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ACT ON DOOR-TO-DOOR SALES — 법갈피

영문법령 / ACT ON DOOR-TO-DOOR SALES

ACT ON DOOR-TO-DOOR SALES

법률타법개정시행 2025-01-21공정거래위원회 · 제20712호 · 공포 2025-01-21

CHAPTER I GENERAL PROVISIONS

Article 1(Purpose) #

The purpose of this Act is to protect the rights and interests of consumers and to raise market confidence by providing for matters regarding fair transactions of goods and services through door-to-door sales, telemarketing, multi-level marketing, door-to-door sales under sponsorship, recurring transactions, transactions for soliciting business, etc., thereby contributing to the sound development of the national economy.

Article 2(Definitions) #

The terms used in this Act are defined as follows: <Amended on Mar. 21, 2023>

1. The term "door-to-door sales" means that a person engaging in the business of selling (including consignment sales and brokerage; hereinafter the same shall apply) goods or services (including a right to use a certain facility or to receive services; hereinafter the same shall apply) (hereinafter referred to as "sales business entity") sells goods or services (hereinafter referred to as "goods or services") by soliciting consumers at anyplace, other than his or her sales office, distribution shop, or other place of business prescribed by Ordinance of the Prime Minister (hereinafter referred to as "place of business") to receive subscription for a contract or conclude a contract (including where such person solicits consumers at any place, other than a place of business by making recommendations or by other means prescribed by Ordinance of the Prime Minister to receive subscription for a contract or enter into a contract at a place other than the place of business);

2. The term "door-to-door seller" means a person who sets up or manages and operates an organization for door-to-door sales in order to engage in the business of door-to-door sales (hereinafter referred to as "door-to-door sales business entity"), or a person who engages in door-to-door sales on behalf of a door-to-door sales business entity (hereinafter referred to as "door-to-door salesperson");

3. The term "telemarketing" means selling goods or services by making recommendations to consumers by telephone or by inducing consumers to respond to a call;

4. The term "telemarketer" means a person who sets up or manages and operates an organization for telemarketing in order to engage in the business of telemarketing (hereinafter referred to as "telemarketing business entity"), or a person who engages in telemarketing on behalf of a telemarketing business entity (hereinafter referred to as "telemarketing salesperson");

Article 7(Duty of door-to-door sellers or telemarketers to provide information to consumers) #

(1) A door-to-door seller or telemarketer shall explain the following matters to a consumer so that the consumer can understand details of a contract for the sale of goods or services before signing the contract:

1. The name (referring to the representative's name, if the door-to-door seller or telemarketer is a corporation), trade name, address, telephone number, and e-mail address of the door-to-door seller or telemarketer;

2. The name, address, telephone number, and e-mail address of the door-to-door or telemarketing salesperson; provided, cases where a door-to-door sales or telemarketing business entity enters into a contract directly with a consumer shall be excluded herefrom;

3. The name, kind, and details of goods or services;

4. The price of goods or services, and methods and timing of payment of the price;

5. The methods and timing of provision of goods or services;

6. Matters regarding deadlines, execution methods for, and effects of withdrawal of subscription and cancellation of contract (hereinafter referred to as "withdrawal of subscription, etc."), and forms required for the exercise of a right to withdrawal of subscription, etc., as prescribed by Ordinance of the Prime Minister;

7. Conditions and procedures for the exchange, return, warranty repair, and refund of the price of goods or services;

8. Technical matters necessary for installation and transmission of goods or services that can be supplied by electronic means;

9. Matters regarding the compensation for consumer damage, and settlement of consumers' complaints about goods or services and of disputes between consumers and business entities;

10. Standard terms and conditions of the transaction;

11. Other matters prescribed by Presidential Decree, which are necessary for the terms and conditions affecting consumers' purchase decision or for the consumer damage relief.

(2) When a door-to-door seller or telemarketer enters into a contract for sale of goods or services with a consumer, he or she shall issue to the consumer a contract stating the matters specified in the subparagraphs of paragraph (1).

(3) If a door-to-door seller or telemarketer intends to enter into a contract for goods or services with a minor, he or she shall obtain consent thereto from the legal guardian of the minor. In such cases, the minor shall be informed that the minor himself or herself or his or her legal guardian may cancel the contract if the legal guardian declines consent to the contract.

(4) As for a contract for telemarketing among contracts under paragraph (2), the details of the contract may be sent by facsimile or electronic documents (referring to electronic documents as defined in subparagraph 1 of Article 2 of the Framework Act on Electronic Documents and Transactions; hereinafter the same shall apply) with the consumer's consent thereto in lieu of the issuance of the contract. In such cases, if a dispute arises with regard to the details or arrival of a contract sent by facsimile or electronic documents, the relevant telemarketer shall bear the burden of proof thereof. <Amended on Jun. 1, 2012>

(5) A door-to-door sales or telemarketing business entity shall comply with the terms and conditions of a transaction in good faith as explained or stated to the consumer in accordance with paragraphs (1) and (2).

Article 8(Withdrawal of subscription) #

(1) A consumer who has signed a contract for purchase of goods or services through door-to-door sales or telemarketing (hereinafter referred to as "door-to-door sales, etc.") is entitled to withdrawal of subscription, etc. within the relevant period specified in the following subparagraphs (or the agreed-upon period, if the parties to a transaction have agreed on a period longer than the relevant period specified in the following subparagraphs):

1. 14 days from the receipt of the contract under Article 7 (2); provided, if goods or services are provided later than the date on which the contract is received, the period shall be 14 days from the date on which goods or services are provided, or on which the provision of goods or services commences;

2. 14 days from the date on which the consumer became aware of, or could have become aware of, the address of the door-to-door seller or telemarketer in any of the following cases:

(a) Where the contract has not been received in accordance with Article 7 (2);

(b) Where the contract has been received without the address of the door-to-door seller or telemarketer stated therein;

(c) Where it is impossible to withdraw subscription or cancel the contract within the period specified in subparagraph 1 due to a change of the address of the door-to-door seller or telemarketer or other causes;

3. 14 days from the date on which the consumer became aware, or could have become aware, that he or she has a right to withdraw subscription or cancel the contract, if the contract under Article 7 (2) does not provide for matters regarding withdrawal of subscription, etc.;

4. 14 days from the date on which hindrance ends, where the door-to-door sales or telemarketing business entity hinders withdrawal of subscription, etc.

(2) In any of the following cases, no consumer may withdraw subscription or cancel the contract under paragraph (1) against the will of the relevant door-to-door seller or telemarketer; provided, if the door-to-door seller or telemarketer has not taken measures required under paragraph (5), the consumer may withdraw subscription or cancel the contract even in the cases falling under subparagraphs 2 through 4:

1. If goods or services have been destroyed or damaged due to a cause attributable to the consumer; provided, where outer packaging is damaged in the course of verifying the content of goods or services shall be excluded herefrom;

2. If the value of goods or services has been significantly diminished as a consequence of the consumer's use or partial consumption of goods or services;

3. If the value of goods or services has been significantly diminished with the passage of time to the degree that said goods or services become un-resalable;

4. If the outer packaging of replicable goods or services has been damaged;

5. Other cases prescribed by Presidential Decree for security in transactions.

(3) If the content of goods or services is different from that on the label or in the advertisement or if a contract is not performed in compliance with the terms and conditions of the contract, the consumer may withdraw subscription or cancel the contract within three months from the date on which goods or services are provided, or 30 days from the date on which the consumer became aware, or could have become aware, of such non-conformity, notwithstanding paragraph (1) or (2).

