K-Pop's Big 4 In Trouble! HYBE, SM, YG And JYP Fined 10 Million Won For Violating Consumer Rights

HYBE, SM Entertainment, JYP Entertainment and JYP Entertainment were recently fined by the Korea Fair Trade Commission (KTC). The KTC reportedly imposed corrective orders and fined the online stores of the Big 4 labels a whopping 10.5 million won for violating consumer rights

HYBE, SM, YG and JYPE fined by KTC

On August 11, Weverse (HYBE), YG Plus (YG), SM Brand Marketing (SM) and JYP Three Sixty (JYPE) were all found guilty of having violated the Electronic Commerce Act as they set arbitrary refund periods shorter than the legally mandated one and imposed stringent conditions for refunds. Additionally, the Big 4's lack to provide specific information about any product's delivery was also deemed as a violation by the FTC.

For the unversed, as per the current Electronic Commerce Act, customers can claim a refund within three months of receiving a product if it is defective. However, SM Entertainment and JYP Entertainment's stores violated these rights by asking customers to submit claims for defective or incorrect items within seven days of delivery. To make matters worse, SM's policy states that any product being returned due to change of mind must arrive at their logistics center within seven business days of the original delivery date, contrary to the legal provisions. SM and JYPE also require customers to provide video evidence of the product’s unboxing to get a refund, which is an illegal policy.

That's not all! JYPE and SM along with HYBE refuse to offer any compensation for the lost items after a 30 day period, even though the law allows claims within three months of receipt.

As for YG Entertainment, the label faced flak for its restrictive policies regarding event-related purchases as they don't allow refunds or cancellations after the event's application period comes to an end. However, by law, customers can cancel such purchases before the winners of the events are announced.

As a result, all four companies were fined a collective 10.5 million won. While Weverse was fined 3 million won, the Big 3 were fined 2.50 million won each. Additionally, in response to FTC’s sanctions, the Big 4 have corrected their policies.

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