FTC sets guidelines on wedding cancellations

Due to mounting complaints from consumers, the country’s antitrust agency is tightening scrutiny on wedding halls in Seoul.

And the Fair Trade Commission said yesterday it is unfair to impose exorbitant cancellation charges on consumers if they revoke their contracts several months before the planned wedding day.

“Customers should be able to get 100 percent refunds if they cancel their contracts two months earlier than planned dates,” the commission said in a statement. “They should only pay a maximum of 20 percent of the total expected cost if they cancel contracts in less than 60 days.”

If they cancel within a month, the FTC said, they should pay 30 percent. If they cancel within a week, they should pay 40 percent.

A total of 1,490 complaints were filed about unfair practices of wedding halls to the Korea Consumer Agency last year, including refusals to give refunds, high cancellation charges and nonfulfillment of contract terms. The complaints jumped from around 1,000 in 2010.

Couples usually pay 10 percent of the total cost as a down payment for a wedding. Some expensive halls demand more than 2 million won ($1,835) as a down payment and charge 30 percent of the total wedding cost if the contract is canceled even more than two months before the date, according to the agency.

A 28-year-old consumer surnamed Kim was told by a wedding hall to pay 2.6 million won as a penalty when she canceled her contract a month before than the wedding date, the agency said.

“It seems unfair to demand too much of a penalty because you don’t know what will happen while preparing for a wedding,” Kim said. “Lots of couples break up a few months before their weddings.”

The FTC investigated 21 wedding halls in Seoul last week. Ten of them - including the Seoul Wedding Center in Samseong-dong and the KW Convention Center in Seocho-dong in southern Seoul and the AW Convention Center in Buam-dong, central Seoul - voluntarily reported their penalty policies.

The FTC said it will start inspecting 18 five-star hotels to see whether similar practices were taking place.

“According to documents submitted by the 10 businesses, they can prevent losses even if consumers cancel contracts 10 days before because they normally start preparing for a wedding ceremony seven days before the planned date,” the FTC said. “Therefore, refusing to refund or demanding high penalties two months ahead are considered unfair practices.”

“The commission will expand the investigation to wedding halls in other cities to root out the unfair penalty system,” said Lee Yoo-tae, a director at the consumer policy bureau of the commission.

By Song Su-hyun [ssh@joongang.co.kr]