The Financial Supersory service will implement consumer-initiated inquiries in the coming weeks, officials said Thursday.

Over the past two months under initiative of Governor Choi Soo-hyun, the FSS has mapped out details of the system, under which consumers are entitled to request the regulator to conduct probes into financial firms.

“We will soon unveil measures to effectively introduce the system,” an official said. “Its implementation date will also be publicized as soon as a deliberative board for consumer-led probes launches later this month.”

He said a consumer group composed of at least 200 individuals would be allowed to call for the FSS to look into a financial firm ― as a class action-like petition against companies including banks, brokerage firms, credit card issuers and insurance firms.

The coming board, which comprises regulatory officials and lawyers, will carry out preliminary reviews to accept or reject consumers’ proposals.

Lenders drawing frequent complaints are expected to face consumer-originated probes. The new regulatory policy reflects Gov. Choi’s strong commitment to bolstering the protection of consumers as the number of irregular business practices has continued to grow in the financial sector.

“As well as financial authorities, it is necessary for consumers to have the right to look into financial firms (engaging in unfair practices) by requesting an FSS probe,” Choi has said.

For the credit card sector, disputes between card issuers and their customers included voice-phishing scams and the lenders’ blackmailing of delinquent borrowers.

Hana SK Card and KB Kookmin Card ranked at the bottom in the credit card industry in the yearly assessment from the FSS on financial firms’ consumer protection, which was unveiled in late April.

As for the other financial sectors, Kiwoom Securities in the brokerage industry and AIG Korea (formerly Chartis or AHA Korea) in the nonlife insurance industry were given the lowest grade of class 5 for the 10th consecutive year.

In the banking sector, as some of their irregular lending pressuring borrowers to buy other financial products in exchange for issuing loans, many borrowers saw losses from investing in high-risk funds or suffered from the burden of paying unnecessary insurance premiums.

Last year, financial authorities levied penalties on several banks for habitual irregular loan issuances which created hardships for borrowers.

Among the alleged rule-violators were Citibank Korea, Standard Chartered Bank Korea, Hana, Shinhan, Woori, the Industrial Bank of Korea, Nonghyup Bank and the National Federation of Fisheries Cooperatives (Suhyup).

In the FSS assessment result last month, Citibank Korea, Standard Chartered Bank Korea and Nonghyup Bank ranked at the bottom (class 5) out of 15 commercial banks.

By Kim Yon-se (kys@heraldcorp.com)