Victims of TMON and WeMakePrice's large-scale payment delays stage a picket protest in front of TMON's headquarters in Seoul, Aug. 13, 2024. Korea Times file

The majority of travel agencies have rejected a collective mediation proposal for victims of large-scale payment delays to vendors by cash-strapped TMON and WeMakePrice. As a result, only 48 out of 122 companies have accepted the refund settlement, according to the Korea Consumer Agency (KCA), Wednesday.

The KCA estimates that only 1.6 billion won ($1.1 million) of the total 13.5 billion won in damages will be refunded to affected customers. In response, the agency plans to assist victims who have not received refunds in filing a class-action lawsuit.

In late July of last year, the two Korean affiliates of the Singapore-based e-commerce platform Qoo10 filed for corporate rehabilitation with the bankruptcy court due to liquidity problems, which led to massive delays in payments to vendors and refunds to customers.

According to the Ministry of Economy and Finance, the final tally showed that the unsettled payment amount from these two online marketplaces reached 1.3 trillion won, affecting approximately 48,000 businesses.

In December, the KCA announced a collective settlement proposal for victims of travel and accommodation product purchases related to this incident. The plan recommended that travel agencies and payment gateway companies refund victims in solidarity with TMON and WeMakePrice, covering up to 90 percent and 30 percent of the amount, respectively.

Following this decision, the two e-commerce platforms expressed their intention to accept the recommendation. Among the 106 travel agencies, 42 accepted the settlement, while four out of 14 payment gateway companies also agreed. As a result, a total of 48 out of 122 businesses, or 39.3 percent, accepted the proposal.

The four payment gateway firms that accepted the settlement were Hecto Financial, Kakao Pay, Viva Republica and Naver Financial.

A total of 8,054 consumers who purchased travel and accommodation products through the two e-commerce platforms have been waiting for refunds amounting to 13.5 billion won, following the firms' liquidity crunch.

Of them, 1,745 consumers who had contracts with travel agencies and payment gateway companies that accepted the settlement will be eligible for compensation, totaling approximately 1.6 billion won.

"Since the majority of travel agencies and payment gateway companies did not accept the settlement decision, the recovery of consumer damages remained largely insufficient," a KCA official said. "We will provide support for a collective consumer lawsuit to protect the rights of applicants whose settlements were not reached."

Victims can apply for litigation support on the agency's website for one month starting next Monday.