(4) When a consumer withdraws subscription or cancels a contract in accordance with paragraph (1) or (3) in writing, such withdrawal or cancellation shall become effective on the date the document stating his or her intention of withdrawal of subscription, etc. is dispatched.

(5) As for goods or services for which a consumer is not allowed to withdraw subscription or cancel a contract in accordance with paragraph (2) 2 through 4, the door-to-door seller or telemarketer shall indicate such fact in the outer packaging of the relevant goods or services, or any other place where consumers can readily notice, or provide samples for trial, or take other measures, so that the consumer is not interfered with his or her exercise of the right to withdrawal of subscription, etc.

Article 9(Effects of withdrawal of subscription) #

(1) When a consumer withdraws subscription or cancels a contract in accordance with Article 8 (1) or (3), he or she shall return the goods or services already provided.

(2) A door-to-door seller or telemarketer (including a person who has received the price for goods or services from a consumer and a person who has entered into a contract for door-to-door sales, etc. with a consumer; hereafter the same shall apply in paragraphs (2) through (8)) shall refund the price for the goods or services already paid within three business days from the date on which the goods or services are returned. If a door-to-door seller or telemarketer delays refund to a consumer, the door-to-door seller or telemarketer shall pay the consumer late payment interest calculated by applying the interest rate prescribed by Presidential Decree (hereinafter referred to as "late payment penalty"), taking into consideration the overdue interest rate applied by banks under the Banking Act and other economic circumstances, within the limit of 40/100 per year based upon the period of delay.

(3) When a door-to-door seller or telemarketer intends to refund the price for goods or services in accordance with paragraph (1) or (2) to a consumer who paid the price for the goods or services by credit card, as defined in subparagraph 3 of Article 2 of the Specialized Credit Finance Business Act, or other means of payment prescribed by Presidential Decree (hereinafter referred to as "credit card, etc."), the door-to-door seller or telemarketer shall request the business entity that provided the means of payment, which include credit card, etc. (hereinafter referred to as "settlement agency") without delay to suspend or cancel the bill for the price for the goods or services; provided, if the door-to-door seller or telemarketer has already received the price for the goods or services from the settlement agency, he or she shall refund it to the settlement agency without delay and shall notify the consumer of the fact.

(4) Upon receipt of refund by a door-to-door seller or telemarketer for the goods or services in accordance with the proviso of paragraph (3), the settlement agency shall refund said amount to the consumer or take measures necessary for refunding it without delay.

(5) If a door-to-door seller or telemarketer delays refund to a consumer in cases under the proviso of paragraph (3), thus prompting the consumer to pay the price, the door-to-door seller or telemarketer shall pay to the consumer late payment penalty for the period of delay.

(6) If a door-to-door seller or telemarketer does not refund a price to a settlement agency without good cause, the consumer may request the settlement agency to offset the refundable amount to which the consumer is entitled against his or her obligations owed to the door-to-door seller or telemarketer. In such cases, the settlement agency may offset such price against other obligations owed to the door-to-door seller or telemarketer, as prescribed by Presidential Decree.

(7) If a settlement agency neglects the offset prescribed in paragraph (6) without good cause, the consumer may refuse to pay the price to the settlement agency. In such cases, neither the door-to-door seller nor telemarketer nor the settlement agency shall handle the consumer as a person who fails to perform his or her obligations by the agreed-upon date on the ground of refusal of such payment, or treat the consumer unfavorably.

(8) If goods or services have already been used or partially consumed in the cases under paragraph (1), the door-to-door seller or telemarketer may request the consumer to pay the amount equivalent to the benefits that the consumer has acquired by using or partially consuming the goods or services or to the expenses incurred in providing such goods or services within the limit prescribed by Presidential Decree.

(9) Where a consumer withdraws subscription or cancels a contract in accordance with Article 8 (1) or (3), the expenses incurred in returning the provided goods or services shall be borne by the door-to-door seller or telemarketer, who shall not request the consumer to pay any penalty or damages on the grounds of withdrawal of subscription, etc.

(10) If a door-to-door seller or telemarketer, the person who received the price for goods or services, or the person who concluded a contract for door-to-door sales, etc. with the consumer is not a single person, such persons shall be jointly liable to perform the obligation to refund the price for the goods or services in accordance with paragraphs (1) through (9) upon withdrawal of subscription, etc. under Article 8 (1) or (3).

Article 11(Prohibited Acts) #

(1) No door-to-door seller or telemarketer shall commit any of the following acts:

1. Threatening a consumer with intent to compel the consumer to sign a contract for sale of goods or services or to hinder the consumer from withdrawing subscription or canceling a contract;

2. Soliciting or trading with a consumer, or hindering a consumer from withdrawing subscription or canceling a contract by making a false or exaggerated representation or by using any fraudulent means;

3. Collecting expenses, money, or other valuables in excess of the level prescribed by Presidential Decree, regardless of name or form, such as an admission fee, sales aids, sales individually allocated, or an education fee, from door-to-door or telemarketing salesperson or from persons who intend to become such salespersons, requiring such salespersons or persons to purchase goods or services, or imposing obligations upon such salespersons or persons as a condition required for becoming a door-to-door or telemarketing salesperson or maintaining the status;

4. Imposing an obligation to recruit other door-to-door or telemarketing salespersons upon door-to-door or telemarketing salesperson;

5. Changing the address or telephone number with intent to hinder a consumer from withdrawing subscription or canceling or terminating a contract;

6. Causing damage to consumers by neglecting to rectify the insufficiency in human resources or facilities necessary for the settlement of disputes or complaints for a substantial period;

7. Providing goods or services unilaterally to a consumer without the consumer's subscription and requesting the consumer to pay the price for goods or services;

8. Compelling a consumer, by telephone, facsimile, or computer communications, to buy goods or services, although the consumer clearly expresses that he or she does not wish to buy such goods or services;

9. Using information on a consumer without the consumer's consent thereto or beyond the extent of consent given (including where such information is provided to a third party; hereinafter the same shall apply); provided, cases falling under any of the following items shall be excluded herefrom:

(a) Cases prescribed by Presidential Decree where it is inevitable to perform the contract with a consumer, such as the delivery of goods or services;

(b) Cases where it is necessary to settle the price for a transaction of goods or services;

(c) Cases prescribed by Presidential Decree as necessary to verify the consumer's identity in order to prevent misappropriation;

(d) Cases where it is inevitably required by any provision of a statute or a statute;

(2) The Fair Trade Commission may establish and publicly notify guidelines with which any door-to-door seller or telemarketer shall comply in order to prevent violations of this Act and consumer damage.

Article 13(Registration of multi-level marketing business entities) #

(1) A multi-level marketing business entity shall file the following documents for registration with the Fair Trade Commission, the Special Metropolitan City Mayor, or the competent Metropolitan City Mayor, Special Self-Governing City Mayor, Do Governor, or Special Self-Governing Province Governor (hereinafter referred to as "Mayor/Do Governor"), as prescribed by Presidential Decree:

1. An application stating the trade name, address, telephone number, and e-mail address (including the representative's name, resident registration number, and address, if the applicant is a corporation);

2. A document certifying that the scale of business is not smaller than the amount prescribed by Presidential Decree, with its capital being at least 300 million won;

3. Documents certifying the conclusion of a contract for indemnity insurance against consumer damage under Article 37;

4. Documents regarding criteria for calculation and payment of bonus;

5. Documents stating matters regrading sales methods, including inventory management and the payment of bonus;

6. Other documents prescribed by Ordinance of the Prime Minister regarding matters necessary to verify the identity of multi-level marketers.

