Koreans are dialing up debt

The Consumer Protection Board recently received a call from a college student. Delighted to have bought a cutting edge mobile phone, he said he enjoyed movies and comic strips through wireless Internet services, but his bill for next month was 1.3 million won ($1,130). Mobile phones are contributing to the nation’s problem of consumer debt. More than 3.5 million mobile subscribers were in arrears on their phone bills as of the end of June, 700,000 of which have joined the rolls of those Koreans labeled credit delinquents. Subscribers are not wholly responsible for the quagmire, say experts, who contend that mobile companies fail to properly inform customers of charges. According to the audit data that the Ministry of Information and Communication and mobile carriers submitted to Park Heon-kee, a lawmaker of the opposition Grand National Party, as of the end of June, 3.5 million people were overdue on mobile charges for at least two months. The total unpaid amount totaled 770 billion won. In the first half of this year, the number of people behind on mobile payments increased by 940,000, with total back payments of 130 billion won. Of the 3.5 million people past due on mobile accounts, 560,000 were listed as debt delinquents by the Federation of Korea Banks, about 17 percent of the nation’s 3.3 million credit delinquents. Another 140,000 people were separately reported to financial institutions by debt collectors for being behind on their accounts. Korea’s three local mobile carriers cut service when accounts are behind by two to five months. If users still cannot pay their bill after another three-month period, their service is terminated and the account handed over to debt collectors. If the charges are still uncollectible for three more months, and those charges exceed 300,000 won, the debt collector informs the federation and the client is labeled a delinquent. “The reason the number of people overdue on mobile charges is going up is that total calling time is rapidly increasing with the surge in additional services, such as wireless Internet,” said an industry official. The growth in the number of delinquents among young people is especially strong. During the first half of this year, the Consumer Protection Agency received 142 referrals in which people claimed they were damaged financially because of mobile charges. by Kweon Hyuk-joo