Overpricing becomes more prevalent in Korea, raising concerns about trust

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Overpricing practices have become more prevalent in South Korea, not only in tourism spots such as traditional markets and city centers but also in areas that form the foundation of the country’s economy.

Experts analyze that this phenomenon should be seen not merely as an issue arising from the individual desires of merchants but as a facet of a distrustful society. They point out that as social trust has collapsed, various crimes and deviant behaviors of deceiving and being deceived have increased.

“This is a result of actions taken because sellers and buyers do not perceive themselves as members of a community,” said Kim Yun-tae, a sociology professor at Korea University. “It serves as proof that social trust in Korea is low.”

The overpricing practices witnessed nowadays raise concern because they involve deception in transactions, with buyers being deceived into paying excessively high prices for something. Broadly speaking, various fraudulent crimes that have recently shaken Korean society, such as real estate scams, stock price manipulation, and voice phishing, all fall into the category of overpricing, except that they are criminal offenses, whereas overpricing is not.

The seriousness of these practices lies in the fact that they undermine the trust among members, which is the foundation of a free-market economy.

The prevalence of such “trust-destroying” crimes is also on the rise. According to the National Police Agency, the accumulated number of real estate fraud scams resolved this year had reached 862 as of July 16. This figure is more than double the total cases resolved during the entire year of 2022, which was 387 cases. Compared to 187 cases in 2021, it has increased over fourfold.

“Fraud is the most prevalent crime in Korea,” said Gong Jung-sik, criminal psychology professor at Kyonggi University. “This reflects a characteristic of the distrustful society where members do not trust the society.”

The lack of trust in society is also evidenced by numbers. According to the Legatum Prosperity Index 2023 announced by the British think tank Legatum Institute, Korea’s social capital index ranks 107th in the world based on economic and socio-economic factors.

In overall rankings, Korea stands at 29th. Although economically wealthy, Korea lags far behind in community indices such as trust and solidarity. Despite being among the world’s top 10 advanced economies in terms of the size of the economy, Korea falls significantly short in terms of social trust.