(2) In the event of a change in any matter under subparagraphs 1 through 4, from among the matters registered in accordance with paragraph (1), the multi-level marketing business entity shall file a report thereon, as prescribed by Presidential Decree.

(3) When a multi-level marketing business entity temporarily or permanently closes down his or her business or resumes his or her business after temporary closure, he or she shall file a report thereon, as prescribed by Presidential Decree, and the registration filed in accordance with paragraph (1) shall become ineffective when a report on permanent closure is filed; provided, a ground for revocation of registration becomes applicable to a business entity before a report on permanent closure is filed, his or her registration shall be deemed revoked on the date the report on closure is filed.

(4) The Fair Trade Commission or a Mayor/Do Governor shall notify whether a report on changes under paragraph (2) is accepted to a person who has filed such report, within 10 days from the date of receipt of the report. <Added on Apr. 20, 2021>

(5) Where the Fair Trade Commission or a Mayor/Do Governor fails to notify a person who has filed a report as to whether or not to accept it or the extension of the processing period pursuant to the statutes or regulations related to the processing of civil petitions, within the period prescribed in paragraph (4), the report shall be deemed accepted on the following day after the end of such period (referring to the relevant processing period where the processing period under the statutes or regulations related to the processing of civil petitions is extended or re-extended). <Added on Apr. 20, 2021>

(6) The Fair Trade Commission shall disclose the following information on a multi-level marketing business entity to the public, as prescribed by Presidential Decree; provided, the foregoing shall not apply where any confidential information on business management or trade of a multi-level marketing business entity is disclosed, where any information deemed likely to significantly harm legitimate interests of a multi-level marketing business entity or personal information is disclosed, and where information is deemed likely to violate confidentiality or the freedom of privacy: <Amended on Apr. 20, 2021>

1. Matters registered in accordance with paragraph (1);

2. Other matters that the Fair Trade Commission deems necessary to establish order for fair trade and to protect consumers.

(7) If it is necessary to disclose information in accordance with paragraph (6), the Fair Trade Commission may request a multi-level marketing business entity to submit relevant data. In such cases, a multi-level marketing business entity shall comply with such request, in the absence of good cause. <Amended on Apr. 20, 2021>

Article 15(Multi-level marketing salespersons) #

(1) A person who intends to join a multi-level marketing organization as a multi-level marketing salesperson shall register himself or herself with the multi-level marketing business entity that manages and operates the organization, as prescribed by Ordinance of the Prime Minister.

(2) Any of the following persons shall be disqualified for registration as a multi-level marketing salesperson: <Amended on Jan. 26, 2012; Mar. 29, 2016; Jul. 11, 2023>

1. A State public official, local public official, educational public official, or a teaching member under the Private School Act (including instructors under Article 14 (2) of the Higher Education Act);

2. A minor; provided, this shall not apply where the legal representative who does not fall under subparagraph 4 or 5 consents thereto;

3. A corporation;

4. The controlling shareholder or an executive officer or employee of a multi-level marketing business entity;

5. A person who has received orders to take measures for rectification under Article 49, at least two times; provided, this excludes persons in whose case three years have passed since they completed fulfilling the last measure for rectification;

6. A person who violates this Act and is sentenced to imprisonment with labor and in whose case five years have yet to pass since the completion of the execution thereof (including where the execution is regarded completed) or since the person was exempt from execution of sentence;

7. A person sentenced to suspension of imprisonment with labor for a violation of this Act and, who is under suspension thereof.

(3) A multi-level marketing business entity shall issue a certificate of registration (including a certificate of registration prepared in an electronic document and electronic device if a multi-level marketing salesperson gives a written consent in advance) to a multi-level marketing salesperson who joins a multi-level marketing organization managed and operated by the business entity, as prescribed by Ordinance of the Prime Minister. <Amended on Jun. 12, 2018>

(4) A multi-level marketing business entity shall keep a register of multi-level marketing salespersons, as prescribed by Ordinance of the Prime Minister, and shall allow a consumer to verify the identity of a multi-level marketing salesperson registered therein at the consumer's request, in order to prevent or relieve consumer damage.

(5) A multi-level marketing business entity shall issue a pocketbook for multi-level marketing salespersons (including a pocketbook prepared in an electronic document and electronic device if a multi-level marketing salesperson gives a written consent in advance), from which information on the following matters can be found, to each multi-level marketing salesperson registered in accordance with paragraph (1): <Amended on Jun. 12, 2018>

1. Criteria for calculation and payment of bonuses;

2. Matters regarding recruitment of and sponsorship for subordinate salespersons;

3. Matters regarding the return of goods or services and the withdrawal of multi-level marketing salespersons;

4. Rules with which multi-level marketing salespersons shall comply;

5. Other matters prescribed by Ordinance of the Prime Minister.

Article 18(Effects of withdrawal of subscription) #

(1) If the counter-party to a multi-level marketing (referring to a multi-level marketing salesperson or consumer, if a multi-level marketer sells goods or services to a multi-level marketing salesperson or consumer, or referring to a consumer, if a multi-level marketing salesperson sells goods or services to a consumer; hereafter in this Chapter the same shall apply) withdraws subscription or cancels a contract in accordance with Article 17, he or she shall return the goods or services already provided.

(2) A multi-level marketer (including a person who has received the price for goods or services from the counter-party or a person who has entered into a contract for a multi-level marketing with the counter-party; hereafter in paragraphs (2) through (8) the same shall apply) shall refund the price already received for the goods or services within three business days from the date on which the goods or services are returned; provided, a multi-level marketing business entity may deduct expenses not exceeding the maximum amount prescribed by Presidential Decree from the price refundable to a multi-level marketing salesperson for the goods or services, but a multi-level marketer shall pay the late payment penalty for the period of delay, if he or she delays refund to the counter-party.

(3) Where the counter-party to a contract under which the price has been paid by credit card, etc. withdraws subscription or cancels the contract, the multi-level marketer shall request the settlement agency without delay to suspend or cancel the bill for the price for goods or services; provided, if the multi-level marketer has already received the price for the goods or services from the settlement agency, he or she shall refund it to the settlement agency without delay and shall notify the counter-party thereof, and the multi-level marketer shall pay the late payment penalty for the period of delay after the date of settlement to the counter-party, if the multi-level marketer delays refunding the price to the counter-party to cause the counter-party to settle the price.

(4) Upon receipt of the price refunded by a multi-level marketer for goods or services in accordance with the proviso of paragraph (3), the settlement agency shall refund it to the counter-party or take measures necessary to refund it without delay, and if a multi-level marketer does not refund a price to the settlement agency without good cause, the counter-party may request the settlement agency to offset the refundable amount to which the consumer is entitled against his or her obligations owed to the multi-level marketer, and the settlement agency may offset such price against other obligations owed to the multi-level marketer, as prescribed by Presidential Decree.

(5) If a settlement agency neglects to perform the offset prescribed in paragraph (4) without good cause, the counter-party may refuse to pay the price to the settlement agency. In such cases, neither the multi-level marketer nor the settlement agency shall register the counter-party as a person who fails to pay his or her obligations by the agreed-on date on the ground of refusal to pay, or treat the counter-party unfavorably.

(6) If the amount refunded by a multi-level marketer is greater than that of the goods or services provided by him or her to the multi-level marketing salesperson where the multi-level marketer refunds the price for the goods or services following withdrawal of subscription, etc. under Article 17, the multi-level marketer may request the salesperson to pay the difference.

(7) If goods or services have already been used or partially consumed in the cases under paragraph (1), the multi-level marketer may request the counter-party to pay the amount equivalent to the benefits that the counter-party has acquired by using or partially consuming goods or services or the costs and expenses incurred in providing goods or services.

