refunds even when services could not be provided due to changes such as the addition, withdrawal, or replacement of artists. It found that such provisions unfairly exempt companies from responsibility in situations that may fall within their control.

The KFTC further ruled that clauses allowing service changes or suspension based on vague reasons such as “management decisions,” or permitting unilateral deletion of user content under broadly defined conditions, were unfair to consumers. Companies have been instructed to clarify and specify such terms.

 

 

[ⓒ 알파경제. 무단전재-재배포 금지]