On Feb. 1, SK FSC announced plan to integrate financial-telecom debt.
SK FSC, SK ICT, Ministry of Science, Credit Counseling and Recovery Service launched plan to provide integrated financial-telecom debt adjustment service to debtors.
Follows SK FSC Jan. 2024 attend meeting on credit recovery support, see #197656.
Background
When telecom debt is delinquent, use of telecommunication services such as phone calls/SMS is restricted, which in turn affects economic activities such as job seeking.
Because of this, telecom debt is generally repaid with priority over financial debt.
Integrated Debt Adjustment
Credit Counseling and Recovery Service (CCRS) will offer a one-stop debt workout service for debtor's financial debts and missed payments on their mobile phone bills.
The method and extent of debt adjustment will depend on debtor’s income situation.
CCRS is coordinating with telecommunications businesses to reach a final agreement.
Once agreement is in place, authorities will work on rule changes and system upgrade.
Telecom companies expected to join in Q1 2024, for implementation in Q2 2024.
May 2024 SK FSS Integrated Inquiry Service
On May 28, 2024, SK FSS announced the launch of an integrated inquiry service for financial and telecom debts via the Korea Credit Information Services' Credit4u.
Starting from May 29, consumers can check information on telecom debts, companies, as well as financial debts including loans, bank accounts/cards, and overdue amounts.
SK FSS said that telecommunication debt would be also subject to the Credit Recovery Committee's debt restructuring, and that a service that develops a personal credit rating model based on telecommunication information would be launched in the future.
Jun. 2024 Support Measures
On Jun. 20, 2024, SK FSC and SK ICT announced measures to support the resurgence of vulnerable groups in financial and telecommunication sectors during a meeting.
Integrated financial-telecom debt adjustment will be conducted from Jun. 21, 2024 by the CCRS, which enables up to 90% reduction of the principle, long-term installments.
Where debtors have faithfully repaid their adjusted debts for more than 3 months, they can reuse telecommunication services even before paying all of their debts.
However, where they fail to pay repayment amount for more than 3 months after debt adjustment, the adjustment is canceled, instead the original repayment duty arises.
The CCRS will provide support, including linkage to employment support systems and welfare systems, as well as customized counseling for each stage of debt adjustment.
Will implement three-stage review comprised of asset investigation, deliberation, and a creditor's consent, and suspend the effect of debt restructuring where a debtor's misconduct is identified even after debt adjustment, to prevent moral hazards.
SK FSC, SK ICT will monitor the implementation status, identify necessary measures.
In Sep. 2024, SK FSS issued improvements to creditor inquiry system, see #227359.
Oct. 2024 SK FSS Debt Collection
On Oct. 10, 2024, SK FSS announced that SK Telecom, KT, LG U+ will not collect telecoms fees under KRW 300k that have been in arrears for over three years.
This policy is irrespective of whether statute of limitations for these debts has expired.
Applies to both individuals and sole proprietors; covers mobile phone charges, landline services, and other services; cumulative amount must be under KRW 300k.
The telecommunications companies will not pursue direct collection or delegate collection activities for these debts; sale of such debts is also prohibited.
Debt restructuring will be available for those with financial, telecommunications debts.
SK Telecom will implement this on Dec. 1, 2024; KT, LG U+ will follow by end of Dec.