(8) Where the counter-party withdraws subscription or cancels a contract in accordance with Article 8 (1) or (3), which shall apply mutatis mutandis pursuant to Article 17 (1), the costs and expenses incurred in returning the goods or services provided shall be borne by the multi-level marketer, who shall not charge a penalty or damages therefor to the counter-party.

(9) If a multi-level marketer is not the same as the person who received the price for goods or services or as the person who executed a multi-level marketing contract with the counter-party, both multi-level marketer and such persons shall be jointly liable to refund the price for the relevant goods or services in accordance with paragraphs (1) through (5) and (8).

Article 20(Criteria for payment of bonuses) #

(1) No multi-level marketing business entity shall calculate or pay a bonus contrary to the guidelines of which a multi-level marketing business entity has notified multi-level marketing salespersons with respect to the calculation and payment of bonuses and shall discriminate against a multi-level marketing salesperson by any other wrongful means.

(2) A multi-level marketing business entity shall establish objective and clear criteria for the calculation and payment of bonuses and shall comply with the procedures prescribed by Presidential Decree in making any changes to the criteria for the calculation and payment of bonuses.

(3) The total amount of bonuses that a multi-level marketing business entity may pay to a multi-level marketing salesperson shall not exceed the amount equivalent to 35/100 of the total value of goods or services supplied by the multi-level marketing business entity to the multi-level marketing salesperson (including the value-added tax; hereafter in this Article referred to as "total value"), and detailed methods for the calculation of the total value and bonuses are as follows:

1. The total value shall be determined as at the time of shipment or provision;

2. A payable bonus shall be determined as at the time the ground to pay the bonus occurs;

3. The total value and bonuses shall be calculated on a yearly basis; provided, if the duration of operation of business of multi-level marketing is less than one year, the total value and bonuses shall be based on the period of actual operation of business of the multi-level marketing business entity;

4. When the total value is calculated where goods or services are provided by consignment sales, the total value shall be based on the price at which the multi-level marketing business entity to whom sales have been entrusted sells to multi-level marketing salespersons, while where goods or services are provided by brokerage, the total value shall be based on the commission that the multi-level marketer has received from the business entity that requested brokerage.

(4) A multi-level marketing business entity shall, at the request of a multi-level marketing salesperson, allow the multi-level marketing salesperson to inspect statements of calculation and payment of bonuses.

(5) No multi-level marketing business entity shall discriminate against any subordinate salesperson or any subordinate salesperson thereof in paying bonuses, irrespective of the outcomes of the salesperson's sales, on condition that the multi-level marketing salesperson shall recruit or assist a certain number of subordinate salespersons.

Article 23(Prohibited Acts) #

(1) No multi-level marketer shall commit any of the following acts:

1. Threatening the counter-party with intent to compel the counter-party to sign a contract for sale of goods or services or to hinder the counter-party from withdrawing subscription or canceling a contract;

2. Soliciting the counter-party to make a transaction or hindering a consumer from withdrawing subscription or canceling a contract by making a false or exaggerated representation or by using any fraudulent means, making a false representation about the price, quality, etc. of goods or services, or misleading the counter-party to believe that goods or services are significantly better or more favorable than they actually are;

3. Changing the address or telephone number with intent to hinder the counter-party from withdrawing subscription or canceling or terminating a contract;

4. Causing any injury or damage to the counter-party by neglecting to rectify the inefficiency of human resources or facilities necessary for settlement of disputes or complaints for a substantial period;

5. Selling goods or services to the counter-party by force, such as by providing goods or services unilaterally to the counter-party without the counter-party's subscription and requesting the counter-party to pay the price for goods or services, or selling goods or services to a subordinate salesperson;

6. Compelling a consumer, by telephone, facsimile, or computer communications, to buy goods or receive services, although the consumer clearly expresses that he or she does not wish to buy such goods or services;

7. Misleading consumers to believe that a multi-level marketing salesperson not employed by a multi-level marketing business entity is a person employed by the multi-level marketing business entity or allowing a person not registered as a multi-level marketing salesperson to work as a multi-level marketing salesperson;

8. Operating the business without a contract for indemnity insurance against consumer damage, etc. under Article 37;

9. Fixing the price for individual goods or services sold to the counter-party in excess of the amount prescribed by Presidential Decree;

10. Using information on a consumer without the consumer's consent or beyond the extent of such consent; provided, the cases falling under any of the following items shall be excluded herefrom:

(a) Cases prescribed by Presidential Decree where it is inevitable to perform the contract with a consumer, such as the delivery of goods or services;

(b) Cases where it is necessary to settle the price for a transaction of goods or services;

(c) Cases prescribed by Presidential Decree as necessary to verify the consumer's identity in order to prevent misappropriation;

(d) Cases where it is inevitably required by any provision of a statute or a statute;

11. Transferring or acquiring a multi-level marketing organization or the status of a multi-level marketing salesperson; provided, the foregoing shall not apply where a person inherits the status of a multi-level marketing salesperson or where a business is transferred, acquired, or merged.

(2) No multi-level marketing business entity shall aid and abet a multi-level marketing salesperson to commit any prohibited act under paragraph (1).

(3) The Fair Trade Commission may establish and publicly notify guidelines with which multi-level marketers shall comply in order to prevent violations of this Act and consumer damage.

Article 24(Prohibition of speculative expansion of sales force) #

(1) No one shall commit any of the following acts by using a multi-level marketing organization or any similar organization which is comprised of persons by levels: <Amended on May 28, 2013>

1. Making a monetary transaction without a transaction of goods or services or making an actual monetary transaction in disguise of a transaction of goods or services, which falls under any of the following items:

(a) Paying bonuses to salespersons for the sales of goods or services at as a significantly high price as 10 or more times the acquisition price or market price;

(b) Paying bonuses without providing relevant goods or services without good cause after executing a contract for sale of goods or services with a salesperson;

(c) Any other actual monetary transaction in light of the sales business entity's capacity for the provision of goods or services, the outcomes of provision of goods or services to consumers, contracts for provision or sales of goods or services between the sales business entity and consumers, and terms and conditions of payment of bonuses;

2. Providing economic benefits to a salesperson or a prospective salesperson only for recruitment of subordinate salespersons or providing economic benefits in addition to a bonus to a salesperson or a prospective salesperson without good cause;

3. Promising to pay a bonus in violation of Article 20 (3) (including cases to which the aforesaid provisions shall apply mutatis mutandis pursuant to Article 29 (3)) to recruit a salesperson or inducing a person to join a sales force;

4. Collecting expenses, money, or other goods of not more than 100,000 won in excess of the maximum amount prescribed by Presidential Decree, regardless of name or form, such as an admission fees, sales aids, sales individually allocated, or education fees, from salespersons or prospective salespersons or imposing such obligation upon such salespersons or prospective salespersons;

5. Selling gift certificates (referring to securities that are issued by an issuer in the form of unregistered certificates stating a certain amount or a certain quantity of goods or services and with which a holder is entitled to receiving goods or services from the issuer or a person designated by the issuer (hereafter in this Article referred to as "issuer, etc.") in accordance with terms and conditions stated in the certificates by presenting, granting, or using the certificates in any other manner; hereafter in this Article the same shall apply) to salespersons in a manner specified in either of the following:

(a) Repurchasing gift certificates sold by the sales business entity to consumers or soliciting other persons to purchase such certificates;

(b) Paying bonuses to any salesperson at a level where his or her transactions of goods or services cannot be deemed as the real transactions of goods or services in light of the capacity of issuer, etc. for the provision of goods or services, the outcomes of provision of goods or services to consumers, the amount of gift certificates issued, etc.;

6. Compelling any person to register himself or herself as a salesperson or to buy goods or services by using social relationships, etc.;

7. Compelling salespersons or prospective salespersons to undergo training or stay together against their will;

8. Attracting a person on the pretext of referral of a job or part-time job, presentation sessions, educational meetings, etc. without clearly stating that the purpose is to recruit salespersons.

