Overseas shopping site shuts down, card refund takes months — FSS warns consumers

The Financial Supervisory Service on Tuesday issued guidance on key precautions consumers should take when using credit cards, drawing on major financial complaint cases.

Credit card-related complaints totaled 12,661 last year, roughly double the 6,720 recorded in 2022, according to the FSS. The regulator attributed the surge to a sharp rise in the cumulative number of credit cards issued, and said it was sharing key consumer advisories covering card issuance, use and cancellation.

When disputes or fraud arise from overseas card use, the FSS said, the process runs through international card brands such as Visa and Mastercard via the issuing card company and can take a long time. Consumers should take preventive steps by using the overseas-use safety lock setting and the card payment notification service.

When filing a dispute, consumers should gather thorough supporting documentation — including links to the closed overseas site, advertising screens, order histories, receipts, and email or chat records with the seller — and submit the claim within 90 to 120 days of the transaction date or the date the charge slip was received.

The FSS also said that when a discontinued card is replaced, consumers have the right to refuse the replacement card proposed by the issuer if it does not suit their needs.

When a discontinued card approaches its expiration date, issuers may send a replacement after notifying the cardholder at least one month in advance. Notification must be provided through at least two channels — such as written notice, phone call, text message or email. Consumers who do not want the replacement should review its terms and benefits and notify the issuer of their refusal within 20 days.

The FSS added that when a card is reissued, automatic payment arrangements linked to the old card may not carry over, so consumers should confirm whether such transfers have gone through to avoid unexpected late payments.

The FSS also urged consumers to use revolving credit with caution.

Revolving credit allows consumers to pay only a portion of their monthly balance, while the carried-over remainder accrues high interest — averaging 15.1 to 18.3 percent as of the end of May. The FSS said that while revolving credit provides temporary liquidity, indiscriminate use can create a risk of insolvency, and consumers should minimize their reliance on it.

The FSS said consumers should be aware that revolving credit is not a mandatory enrollment when applying for a card, that unpaid balances accumulate month after month causing principal and fee burdens to grow rapidly, and that prolonged use can negatively affect credit scores.

The FSS also said that annual fees are in principle refunded on a pro-rated daily basis when a card is canceled, but that the base annual fee for the first year is non-refundable due to costs associated with card issuance.

The regulator added that premium cards, which have grown increasingly popular, can carry base annual fees of hundreds of thousands of won depending on the card, owing to specialty materials and high-end packaging. Consumers should carefully consider whether a card is truly necessary before applying.