Doosan Bobcat Korea Ordered to Correct Practice of Shifting Uncollected Payment Risk to Dealers

The Fair Trade Commission has ordered Doosan Bobcat Korea to take corrective action for unfairly shifting the risk of uncollected bond and product payments onto its dealers. The commission found that from 2015 to 2022, Doosan Bobcat Korea demanded additional joint guarantees from third parties, including employees and their families, as collateral for sales, citing insufficient collateral based on annual sales figures.

Furthermore, between 2015 and 2021, the company stipulated in its transaction terms that dealers would be responsible for uncollected payments from consumers. Dealers were also required to offset these uncollected amounts against commissions they received from Doosan Bobcat Korea. The commission determined that this practice unfairly disadvantaged dealers by transferring the company's own risks of uncollected payments.

The commission noted that dealers' commissions were only about 8.5% of the product price, making the responsibility imposed through offsets excessively burdensome. However, the investigation also found that Doosan Bobcat Korea did not actually enforce the collateral or offset the sales commissions due to customer non-payment.

Following the Fair Trade Commission's investigation, Doosan Bobcat Korea has ceased demanding joint guarantees from dealers. The company has also removed clauses from its contracts that held dealers responsible for payment guarantees and allowed for the offsetting of commissions against uncollected product payments.