Govt. cracks down on wedding industry

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Amid prolonged controversy over excessive fees and a lack of transparency in the wedding industry, the South Korean government said it has mandated changes to contract terms at 18 major wedding planning firms.

The Fair Trade Commission on Tuesday said it identified six types of unfair clauses in service agreements across 18 wedding planning companies that received the most consumer complaints over three months. These companies offer package weddings -- popular bundles consisting of pre-wedding studio photography, dress rentals and makeup, known here as “sudeme" -- which typically cost millions of won and come with hidden fees and various add-ons.

Under the change, the FTC ordered these wedding agencies to disclose prices for all elements of wedding packages, including any additional fees and cancellation charges.

Wedding planners typically disclosed only the prices of what it calls basic services, such as studio photography, dress rental and makeup, leading consumers to believe this was the final price tag. But in fact, there are often essential services billed separately later on, including original photo file purchases, dress fittings and early morning makeup services, among others -- costs that consumers are ultimately required to pay as part of the wedding preparation.

The FTC found that some agencies have up to 30 add-ons as optional, making it nearly impossible for consumers to gauge total costs or compare prices across providers.

The revised rule also addresses issues with excessive cancellation policies, which the FTC said weigh unreasonably on consumers. Specifically, some clauses require that 20 percent of the total price of a package wedding be paid as a deposit, which was nonrefundable under any circumstances if the contract is canceled. Under the new guidelines, the wedding planners must offer cancellation policies in compliance with the law and stipulate penalty fees based on the timing of service use.

Additional clauses that required consumers to waive agency liability in disputes with third-party vendors -- such as makeup salon, dress shop and photo studio -- were also deemed unfair and ordered to be removed. The new guideline also removed the clause that banned the transfer of contractual rights to another person in the event of a broken engagement.

Last year, 52.3 percent of newlyweds in South Korea used these wedding planning agency, spending an average of 2.5 million won ($1,776) to 3 million won, according to FTC.

An FTC survey conducted from September to October of 500 customers who used these wedding agencies found that 74 percent considered the add-on fees unreasonable. Couples reported spending an additional 1.44 million won ($1,022) beyond their initial budget due to hidden fees.

The antitrust regulator's crackdown come as part of South Korea’s broader efforts to tackle its low birthrate, which includes easing the financial burdens associated with marriage and parenthood. The FTC said it will check whether the amended terms are implemented at wedding agencies and will continue monitoring the industry to improve price transparency and establish standard terms.

By Ahn Sung-mi(sahn@heraldcorp.com)