In a case where a customer intends to enter into new financial transactions with a bank
such as opening deposit accounts or installment savings account and subscribing to investment
products like a mutual fund, traditionally the customer would visit the bank’s branch and go
through the face-to-face counseling process with a bank staff. Nowadays, however, the bank’s
business activities outside its premises have been constantly being vitalized as a result of the
innovation of IT development, gradual decrease of the number of customers visiting branches
in person, increasing needs of customers for the bank’s proactive service by way of visiting
the customers and the requirement for the bank to secure a new sales channel.
Nevertheless, according to the current Door-to-Door Sales Act(“DDSA”) and the relevant
authoritative ruling of the Fair Trade Commission in charge the DDSA, it is highly unlikely not
to apply the DDSA to the bank’s business activities outside its premises (e.g. soliciting financial
products or initiating financial transactions with customers and the like). As a consequence,
the banks are forced to cut down on their business activities outside the premises, and it is
practically impossible to solicit financial investment products due to the concern arising from
the right to withdraw. As such, the DDSA which originally meant to secure customers’ rights
and interests, has resulted in not only unreasonably restricting the bank’s normal business
activities but also hindering the benefits and needs of the customers who are willing to initiate
financial transactions with a bank without paying a visit to the branch in person.
Even from a standpoint of comparative laws, not a few jurisdictions like the EU, Germany,
Japan, etc. have given special treatment to financial services specifically carving financial
services out of the purview of the door-to-door sales legislation or restricting a customer from
exercising the right to withdraw relating to financial products in the nature of investment
securities. Besides, other laws for consumer protection such as the Installment Transactions Act,
the Act on the Consumer Protection in the E-Commerce other than the DDSA in our
jurisdiction, have explicitly codified an exception that financial investment products are not
subject to those acts. On top of this, the relevant laws (e.g. the Banking Act or the Capital
Market and Financial Investment Services Act, etc.) have multi-layered measures for protecting
financial customers transacting with a bank so that there would be no legislative loopholes as
to customers’ rights and interests even without applying the DDSA.
I have an opinion that it is required to address the above-mentioned legal concerns by way
of clearly excluding all kinds of financial products being offered by banks out of the purview
of the DDSA.
This article aims to review relevant issues caused by applying the DDSA to bank’s business
activities outside its business premises and present legal alternatives to solve the issues.