Online Education Provider Penalized for Misleading Scholarship Claims
The Korea Fair Trade Commission (KFTC) has issued a corrective order and imposed a fine of 5 million Korean won on Yanadoo, an online English lecture provider, for engaging in false and deceptive advertising concerning its scholarship programs. The KFTC’s investigation found that Yanadoo misrepresented the actual value, number of beneficiaries, and effectiveness of scholarships offered to students enrolling in its online courses.
Yanadoo has been operating a scholarship initiative since May 2014, designed to reward enrollees for completing lectures, submitting reviews, and participating in other program activities. However, between December 2023 and the time of the KFTC’s announcement, the company allegedly employed misleading marketing tactics to attract new customers.
Deceptive Scholarship Figures Unveiled
One of the primary claims scrutinized by the KFTC involved a prominent advertisement on Yanadoo’s homepage, which ran from December 2023 to November 2024. This advertisement boasted, “Already surpassed 8.8 billion won! A whopping 160,000 people have received scholarships!”
While Yanadoo provided evidence to support the 8.8 billion won figure, the KFTC discovered a significant discrepancy in the number of recipients. The 160,000 figure did not represent the actual number of individuals who received scholarships. Instead, it referred to the total number of participants who had attempted to qualify for the scholarship program. Furthermore, the calculation of the 8.8 billion won total lacked clarity regarding the cumulative timeframe and the specific criteria used for its determination.
The KFTC concluded that this advertising strategy was designed to mislead consumers. The commission stated, “Consumers who saw the advertisement could mistakenly believe that many enrollees recently attempted the scholarship program and received this amount of scholarships, rather than starting from May 2014 when scholarships began to be distributed.” This framing created an impression of recent, widespread success and accessibility that was not factually supported.
Misrepresentation of Scholarship Effectiveness
Further scrutiny revealed deceptive practices related to the purported effectiveness of Yanadoo’s scholarship program. From December 2023 to May 2025, Yanadoo advertised that “the completion rate of enrollees who attempted the scholarship program is three times higher compared to those who only took lectures.”
However, the KFTC’s investigation determined that this comparative claim was not based on a comprehensive analysis of all available scholarship types. The advertisement’s assertion was derived solely from data related to the “Full Refund Scholarship.” It did not account for other scholarship tiers, such as the “90-day Scholarship” or the “55-day Scholarship,” which may have had different completion rate metrics. This selective use of data misrepresented the overall success rate associated with Yanadoo’s scholarship initiatives.
Regulatory Action and Future Implications
Based on its findings, the KFTC determined that Yanadoo’s advertising practices constituted a violation of Article 21 of the E-Commerce Act, which is designed to protect consumers from unfair trade practices.
As a result of these violations, the KFTC has mandated the following:
- Corrective Order: Yanadoo is required to cease and desist from such deceptive advertising practices in the future. This order aims to prevent similar misrepresentations from occurring in their future marketing campaigns.
- Penalty: A financial penalty of 5 million Korean won has been imposed on Yanadoo. This fine serves as a deterrent and acknowledges the severity of the false advertising.
This action by the KFTC underscores the importance of transparency and accuracy in online marketing, particularly within the competitive online education sector. Consumers are increasingly relying on digital platforms for educational opportunities, making it crucial for regulatory bodies to ensure that advertising claims are substantiated and do not mislead potential enrollees. The ruling against Yanadoo serves as a reminder to other online service providers to uphold ethical marketing standards and provide consumers with truthful information.
