Seoul, South Korea – The Financial Supervisory Service (FSS) has ruled that it is legitimate for auto lease companies to charge customers depreciation fees at the end of a lease contract.
In its announcement on November 27th regarding the handling of major complaints and dispute resolution standards for the third quarter of 2024, the FSS clarified its stance on this issue.
According to the FSS, a consumer, Mr. A, filed a complaint, arguing that it was unfair for the auto lease company to arbitrarily calculate and charge depreciation fees at the end of the lease contract.
However, the FSS ruled in favor of the auto lease company, stating, "The Standard Terms and Conditions for Automobile Leasing stipulate that the customer may be charged for depreciation if the vehicle's value at the return time is lower than the expected value. Given that the auto lease company calculated and charged the depreciation fee according to the pre-notified depreciation standards, it is difficult to consider their actions as improper."
In addition to this ruling, the FSS also clarified the process for resuming individual health insurance after a group health insurance policy has ended. A consumer, Mr. B, had canceled his individual health insurance due to having group health insurance through his employer. After losing his job, he tried to resume his individual health insurance but was rejected because more than six months had passed since the cancellation.
The FSS upheld the insurance company's decision, explaining that "the Special Provisions for Suspension and Resumption of Health Insurance stipulate that a request to resume individual health insurance must be made within one month of the termination of the group health insurance policy." This regulation is designed to prevent moral hazard, such as individuals waiting until they become ill to resume their individual health insurance after canceling their group policy.
The FSS also provided information on other related issues, such as the exclusion of refunds from pharmaceutical companies under the risk-sharing program from health insurance coverage and the limited coverage of agricultural damage insurance as outlined in the policy terms.
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