[Exclusive] Yanolja suspends its policy of ‘no refunds after 10 minutes of reservation’… Court: “Give a full refund”

Cancellation request 2 hours after booking a hotel accommodation
Yanolja informs that ‘refunds will not be given after 10 minutes’
Despite the decision to recommend reconciliation, ‘refund half of the accommodation fee’
Both sides refused, leading to a formal trial.
1st trial “Unfair terms and conditions unfavorable to customers are invalid”

A court ruled that the terms and conditions of an accommodation reservation platform that stipulate that refunds are not possible unless cancellation is made within 10 minutes after completing the reservation are unfair and invalid. The court ruled that even if an accommodation reservation platform is simply a mail order intermediary, legal liability can be recognized if it sets refund regulations that are unfairly disadvantageous to consumers.

According to the legal community on the 13th, Chief Judge Ha Hyeon-guk of the Civil Division 1002 of the Seoul Central District Court ruled in favor of the plaintiff on the 11th in a lawsuit filed by Consumer A against the accommodation reservation platform ‘Yanolja’ seeking refund of unfair profits. The court sentenced Yanolja and other defendants to refund the entire lodging fee to Mr. A.

Mr. A reserved a hotel accommodation worth about 660,000 won through the Yanolja app in 2023 and requested cancellation of the reservation about 2 hours later. However, Yanolja rejected this based on refund regulations. The refund policy includes the following: ‘Reservations can only be canceled within 10 minutes, and if it exceeds 10 minutes, a cancellation fee equivalent to 100% of the reservation fee will be incurred.’

The hotel that sold accommodation products through the Yanolja app also did not accept Mr. A's request for a refund. The hotel claimed that since the reservation was made through an accommodation platform rather than the hotel's official website, it was not the party that entered into the reservation contract directly and had no right to cancel and no responsibility for a refund.

Accordingly, Mr. A filed a lawsuit in this case. During the trial, Mr. A argued that Yanolja's regulations regarding refund penalties were invalid as they violated the Electronic Commerce Act and the Terms and Conditions Act. Article 17 of the Electronic Commerce Act stipulates that ‘Consumers who purchase goods, etc. from a mail order seller may withdraw their subscription within 7 days from the date of receiving a written letter regarding the contents of the contract.’ Additionally, Article 6 of the Terms and Conditions Act stipulates that ‘provisions that are unfavorable to the customer are presumed to have lost fairness and are invalidated.’

However, Yanolja countered by saying, ‘We are not responsible for refunds as we are only a mail order intermediary and not a mail order seller, so we cannot be considered subject to the law.’

The first trial court accepted Mr. A’s argument and ruled in favor of the plaintiff. Chief Judge Ha said, “It is reasonable to assume that ‘Noluniverse,’ which merged with Yanolja, is a mail-order seller or a mail-order intermediary,” and added, “The refund policy in this case is invalid as it constitutes unfair terms and conditions that are unfairly disadvantageous to customers.”

Regarding the hotel, he added, “The hotel claims that it is neither the counterpart of Mr. A’s reservation nor the person who received the payment from Mr. A, but according to the evidence, the hotel acknowledges that it has received a certain percentage of payment from Nol Universe every month.” He added, “It falls under ‘a person who received payment from the consumer’ as defined in Article 18, Paragraph 2 of the Electronic Commerce Act.”

Previously, in November of last year, the court decided to recommend reconciliation, saying, ‘The defendants should join together and pay half of the lodging fee to Mr. A.’ However, both sides refused, leading to a formal trial.

Daeryun Law Firm, which represented Mr. A, said, “We would like to express our gratitude to the court for ruling that Yanolja’s cancellation fee agreement was unfair,” and added, “We expect that this ruling will serve as an opportunity to put the brakes on some unfair refund regulations, such as those of online lodging platforms.”

Reporter Park Min-ki (mkp@mk.co.kr)

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