Financial Product Mis-selling Damages Calculator

What is the Financial Product Mis-selling Damages Calculator?

This calculator estimates how much compensation an investor may recover when a bank, securities firm, or insurer breaches Korea’s sales-conduct rules — the suitability principle, the appropriateness principle, the duty to explain, or the ban on improper solicitation — and causes a loss through mis-selling.
It is designed for disputes such as the DLF (derivative-linked fund) crisis, the Lime and Optimus private-fund scandals, and ELS or DLS principal-loss cases where mis-selling was the central issue.

The loss amount follows the statutory presumption in Article 48(2) of the Korean Capital Markets Act (total amount paid minus total amount recovered), and the compensation ratio reflects the comparative-negligence method used by the Financial Supervisory Service (FSS) dispute mediation committee and the courts (a base ratio adjusted by aggravating and mitigating factors).
By changing the inputs you can also compare which remedy — withdrawal of subscription, termination of an illegal contract, dispute mediation, or litigation — is most advantageous.

Korea-specific disclaimer: This calculator is based entirely on Korean law as of 2026 — specifically the Financial Consumer Protection Act (Arts. 17, 18, 19, 20, 21, 44, 46, 47), the Capital Markets Act (Art. 48), and the Civil Act (Arts. 109, 110, 379).
It provides a reference estimate only and does not replace legal advice from a Korean attorney. The final compensation ratio is decided case by case by the FSS dispute mediation committee or the courts.

Who is this for?

• Investors who lost principal in a fund, ELS, or DLF and believe the seller’s explanation was inadequate
• Elderly or first-time investors who were sold high-risk products unsuited to their profile
• Victims of Lime or Optimus-style private funds considering compensation or contract cancellation
• Anyone who wants to estimate a likely payout before filing for financial dispute mediation
• People checking whether the subscription-withdrawal window is still open or an illegal-contract termination is possible
• Anyone comparing whether mediation or litigation offers the greater net benefit

What is Mis-selling?

Mis-selling occurs when a financial company fails to properly disclose a product’s risks and key terms, or recommends a product unsuited to the consumer.
The Financial Consumer Protection Act (in force since 2021 and current through 2026) sets out sales-conduct rules; a breach triggers liability for damages under Article 44.

Suitability Principle (Article 17)

The seller must assess the consumer’s investment profile, financial situation, and experience, and must not recommend a product that does not suit them.
Recommending an ultra-high-risk derivative to a conservative client breaches this principle.

Appropriateness Principle (Article 18)

Even when the consumer applies without being solicited, the seller must warn that a product is inappropriate and obtain confirmation.
Skipping this step breaches the appropriateness principle.

Duty to Explain (Article 19) — The Strongest Weapon

The seller must explain key facts — the possibility of principal loss, fees, early-redemption conditions — in a way the consumer can understand, and provide a written statement.
Giving false or distorted explanations (including asserting uncertain matters as definite) or omitting key facts is a breach.

Reversed Burden of Proof (Article 44(2))

When a breach of the duty to explain causes loss, the seller is liable unless it proves it had no intent or negligence.
Because the consumer does not have to prove each element of the seller’s fault, this is the most favorable provision in practice.

Improper Solicitation (Art. 21) and Unfair Business Conduct (Art. 20)

Presenting uncertain matters as certain, or providing definitive judgments about returns, is prohibited as improper solicitation.
Forcing a product purchase as a condition of a loan (so-called tying) is unfair business conduct.

How is the Compensation Calculated?

Step 1 · Loss Amount (Capital Markets Act Art. 48(2))

The loss is presumed to be the total amount paid to acquire the product minus the total amount recovered through disposal, redemption, or liquidation distributions.
For example, if 100 million won was invested and nothing was returned, the loss is 100 million won; if 30 million won was invested and 12 million won redeemed, the loss is 18 million won.

Step 2 · Compensation Ratio (Comparative Negligence)

Not all of the loss is compensated.
Courts and the dispute mediation committee apply comparative negligence because the investor also bears some responsibility, and the result is the compensation ratio.

• Base ratio: set by the combination of breaches. In the DLF crisis, where the suitability principle and the duty to explain were both breached, the base ratio was 30%.
• Aggravating factors: elderly consumers, no investment experience, weak internal controls at the seller’s head office, or poor post-sale monitoring push the ratio up.
• Mitigating factors: extensive investment experience, financial expertise, prior investment in the same product, or a hand-signed confirmation push the ratio down.

In practice the final ratio usually falls between 20% and 80%.
This calculator also shows a band of the final ratio plus or minus 10 percentage points to convey the uncertainty of the estimate.

Contract Cancellation Means 100% of Principal

If cancellation for mistake (Civil Act Art. 109) or fraud (Civil Act Art. 110) is recognized, the full principal is returned as unjust enrichment without any comparative-negligence reduction.
This was granted in some Lime and Optimus cases where the product structure itself was misrepresented, but the threshold for cancellation is high.

