Attorney Bang In-tae of Daeryun Law Firm explains the delay in settlement and refund of Timon and WeMakePrice.
2024-07-29
Small-value victims have an advantage in proceeding with class action lawsuits in court.
Sellers of high-value services or goods are more likely to pursue individual lawsuits.
On the 29th, Senior Attorney Bang In-tae of the Daeryun Corporate Legal Group at Daeryun Law Firm explained the delay in settlement and refund of Timon and WeMakePrice (damage amount: KRW 170 billion to KRW 1 trillion), payment structure, charges for each damage case, and the differences between class dispute mediation procedures and class lawsuits.
(Timon, WeMakePrice payment structure) Timon and WeMakePrice are mail order brokers and electronic payment agencies (PGs). When consumers pay for a product, the payment goes through the first PG company to the second PG company, and then the payment is finally paid to the seller. When a customer purchases goods or services from a mail order seller and pays with a credit card, the payment is transferred in the following order: [Customer → Card company → Electronic payment service provider (PG company) → Mail order seller]. Representative primary PG companies include Nice Information and Communication and KG Inicis.
However, in the case of Timon and WeMakePrice, in the fund transfer stage, the money is moved in the following order: [Customer → Card company → Electronic payment agency (primary PG company) → Timon, WeMakePrice (electronic payment agency = secondary PG company) → Mail order seller].
The reason that Timon and WeMakePrice intervened as secondary PG companies is because it is not easy for small businesses located on internet shopping mall platforms such as Timon to sign franchise contracts directly with primary PG companies. A structure has been established where Timon and WeMakePrice directly sign franchise contracts with primary PG companies, receive payment, and settle accounts (settlements) with small businesses. In other words, the payment agency itself is entrusted to the primary PG company, and Timon and WeMakePrice are the secondary PG companies, and the internet shopping mall platform handles the settlement of fees and payments on behalf of the store.
(Crimes by damage case) Consumers who have not received goods or services even after paying the purchase price = If the payment amount is completely transferred from the 1st PG to Timon or WeMakePrice, it appears that it will be possible to file a claim for return of unfair profits and damages for default against Timon and WeMakePrice.
Seller who supplied goods and services to the buyer but did not receive payment (settlement) = After receiving the consumer's subscription information from Timon and WeMakePrice, it appears that it will be possible to claim settlement money and default damages from Timon and WeMakePrice by proving that goods and services were properly supplied to the consumer in accordance with the Act on Consumer Protection in Electronic Commerce, etc.
Since the payment received by Timon and WeMakePrice from the primary PG is interpreted as being stored for the seller, if it was used for purposes other than settlement, it would likely constitute a crime of business embezzlement.
In the unlikely event that a consumer's subscription is delivered to the seller through an online platform without any intention to pay, knowing that payment will be impossible to the seller due to financial circumstances, and the seller supplies goods or services to the consumer, a crime of fraud may be committed.
(Difference between collective dispute mediation procedure and class lawsuit) The collective dispute mediation procedure is a relief procedure for collective damage conducted by the [Korea Consumer Protection Agency Consumer Dispute Mediation Committee] or the [Personal Information Protection Commission Personal Information Dispute Mediation Committee].
It is different from a lawsuit conducted by a court, and the mediation plan must be accepted by both parties to have the same effect as a court decision. A commonly referred to class action lawsuit is a multi-party lawsuit in legal terms, and in this case, it will be a lawsuit filed by multiple plaintiffs against Timon or WeMakePrice.
Attorney Bang In-tae explained, "The scale of the damage is large, the data is extensive, and the resulting compensation is expected to be considerable, so it seems necessary to proceed with a class action procedure by the court rather than an arbitrary group dispute mediation procedure." He added, "It is judged to be more advantageous in terms of convenience of proof and litigation economics for small victims to proceed as a class action lawsuit through the court, and for large-value service or goods sellers to proceed as an individual lawsuit."
Segye Ilbo -Timon and WeMakePrice unsettled amount “could exceed 1 trillion won”… Prosecutor’s ‘Legal Review’ (Shortcut)
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