Fair Trade Commission Identifies 8 Types of Unfair Terms in K-Pop Fan Club Memberships; 24 Companies Agree to Self-Correction

The Fair Trade Commission detected 8 types of unfair clauses in the paid membership terms of 24 businesses, including 18 major entertainment companies such as SM Entertainment, JYP Entertainment, YG Entertainment, and Big Hit Music, along with 6 fan platform operators. All of the companies identified violated the regulations agreed to voluntarily correct their terms.

The most serious issue was unfair refund restrictions. Big Hit Music specified that refunds were not possible if more than 7 days had passed since registration or if members had utilized any benefits. Starship Entertainment also set a 7-day cancellation period starting from the day after payment, prohibiting refunds even if only partial benefits were received. The Fair Trade Commission pointed out that membership service benefits are often tied to artists’ activities, making it difficult to quantify them, and that the benefits available can vary depending on when a member signs up.

Clauses that improperly exempted companies from liability were another problem. SM Entertainment stipulated that if payment was canceled after renewal, the remaining valid period of the existing membership would not be restored. YG Entertainment denied refunds due to artists’ departures or replacements, claiming no fault lay with the company. Companies such as Kakao Entertainment and CJ E&M included provisions stating they would not be responsible for service disruptions or damages caused by third-party unauthorized access.

Terms regarding service suspension also required improvement. Antenna and Weverse Company used vague expressions like “for business reasons” to justify suspending services, while Blue Garage allowed contract termination under ambiguous grounds such as “reasonable judgment.” Normus explicitly stated that contracts could be terminated without prior notice.

Following the Fair Trade Commission’s findings, full refunds will now be available if there is no usage within 7 days of registration. For accounts that exceed 7 days or have used some services, refunds will be processed after deducting a penalty fee (typically 10% of the membership fee) and the amount already used. Reasons for service suspension or changes will be specified more clearly, such as business closure, sale of operations, or expiration of exclusive contracts.

Paid memberships currently range in price from under 10,000 won to under 50,000 won. These businesses plan to revise their refund-related terms within this year and address the other identified issues at the earliest possible time.

Go-eun, head of the Commission’s Special Transactions Division for Terms, stated, “As the K-Pop market expands globally, we proactively examined the unfair terms in fan club membership services. This initiative will serve as a crucial step in protecting consumer rights within the industry and establishing a fair and transparent trading order commensurate with the scale of K-Pop fandoms.”