A total of 42,000 borrowers have filed a collective suit against banks and other financial institutions to retrieve fees for registering collateral, becoming the largest-ever number of people to take such joint legal action.

The Korea Consumer Agency said on Tuesday that it filed a complaint on behalf of 42,000 people who requested a class-suit to retrieve collateral-fixing fees paid to a judicial scrivener for mortgage loans from banks.

About 1,500 financial institutions including banks, insurers and card companies will be subject to the suit, it said.

The Fair Trade Commission decided earlier this year that banks should refund the fees charged to mortgage loaners. It said that banks should return all fees and interest that occurred after July 2011 and 50 percent of the stamp tax. The suit covers the fees paid before July 2011.

The complainants said that the average money they lost was 539,000 won ($473) meaning that about 23 billion won will be refunded if they win the suit. It would be the largest amount awarded in a finance-related class suit.

An official at KCA expected that the suit will end within the year.

By Park Min-young  (claire@heraldcorp.com)