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FTC orders postpartum care centers to revise 'unfair' refund policies

Published: 24 Sep. 2025, 16:24

Nurses and staff care for newborns at a postpartum care center in Seoul on the afternoon of Feb. 28, 2024. [JOINT PRESS CORPS]

Korea’s largest postpartum care centers can no longer bar refunds for early departures or avoid liability for infectious disease outbreaks after the Fair Trade Commission (FTC) moved to strike down what it called unfair contract terms.

The FTC announced Wednesday that it had reviewed the contracts of 52 major facilities and ordered changes to clauses that imposed steep penalties on mothers who canceled early while limiting the centers’ responsibilities.

One of the most common abuses involved refund policies. Many centers refused to return any fees if a customer checked out early for personal reasons. However, when the center itself was at fault, it refunded only the unused portion.

The revised rule requires centers to return the balance minus 10 percent of the total fee and the cost of services already used. If a mother or newborn must leave due to an unavoidable circumstance such as an infectious disease, no penalty can be charged. In cases where the center is responsible for termination, it must pay the customer an additional 10 percent of the total fee in compensation.

Deposit refunds have also been standardized. Previously, even if the business canceled, many centers returned only the deposit. Now, businesses must pay back twice the deposit if they cancel. If the customer cancels, the refund rate depends on how many days remain before the scheduled admission.

The commission also blocked clauses that let centers avoid liability for infections by arguing they were not medical institutions. Under the new terms, businesses must compensate customers if infections occur during their stay. Customers can prove damages with documents such as medical certificates or receipts.

Staff care for newborns at a public postpartum care center in Yanggu County, Gangwon, on Dec. 4, 2023. [YONHAP]

The FTC also ordered the removal of clauses that penalized customers for posting unfavorable comments on online communities or social media. Terms that shifted responsibility for lost or damaged personal items to clients, regardless of fault, were likewise struck down.

The FTC said the unfair clauses most frequently involved excessive penalties for cancellations or early terminations that reduced business liability, which it found at 33 centers. Another 37 centers had clauses that exempted them from responsibility for infection-related damages. Seven restricted customers from posting reviews or other comments online, while 25 refused to adjust fees when the expected delivery date changed. At 36 centers, terms exempted the business from responsibility for lost or damaged belongings.

An FTC official said the industry acknowledged the need to strengthen consumer protections and agreed to revise their contracts accordingly.

“We will provide training for smaller postpartum care centers and encourage voluntary improvements so these corrections can spread across the entire industry,” the official said.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY AHN HYO-SEONG [[email protected]]