(2) No multi-level marketing business entity shall aid and abet a multi-level marketing salesperson to commit any prohibited act under paragraph (1).

Article 29(Obligations of door-to-door sellers under sponsorship) #

(1) No door-to-door seller under sponsorship shall pay any bonus to a door-to-door salesperson under sponsorship in relation to performance of purchase or sales of any door-to-door salesperson under sponsorship other than the salesperson's immediately subordinate salespersons or promise a person to pay such bonus to recruit door-to-door salespersons under sponsorship.

(2) Notwithstanding paragraph (3), where goods or services that a door-to-door sales business entity under sponsorship supplies to a door-to-door salesperson under sponsorship are sold to consumers who are not salespersons by not less than 70/100, Articles 20 (3), 23 (1) 8 and 9, and Article 37 shall not apply to such cases, as prescribed by Presidential Decree; provided, the relevant provisions shall apply where goods or services are sold by means of electronic transactions. <Amended on Mar. 21, 2023>

(3) The following subparagraphs shall apply mutatis mutandis to door-to-door sellers under sponsorship. In such cases, "multi-level marketing" shall be construed as "door-to-door sales under sponsorship"; "door-to-door seller or telemarketer" or "multi-level marketer" shall be construed as "door-to-door seller under sponsorship"; "door-to-door sales or telemarketing business entity" or "multi-level marketing business entity" shall be construed as "door-to-door sales business entity under sponsorship"; "door-to-door or telemarketing salesperson" or "multi-level marketing salesperson" shall be construed as "door-to-door salesperson under sponsorship"; and "multi-level marketing organization" shall be construed as "door-to-door sales organization under sponsorship", respectively:

1. Articles 6, 13, 14, and 15 (2); provided, Article 13 (1) 2 shall not apply mutatis mutandis, and Article 13 (1) 3 shall be construed as "documents certifying the conclusion of a contract for indemnity insurance against consumer damage under Article 37 or a document certifying that the distributor falls under Article 29 (2)";

2. Provisions of Articles 16 through 28. In such cases, "35/100" in the provisions, with the exception of the subparagraphs, of Article 20 (3) shall be construed as "38/100".

Article 30(Duty of recurring or business-soliciting transaction business entities to provide information to consumers) #

(1) When a person engaging in recurring transactions or business-soliciting transaction (hereinafter referred to as "recurring or business-soliciting transactions") for a living (hereinafter referred to as "recurring or business-soliciting transaction business entity") enters into a contract for recurring or business-soliciting transactions, with the terms and conditions that are based on, at least, the amount and period prescribed by Presidential Decree, he or she shall explain the following matters to consumers (including persons who purchase goods or services through transactions for soliciting business; hereafter in this Chapter the same shall apply) so that they can understand the content of the contract before executing the contract:

1. The name (referring to the representative's name, if such business entity is a corporation), trade name, address, telephone number, and e-mail address of the recurring or business-soliciting transaction business entity;

2. The name, kind, and details of goods or services sold through recurring transactions (including other goods or services to be purchased separately in connection with recurring transactions, if any) or goods or services sold through transactions for soliciting business;

3. The price for goods or services (including all expenses to be paid in connection with the transaction of goods or services, regardless of name, such as an admission fee and installation charge; hereafter in this Chapter the same shall apply) and the time and method for payment thereof;

4. The method, period, and timing of the transaction of goods or services;

5. Matters prescribed by Presidential Decree as transaction conditions for the business provided through transactions for soliciting business;

6. The method and effect of termination of a contract under Article 31 and forms necessary for the exercise of the right to terminate a contract;

7. Matters regarding compensation for consumer damage and the settlement of complaints about goods or services and of disputes between consumers and the business entity;

8. Standard terms and conditions of the transaction;

9. Other matters prescribed by Presidential Decree as terms and conditions that affect decision on whether to make a transaction and as matters necessary to relieve consumer damage.

(2) When a recurring or business-soliciting transaction business entity enters into a contract for sales of goods or services, it shall issue a contract stating the matters specified in the subparagraphs of paragraph (1) to the consumer.

(3) Where a person engaging in the business of recurring transactions executes a contract for providing services to a consumer on condition that the contract shall be renewed automatically, unless the consumer expressly manifests his or her intention to the contrary, such person shall notify the consumer, in writing or by e-mail, of the fact that the contract will expire within a short period of 50 days through 20 days prior to the expiry of the contract; provided, such notice may be omitted where the duration of a transaction under such contract is not more than two months or where the consumer expresses his or her intention to sign another contract or renew the contract.

(4) Article 7 (3) shall apply mutatis mutandis where a recurring or business-soliciting transaction business entity enters into a contract under paragraph (1) with a minor.

(5) A recurring or business-soliciting transaction business entity shall perform the terms and conditions of a transaction in good faith as explained or stated to consumers in accordance with paragraph (1) or (2).

Article 37(Contract for indemnity insurance against consumer damage) #

(1) A person who intends to register himself or herself as a multi-level marketing business entity or door-to-door sales business entity under sponsorship in accordance with Article 13 (1) or 29 (3) shall enter into a contract that falls under any of the following (hereinafter referred to as "contract for indemnity insurance against consumer damage, etc."):

1. Insurance contract for indemnity against consumer damage;

2. Performance guarantee to secure the payment of indemnity against consumer damage;

3. Contract for mutual aid with a mutual aid association established under Article 38.

(2) The Fair Trade Commission may recommend business entities to enter into a contract for indemnity insurance against consumer damage, etc. in order to protect consumers from door-to-door sales, etc., or recurring or business-soliciting transactions.

(3) The coverage of a contract for indemnity insurance against consumer damage, etc. shall be appropriate for compensating consumers for damage sustained by violations of this Act, and detailed guidelines therefor shall be prescribed by Presidential Decree.

(4) If an event that requires payment of damages to a consumer occurs, the person obligated to pay the damages to the consumer in accordance with a contract for indemnity insurance against consumer damage, etc. shall pay the damages immediately, and a late payment penalty shall be collected for delay in payment.

(5) When a multi-level marketing business entity or door-to-door sales business entity under sponsorship who enters into or maintains a contract for indemnity insurance against consumer damage, etc., submits sales data, etc. it shall not make a false representation of such data.

(6) A person who enters into a contract for indemnity insurance against consumer damage, etc. may use a mark indicating the existence of such contract.

(7) No person who has not contracted for indemnity insurance against consumer damage, etc. shall use a mark under paragraph (6) or produce or use any similar mark.

Article 38(Establishment of mutual-aid associations) #

(1) Business entities that have filed a report in accordance with Article 5 (1) or that have completed registration in accordance with Article 13 (1) or Article 29 (3) may establish a mutual aid association with authorization from the Fair Trade Commission (hereinafter referred to as "mutual aid association") in order to operate an insurance program liable for compensation for consumer damage or a mutual aid program under Article 37 (1) 3, and the criteria for such authorization shall be prescribed by Presidential Decree.

(2) A mutual aid association shall be a corporation and shall be duly formed upon registration for establishment with the registry office having jurisdiction over its principal place of business.

