Korean financial firms shamed for poor service

South Korea’s financial watchdog, The Financial Supervisory Service (FSS), has ordered 17 financial firms and their 3,000 branches to post an embarrassing “red notice” at their entrances to alert customers to their low customer service ratings.

The FSS said that the firms that received poor evaluations for settling customers’ complaints have to display notices printed in large red letters saying: “Fifth Rate (Poor Service),” The notices must also go on their websites.

The ratings, ranging from “first” to “fifth,” are based on the number of complaints compared to the size of the firms and their efforts to improve services.

Those with the lowest ratings are protesting, saying that it is too harsh. However, the FSS said that they did not follow instructions to post their ratings on their homepages, and thus it is forcing them to notify their customers.

The FSS announced the customer service ratings in April after reviewing 85 firms, including banks, credit card companies and securities companies, nationwide.

The institutions with the lowest ratings are to post them at the entrances to all their branches for three months.

The institutions with the largest number of branches nationwide are complaining that the notice makes them look like they have a credit problem.

In addition, they also pointed out that the FSS did not notify them before implementation. “If the new measure is to be introduced, the authorities should have informed us beforehand. But without prior warning, the extreme measure is too harsh and does nothing but kill us if we don’t meet standards,” an official from a financial firm said.

They are also raising questions about the fairness of the evaluation standards, saying basing the rating on the number of complaints to the total assets is unfavourable to small firms.

In addition, comparing provincial banks to commercial banks is also unfair, they said.

“We’ve applied a ‘name and shame’ principle to them because some firms have not shown any improvement in settling their complaints for years,” an FSS official said.

Some firms are making efforts to reduce their customer complaints, such as conducting workshops for employees on how to improve customer service, a topic widely neglected in Korea.

“We need to improve customer service to reduce the number of the customer complaints, but it is desirable to oversee them with more rational measures rather than this extreme one,” an official from a credit card firm said.
 

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