Regulatory Action Against Yanadoo for Misleading Advertising
The Korea Fair Trade Commission (KFTC) has taken significant regulatory action against Yanadoo, a company operating online English lecture products. On the 4th, the KFTC announced that it had issued a corrective order and imposed a penalty of 5 million Korean won on Yanadoo for engaging in false advertising practices.
False Claims About Scholarships
According to the KFTC, Yanadoo has been running a scholarship program since May 2014, which offers financial support to course enrollees who complete lectures and submit reviews. However, the commission found that from December 2023, Yanadoo used misleading advertisements regarding the amount, number of recipients, and effectiveness of these scholarships.
One of the most notable instances was an advertisement displayed on the homepage’s initial screen from December 2023 to November 2024. The ad claimed, “Already surpassed 8.8 billion won! A whopping 160,000 people have received scholarships!” While Yanadoo provided evidence for the 8.8 billion won figure, it was revealed that the 160,000 recipients were not actual scholarship recipients but participants who attempted the program.
Furthermore, the calculation of the 8.8 billion won lacked proper explanation regarding the cumulative period and other criteria. The KFTC noted that consumers might have mistakenly believed that many enrollees recently attempted the program and received this amount of scholarships, rather than recognizing that the scholarships started being distributed in May 2014.
Misleading Completion Rate Claims
Another misleading claim by Yanadoo involved its assertion that “the completion rate of enrollees who attempted the scholarship program is three times higher compared to those who only took lectures.” This statement was advertised from December 2023 to May 2025. However, the KFTC discovered that this claim was based solely on the content of the Full Refund Scholarship, without considering other types of scholarships such as the 90-day Scholarship, 55-day Scholarship, and Full Refund Scholarship.
Legal Implications
The KFTC determined that Yanadoo’s actions violated Article 21 of the E-Commerce Act concerning consumer protection. As a result, the commission issued a corrective order, which includes a future prohibition order, and imposed a penalty of 5 million Korean won.
Summary of Key Issues
- Misleading Advertisement on Scholarship Amounts: Yanadoo falsely claimed that 160,000 people received scholarships, when in fact, these numbers referred to participants who attempted the program.
- Lack of Transparency in Calculations: The 8.8 billion won figure was presented without sufficient explanation regarding the cumulative period and other criteria.
- Inaccurate Completion Rate Claims: The completion rate comparison was based solely on one type of scholarship, leading to misleading information for consumers.