(3) A person who joins a mutual aid association shall pay contributions, etc. required for the implementation of mutual aid programs to the association.

(4) Basic assets of a mutual aid association shall consist of contributions, etc. paid by its members, as prescribed by Presidential Decree, but matters regarding the operation of basic assets of a mutual aid association shall be subject to authorization by the Fair Trade Commission; provided, the Government may grant contributions or subsidies within budgetary limits.

(5) Prerequisites for membership of a mutual aid association, matters regarding executive officers, and matters regarding guidelines for allocation of contributions shall be stipulated by its articles of incorporation.

(6) Matters regarding the procedures for authorization for the establishment of a mutual aid association, provisions of articles of incorporation, the composition and power of the board of directors, the appointment of executive officers, supervision, etc. shall be prescribed by Presidential Decree.

(7) When a mutual aid association intends to implement a mutual aid program under paragraph (1), it shall establish regulations on the mutual aid program and shall obtain authorization therefor from the Fair Trade Commission. The same procedures shall also apply to any amendment to the regulations on a mutual aid program.

(8) The regulations on a mutual aid program under paragraph (7) shall provide for matters necessary to operate the mutual aid program, including the scope of the mutual aid program, mutual aid fees, and legal reserve to be set aside for the mutual aid program.

(9) Except as provided in this Act, provisions regarding incorporated associations in the Civil Act shall apply mutatis mutandis to mutual aid associations.

(10) Business activities of a mutual aid association under this Act shall not be governed by the Insurance Business Act.

Article 42(System for registration of intention to reject telemarketing calls) #

(1) In order to protect consumers from telemarketers' activities, the Fair Trade Commission may establish a system for registration of intention to reject calls, through which consumers can manifest and register their intention to reject calls (hereafter in this Article referred to as "registration system").

(2) When a telemarketer intends to make a telemarketing call to a consumer, he or she shall, as prescribed by Presidential Decree, ascertain whether the consumer's intention to reject such call has been registered in the registration system, and shall not make a telemarketing call to any consumer whose intention to reject telemarketing calls has been registered therein; provided, the foregoing shall not apply where a telemarketing business entity obtains consent individually from a consumer, as prescribed by Ordinance of the Prime Minister.

(3) The Fair Trade Commission may entrust the operation of the registration system to an institution or organization that falls under any of the following subparagraphs and may fully or partially subsidize expenses that such institution or organization will incur in efficient operation of the system:

1. An institution established under the Framework Act on Consumers or a consumer organization registered under the aforesaid Act;

2. A trade association registered under Article 54 or an institution or organization established for the protection of consumers under other statutes or regulations.

(4) The procedures and guidelines for selection of an institution or organization eligible to be entrusted with operations under paragraph (3) shall be prescribed by Presidential Decree.

(5) If it is deemed necessary for appropriate operation and management of administrative affairs entrusted under paragraph (3), the Fair Trade Commission may request the entrusted institution or organization to submit data or may authorize its public officials to inspect entrusted administrative affairs. The methods and procedures for inspections in such cases shall be prescribed by Presidential Decree.

(6) If a person selected as an entrusted business entity under paragraph (3) falls under subparagraph 1 or 2, the Fair Trade Commission shall revoke the selection, but may revoke the selection, if such person falls under subparagraph 3 or 4:

1. If a person was selected as an entrusted business entity by fraud or other wrongful means;

2. If a person uses the registration system for any purpose, other than that specified in paragraph (1) or allows a third person to use the system;

3. If a person fails to meet the criteria for selection under paragraph (4);

4. If it is found impracticable, upon an inspection under paragraph (5), to achieve the original purpose of selection.

(7) Except as provided in paragraphs (1) through (6), matters necessary for the establishment and operation of the registration system shall be prescribed by Ordinance of the Prime Minister.

Article 43(Investigation into violations) #

(1) If a violation of this Act is discovered, the Fair Trade Commission, a Mayor/Do Governor or the head of a Si/Gun/Gu (hereinafter referred to as "administrative authority") may conduct investigations ex officio as necessary; provided, a violation of a regulation regarding multi-level marketing or door-to-door sales under sponsorship may be investigated by the Fair Trade Commission or a Mayor/Do Governor.

(2) When a Mayor/Do Governor or the head of a Si/Gun/Gu intends to conduct an investigation under paragraph (1), he or she shall notify the Fair Trade Commission thereof, and the Fair Trade Commission may request a Mayor/Do Governor or the head of a Si/Gun/Gu to discontinue an investigation, if investigations are likely to overlap. Upon receipt of such request, a Mayor/Do Governor or the head of a Si/Gun/Gu shall discontinue the investigation, unless he or she has a reasonable ground to reject the request.

(3) When an administrative authority completes an investigation under paragraph (1), it shall notify parties to the relevant case of the outcomes thereof in writing (where it intends to issue a disposition, such as an order for corrective action according to the outcomes of the investigation, the details of such disposition shall be notified).

(4) The Fair Trade Commission may organize an investigation team jointly with the Korea Consumer Agency under Article 33 of the Framework Act on Consumers (hereafter in this Article referred to as the "Korea Consumer Agency") for an investigation under paragraph (1). In such cases, the detailed methods and procedures for the organization and investigation of the investigation team and other necessary matters shall be prescribed by Presidential Decree.

(5) The Fair Trade Commission may reimburse executive officers and employees of the Korea Consumer Agency, who join a joint investigation team, for allowances and travel expenses within budgetary limits.

(6) Executive officers and employees of the Korea Consumer Agency, who take charge of the duties under paragraph (4), shall be deemed public officials for the purposes of applying the penalty provisions under Articles 127 and 129 through 132 of the Criminal Act.

(7) If a person suspects a violation of this Act, he or she may report such fact to an administrative authority; provided, a violation of a regulation regarding multi-level marketing or door-to-door sales under sponsorship may be reported to the Fair Trade Commission or a Mayor/Do Governor.

(8) The Fair Trade Commission shall not issue an order to rectify a violation under Article 49 or impose a penalty surcharge for a violation under Article 51, if five years have passed since the date on which the violation ceased; provided, the foregoing shall not apply where an order to rectify a violation or a disposition to impose a penalty surcharge was revoked in accordance with a court judgment and a new disposition is made in accordance with reasoning of the judgment.

Article 49(Measures for rectification) #

(1) If a business entity commits an act that falls under any of the following subparagraphs (including cases to which such subparagraphs shall apply mutatis mutandis pursuant to Article 29 (3)) or fails to perform his or her obligation under this Act, the Fair Trade Commission may order the business entity to take measures to rectify such violation or non-performance: <Amended on Jun. 12, 2018; Apr. 20, 2021>

1. A violation of any provision of Articles 5 (1) through (3), 6, 7 (1) through (3) and (5), 7-2, 8 (5), 9, 10 (1), 12 (1), 13 (1) through (3) and (7), 14 through 24, 26 (1) and (2), 28, 29 (1) and (2), 30, 32 (1) through (3), 33, 35 (2), 37 (1), (4), (5) and (7), 42 (2), 46 (1) and (2), and 55;

2. An act prohibited by any subparagraph of Article 11 (1), 23 (1), 24 (1), or 34 (1);

3. Where an extraordinary sales business entity that shall preserve records of transactions in accordance with the latter part of Article 36 (2) fails to do so, as prescribed by Presidential Decree, with regard to subject matters and scope of records of transactions, the period of preservation, and the method of inspection.

