South Korea’s financial regulator yesterday said that it would stamp out sales promotions of offshore retirement plans through unauthorised online channels such as social media, in an alert to consumers.
The Financial Supervisory Service (FSS) pledged to monitor such online sales activities, reported Yonhap News Agency.The alert was given as the online sales promotion of offshore life insurance schemes including retirement plans from outside Korea, such as from Hong Kong, has become widespread. The products are sold without a licence in Korea.According to the FSS, the schemes posted online promise consumers a 6-7% interest that compounds each year, a foreign currency arbitrage income, or up to 40-fold return by buying the insurance, which are all deemed illegal. The online posts also fail to explain that buyers of offshore insurance plans are not protected under the Insurance Business Act.The FSS added that a consumer who bought unauthorised foreign insurance products may be subject to a fine of up to KRW10m ($8,060).

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