South Korean consumers are grappling with inconvenient cancellation processes and limited refund policies in the country’s burgeoning video streaming market. (Image courtesy of Pexels)
SEOUL, Oct. 9 (Korea Bizwire) – South Korean consumers are grappling with inconvenient cancellation processes and limited refund policies in the country’s burgeoning video streaming market, according to a recent government investigation.
The Korea Consumer Agency and Democratic Party lawmaker Min Byoung-dug released findings on October 8 from their joint study of six major streaming providers, including YouTube, Netflix, TVING, Coupang Play, Wavve, and Disney+.
The investigation, conducted from February to June, revealed several practices that potentially infringe on consumer rights.
While these streaming services allow online cancellations, they often fail to properly inform users about immediate mid-term cancellations and refund options for unused portions of subscriptions.
Instead, when consumers cancel online, services typically continue until the next billing cycle without offering refunds.
To receive refunds for unused time, consumers must navigate separate procedures, such as phone or chat consultations. Netflix, notably, does not offer mid-term cancellations or refunds after seven days from the billing date, according to its terms of service.
The Fair Trade Commission has already launched an investigation into streaming providers’ practices of hindering mid-term subscription cancellations.
An analysis of 1,166 consumer complaints filed with the 1372 Consumer Consultation Center over the past three years revealed that 47% were related to contract termination, cancellation, and penalty fees. Another 28.9% involved unauthorized charges or duplicate subscription fees.
The investigation also uncovered issues with refund policies for overpayments, with three providers lacking clear terms for refund methods and procedures. Some companies limit refunds to a six-month period, citing system limitations in tracking viewing history.
Four providers failed to provide specific compensation guidelines for service interruptions or outages.
A survey of 1,200 adult streaming service users found that respondents use an average of 2.4 paid services, spending about 20,348 won monthly. Approximately 40.8% of respondents reported sharing accounts, primarily with family members.
The Consumer Agency also criticized YouTube for offering student memberships and family plans in other countries but limiting South Korean consumers to a single “Premium” plan, calling for expanded options in the domestic market.
Based on these findings, the agency recommended that streaming providers strengthen mid-term cancellation rights and related notifications, ensure refunds for overpayments, clarify consumer compensation standards, and consider introducing discounted plans.
Min pledged to “continue efforts to create a consumer-friendly digital content market.”
Kevin Lee (kevinlee@koreabizwire.com)