(2) Measures for rectification under paragraph (1) shall include measures falling under any of the following:

1. Cessation of the violation at issue;

2. Performance of the relevant obligation under this Act;

3. Public announcement of the fact that an order to take measures for rectification has been received;

4. Measures necessary for preventing or relieving consumer damage;

5. Other measures necessary for rectification.

(3) Matters necessary for the announcement of the fact that an order to take measures for rectification has been received under paragraph (2) 3 shall be prescribed by Presidential Decree.

(4) If a business entity falls under any of the following subparagraphs, the Fair Trade Commission may order the business entity to suspend operation of its business completely or partially for a specified period not exceeding one year, as prescribed by Presidential Decree:

1. If an identical violation recurs twice or more times for the last three years, notwithstanding the measures for rectification under paragraph (1) (violations shall be counted from the date on which such disposition is issued);

2. If a business entity fails to take measures for rectification;

3. If it is found impracticable to prevent consumer damage only by measures for rectification or impossible to compensate consumers for their loss.

(5) If a business entity falls under subparagraph 1 (including cases to which the aforesaid subparagraph shall apply mutatis mutandis pursuant to Article 29 (3)), the Fair Trade Commission or the competent Mayor/Do Governor shall revoke the registration of the business entity, while the Fair Trade Commission or the competent Mayor/Do Governor may revoke such registration, if a business entity falls under any of subparagraphs 2 through 4 (including cases to which the aforesaid subparagraph shall apply mutatis mutandis pursuant to Article 29 (3)), as prescribed by Presidential Decree:

1. If a business entity registers business under Article 13 (1) by fraud or other improper means;

2. If a business entity falls under a ground for disqualification under any subparagraph of Article 14;

3. If a contract for indemnity insurance against consumer damage or a similar contract is terminated;

4. If a business entity continues business during a period of business suspension.

Article 50-2(Consent resolutions) #

(1) A business entity or trade association currently under investigation or deliberation by the Fair Trade Commission (hereafter in this Article through Article 50-4 referred to as "applicant") may file an application for a consent resolution provided in paragraph (3) with the Fair Trade Commission for such purposes as voluntarily resolving unfair transactions, etc. resulting from an act subject to such investigation or deliberation (hereafter in this Article through Article 50-4 referred to as "relevant act"), remedying damage caused to consumers, and improving transaction practices; provided, the Fair Trade Commission shall proceed with the deliberation procedures under this Act without adopting a consent resolution, where an applicant withdraws his or her application before a consent resolution is adopted.

(2) Where an applicant files an application under paragraph (1), he or she shall do so in writing, stating the following matters:

1. Facts that specify the relevant act;

2. A scheme for correction necessary to restore competition practices by such means as suspension of the relevant act or reinstatement, or to actively improve transaction practices;

3. Any other scheme for correction necessary to remedy or prevent damage caused to consumers, other business entities, etc.

(3) Where the Fair Trade Commission deems that a scheme for correction specified in paragraph (2) 2 or 3 (hereinafter referred to as "scheme for correction") satisfies all of the following requirements after investigating facts with regard to the relevant act, it may suspend procedures for deliberation on the relevant act and adopt a consent resolution with the same purpose as the scheme for correction (hereinafter referred to as "consent resolution"). In such cases, the scheme for correction may be revised in consultation with the applicant:

1. The scheme for correction shall be in balance with corrective measures expected to be taken and other sanctions that can be imposed where the relevant act is found to violate this Act;

2. The scheme for correction shall be deemed appropriate to restore fair and free competition practices or transaction practices or to protect consumers, other business entities, etc.

(4) Any consent resolution adopted by the Fair Trade Commission does not mean that the relevant act is recognized as a violation of this Act, and no one shall assert that the relevant act violates this Act on the grounds that an applicant is issued a consent resolution.

[This Article Added on Jan. 4, 2022]

Article 50-3(Consent resolution procedures) #

(1) The Fair Trade Commission shall determine whether to commence the consent resolution procedures in overall consideration of the necessity for prompt measures and for direct compensation for damage to consumers, and other relevant matters.

(2) The Fair Trade Commission shall, before adopting a consent resolution, provide an opportunity for a person who has filed a report or any other interested party to present opinions by notifying them of the following matters, making a public announcement of such matters in the Official Gazette or on the website of the Fair Trade Commission, or using any other means, for a specified period of at least 30 days:

1. An outline of the relevant act;

2. A provision of applicable statutes or regulations;

3. A scheme for correction (referring to a revised scheme where such scheme for correction is revised under the latter part of Article 50-2 (3));

4. Other information that helps a person who has filed a report and any other interested party better understand the relevant act; provided, this shall not apply to any information that is inappropriate to be disclosed for the protection of trade secrets or privacy or for public interest.

(3) The Fair Trade Commission shall notify the heads of relevant administrative agencies of the matters under the subparagraphs of paragraph (2) and hear their opinions; provided, it shall have consultation with the Prosecutor General with respect to an act subject to Articles 58 through 64.

(4) Where the Fair Trade Commission adopts or revokes a consent resolution, such adoption or revocation shall be subject to deliberation and decision at a meeting classified under Article 59 of the Monopoly Regulation and Fair Trade Act.

(5) An applicant issued a consent resolution shall submit to the Fair Trade Commission a plan to comply with the consent resolution and the results of such compliance in accordance with the decision made under paragraph (4).

(6) The Fair Trade Commission may examine whether a plan for compliance submitted pursuant to paragraph (5) is complied with and may request an applicant issued a consent resolution to submit materials related to such compliance.

(7) The Fair Trade Commission may entrust the Mediation Agency or the Korea Consumer Agency established under Article 33 of the Framework Act on Consumers (hereinafter referred to as the "Consumer Agency") with the affairs regarding the management of compliance with consent resolutions, such as examining whether a plan for compliance is complied with under paragraph (6), as prescribed by Presidential Decree.

(8) The head of an institution entrusted under paragraph (7) shall quarterly report to the Fair Trade Commission on the current status of management of compliance, including a plan to comply with a consent resolution and the results of such compliance that are submitted by an applicant under paragraph (5); provided, upon receipt of a request by the Fair Trade Commission to report on the current status, he or she shall immediately comply with such request.

(9) Where an applicant who is issued a consent resolution is negligent in complying with such consent resolution or fails to comply with it, the head of an institution entrusted under paragraph (7) shall notify the Fair Trade Commission of such fact without delay.

(10) The Fair Trade Commission may determine and publicly notify methods for filing a written application under Article 50-2 (2), methods for seeking opinions, procedures for deliberation and decision, procedures for entrusting the Mediation Agency or the Consumer Agency with affairs regarding the management of compliance, and other detailed matters.

[This Article Added on Jan. 4, 2022]

Article 66(Administrative fines) #

(1) Any business entity or trade association shall be subject to an administrative fine not exceeding 30 million won for falling under subparagraph 1 or 2, and an administrative fine not exceeding 50 million won for falling under subparagraph 3; and any executive officer or employee of a business entity or trade association or any other interested person shall be subject to an administrative fine not exceeding five million won for falling under subparagraph 1 or 2, and an administrative fine not exceeding 10 million won for falling under subparagraph 3: <Added on Jun. 12, 2018; Dec. 29, 2020>

1. A person who fails to appear in person without good cause, among parties who have received a disposition of attendance under Article 81 (1) 1 of the Monopoly Regulation and Fair Trade Act that is applicable mutatis mutandis pursuant to Article 57 (2);

2. A person who fails to make a report or to submit necessary materials or articles under Article 81 (1) 3 or (6) of the Monopoly Regulation and Fair Trade Act that is applicable mutatis mutandis pursuant to Article 57 (2); or makes a false report or submits false materials or articles;

3. A person who refuses, interferes with, or evades any investigation conducted under Article 81 (2) and (3) of the Monopoly Regulation and Fair Trade Act that is applicable mutatis mutandis pursuant to Article 57 (2).