Delay Interest (Optional)

If payment of the compensation is delayed, delay interest can be added.
Before litigation the civil rate of 5% per year applies; from the day after the complaint is served, 12% per year applies under the Act on Special Cases Concerning the Expedition of Legal Proceedings.

How to Use

Step 1: Enter principal and recovered amount

Enter the total paid for the product and any amount already returned; the loss is calculated automatically.
Leave the recovered amount at zero if nothing has been returned yet.

Step 2: Select product type and breaches

Choose the product type (private fund, ELS, DLF, and so on) and select every rule the seller breached.
The product type determines whether subscription withdrawal is available.

Step 3: Check aggravating and mitigating factors

Select aggravating factors such as old age, no experience, or weak internal controls, and mitigating factors such as experience or expertise.
The compensation ratio adjusts in real time.

Step 4: Review the result and remedies

Review the estimated compensation and the ratio breakdown, then compare withdrawal, mediation, litigation, and illegal-contract termination.
If you already know the ratio, you can enter it directly for a precise calculation.

Example Scenarios

DLF Total Loss (Elderly Investor)

A bank branch recommended an overseas-rate-linked DLF to a conservative investor in their 70s, who lost the entire 100 million won.
With a 30% base for breaches of suitability and the duty to explain, plus aggravation for old age and weak head-office internal controls, the ratio rises to around 50%, implying roughly 50 million won in compensation.

Private-Fund Fraud or Mistake (Contract Cancellation)

If a private fund was sold while concealing its insolvency, cancellation for mistake or fraud may be recognized.
In that case the full principal minus the recovered amount is returned as unjust enrichment without any reduction, so a 50 million won investment with only 5 million won recovered supports a 45 million won claim.

ELS Partial Loss (Experience Reduces the Ratio)

An experienced investor who bought ELS products repeatedly claims a breach of the duty to explain.
Even if a 25% base applies, extensive experience and prior investment in the same product act as mitigating factors, so the final ratio can fall into the single digits.

Comparing the Remedies

Withdrawal of Subscription (Article 46)

Within the withdrawal window (usually 7 business days for investment products), the full principal is returned without penalty, making this the most advantageous option.
It cannot be used once the window closes, so check how many days have passed since the subscription.

Financial Dispute Mediation (FSS)

It is free, experts assess the compensation ratio, and a successful mediation has the effect of a judicial settlement.
However, if the seller rejects the proposal, the matter may proceed to litigation.

Civil Litigation (Damages Claim)

It carries enforcement power and can include 12% annual delay interest in the judgment.
It involves court fees, attorney costs, and one to two years, but a breach of the duty to explain shifts the burden of proof in the consumer’s favor.

Illegal-Contract Termination (Article 47)

A contract tainted by a breach can be terminated within five years of the contract (one year from discovery of the breach), with fees and penalties waived.
It is effective at stopping further losses on an ongoing contract.

Frequently Asked Questions (FAQ)

Q. Can I always get compensation just because I had a loss?

A. No. A breach by the seller (suitability, appropriateness, duty to explain, improper solicitation, and so on) must be recognized before a damages claim is possible.
A loss from ordinary market movements alone is hard to recover.

Q. How is the compensation ratio set?

A. A base ratio based on the severity of the breach is adjusted by aggravating factors such as old age and weak internal controls and mitigating factors such as investment experience.
The final decision is made case by case by the FSS dispute mediation committee or the court.

Q. I signed to confirm I was informed — can I still recover?

A. Even with a formal signature, a breach of the duty to explain may be found if no substantive explanation was given.
That said, a hand-signed confirmation can act as a mitigating factor recognizing some self-responsibility.

Q. What is the limitation period?

A. A tort damages claim must be exercised within three years of learning of the damage and the wrongdoer, and within ten years of the wrongful act.
Contract cancellation and illegal-contract termination have separate periods, so it is best to act quickly.

Q. Can I claim the calculated result as is?

A. This calculator is a reference estimate based on published mediation cases.
The actual amount depends on the evidence and facts, so consult an attorney before filing a claim.

Q. Which is better, mediation or litigation?

A. If cost and time are a concern, it is common to try free financial dispute mediation first.
If the seller rejects the proposal or the amount is large, litigation with delay interest may be more advantageous.

Helpful Tips

Secure evidence first: recordings, the investor-information confirmation, the product prospectus, and text or messenger chats greatly strengthen proof of a breach.
Do not miss the withdrawal window: a few days can decide whether the full principal can be recovered.
Old age and vulnerability are aggravating factors: being 65 or older, or having difficulty understanding finance, can raise the ratio.
Assert the duty to explain aggressively: the burden of proof shifts to the seller, the most favorable basis for the consumer.
Act together in group cases: joining other victims of the same product for mediation or litigation reduces cost and burden.

Estimate Your Compensation Now

Enter the principal and the type of breach to see the estimated damages and the available remedies right away.

This calculator is a reference estimate based on the 2026 Financial Consumer Protection Act and Capital Markets Act, and does not replace legal advice.

Legal scenario inputs

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