(2) Any of the following persons (including where any of the following shall apply mutatis mutandis pursuant to Article 29 (3)) shall be subject to an administrative fine not exceeding 10 million won: <Amended on Jun. 12, 2018>

1. A person who fails to refund the price for goods or services in violation of Article 9 or who fails to take measures necessary for refunding;

2. A person who commits any prohibited act prescribed in Article 11 (1) 6, 23 (1) 4, or 34 (1) 6;

3. A person who commits any prohibited act prescribed in Article 11 (1) 8, 23 (1) 6, or 34 (1) 8;

4. A person who fails to file a report in violation of Article 13 (2) or (3);

5. A person who fails to issue a certificate of registration to a multi-level marketing salesperson in accordance with Article 15 (3) or a pocketbook to a multi-level marketing salesperson in accordance with Article 15 (5);

6. A person who fails to keep a register of multi-level marketing salespersons, in violation of Article 15 (4) or who fails to allow a consumer to verify the identity of a multi-level marketing salesperson;

7. A person who commits any prohibited act prescribed in Article 23 (1) 10;

8. A person who bills an excessive amount for penalty or refuses to refund proceeds in violation of Article 32;

9. A person who makes a telemarketing call to a consumer, in violation of Article 42 (2);

10. Deleted; <Jun. 12, 2018>

11. Deleted; <Jun. 12, 2018>

12. Deleted. <Jun. 12, 2018>

(3) Any of the following persons (including where any of the following shall apply mutatis mutandis pursuant to Article 29 (3)) shall be subject to an administrative fine not exceeding five million won: <Amended on Jun. 12, 2018>

1. A person who fails to file a report in accordance with Article 5 (2) or (3) or files a false report;

2. A person who fails to keep a list of door-to-door or telemarketing salespersons in violation of Article 6 (1), a person who fails to allow a consumer to verify the identity of a door-to-door salesperson in violation of Article 6 (2), or a person who fails to state his or her name, etc. in violation of Article 6 (3);

3. A person who fails to issue a contract in accordance with Article 7 (2), 16, or 30 (2);

3-2. A person who fails to preserve matters relating to a contract out of the records of conversations for at least three months from the date of contract with a consumer's consent, in violation of Article 7-2 (1); or a person who fails to comply with a consumer's request for inspection of the records of conversations, in violation of Article 7-2 (2);

4. A person who amends the guidelines for calculation and payment of bonuses in violation of Article 20 (2);

5. A person who fails to allow a multi-level marketing salesperson to inspect details of calculation and payment of bonuses in violation of Article 20 (4);

6. A person who fails to notify a consumer of the expiry date of a contract in violation of Article 30 (3);

7. A person who fails to allow a consumer to inspect records of transactions of goods or services under Article 33.

(4) Any person who fails to comply with an order issued to maintain order, in violation of Article 66 of the Monopoly Regulation and Fair Trade Act, which shall apply mutatis mutandis pursuant to Article 57 (1), shall be subject to an administrative fine not exceeding one million won. <Amended on Jun. 12, 2018; Dec. 29, 2020>

(5) Administrative fines under paragraphs (1) through (4) shall be imposed and collected by each administrative authority; provided, administrative fines under the provisions relevant to multi-level marketing and door-to-door sales under sponsorship shall be imposed and collected by the Fair Trade Commission or a Mayor/Do Governor. <Amended on Jun. 12, 2018>

(6) The criteria for imposing administrative fines under paragraphs (1) through (4) shall be prescribed by Presidential Decree. <Amended on Jun. 12, 2018>

ACT ON DOOR-TO-DOOR SALES

Article 1(Purpose) #

Article 2(Definitions) #

Article 3(Scope of application) #

Article 4(Relationship to other statutes) #

Article 5(Reporting by door-to-door sales business entities) #

Article 6(Preparation of list of door-to-door or telemarketing salespersons) #

Article 7(Duty of door-to-door sellers or telemarketers to provide information to consumers) #

Article 7-2(Duty of telemarketing business entities to preserve records of conversations) #

Article 8(Withdrawal of subscription) #

Article 9(Effects of withdrawal of subscription) #

Article 10(Restrictions on claims for damages) #

Article 11(Prohibited Acts) #

Article 12(Handling of affairs by door-to-door sellers or telemarketers during business suspension) #

Article 13(Registration of multi-level marketing business entities) #

Article 14(Grounds for disqualification) #

Article 15(Multi-level marketing salespersons) #

Article 16(Duty of multi-level marketers to provide information to consumers) #

Article 17(Withdrawal of subscription) #

Article 18(Effects of withdrawal of subscription) #

Article 19(Restrictions on claims for damages) #

Article 20(Criteria for payment of bonuses) #

Article 21(Representation and advertisement regarding bonuses) #

Article 22(Registration and withdrawal of multi-level marketing salespersons) #

Article 23(Prohibited Acts) #

Article 24(Prohibition of speculative expansion of sales force) #

Article 25(Request for cessation of violation against consumers) #

Article 26(Handling of affairs during business suspension for multi-level marketing business entities) #

Article 27(Public announcement of change of address) #

Article 28(Responsibilities of multi-level marketing business entities) #

Article 29(Obligations of door-to-door sellers under sponsorship) #

Article 30(Duty of recurring or business-soliciting transaction business entities to provide information to consumers) #

Article 31(Termination of contracts) #

Article 32(Effects of termination or cancellation of contract and penalties) #

Article 33(Inspection of records of transactions) #

Article 34(Prohibited Acts) #

Article 35(Establishment of consumer protection guidelines) #

Article 36(Burden of proof on extraordinary sales business entities) #

Article 37(Contract for indemnity insurance against consumer damage) #

Article 38(Establishment of mutual-aid associations) #

Article 39(Supervision over mutual aid associations) #

Article 40(Business activities of mutual aid associations) #

Article 41(Subsidization of extraordinary sales consumer organizations) #

Article 42(System for registration of intention to reject telemarketing calls) #

Article 43(Investigation into violations) #

Article 43-2(Investigation into actual conditions) #

Article 44(Giving monetary awards) #

Article 44-2(Recovery of monetary awards) #

Article 45(Disclosure of information on unfair practices) #

Article 46(Fairness in evaluation and certification) #

Article 47(Reporting and supervision) #

Article 48(Recommendation to rectify violations) #

Article 49(Measures for rectification) #

Article 50(Request for mediation of disputes over consumer damage) #

Article 50-2(Consent resolutions) #

Article 50-3(Consent resolution procedures) #

Article 50-4(Revocation of consent resolutions) #

Article 50-5(Charges for compelling compliance) #

Article 51(Penalty surcharges) #

Article 52(Prohibition of contracts unfavorable to consumers) #

Article 53(Exclusive jurisdiction) #

Article 54(Registration of trade associations) #

Article 55(Prevention of misuse, abuse, and misappropriation of information on consumers) #

Article 56(Delegation or entrustment of authority) #

Article 57(Application mutatis mutandis of the Monopoly Regulation and Fair Trade Act) #

Article 58(Penalty provisions) #

Article 59(Penalty provisions) #

Article 60(Penalty provisions) #

Article 61(Penalty provisions) #

Article 62(Penalty provisions) #

Article 63(Penalty provisions) #

Article 64(Penalty provisions) #

Article 65(Joint penalty provisions) #

Article 66(Administrative fines) #

Article 67(Special Cases concerning Application of Provisions regarding Administrative Fines) #