The credit card industry was found to have taken profit by bullying its subcontractors over the past few years, a lawmaker said Wednesday, citing financial regulatory data.

The card issuers involved in improprieties during their deals with suppliers were BC, Shinhan, KB Kookmin, Hyundai, Samsung, Lotte, Hana SK, Korea Exchange Bank and NongHyup Bank, according to Rep. Kim Young-joo of the main opposition Democratic Party.

Her document, which was tendered by the Financial Supervisory Service, showed that the nine companies unreasonably imposed 13.6 billion won ($12.4) in card service charges on value-added network (called VAN) firms since 2008.

VAN firms are intermediaries that process data when consumers pay with credit cards. They receive payment from card issuers for the service.

When the nine firms paid the VAN firms service fees for the data processing, they paid the fees “not with cash but their company credit cards” by pressuring the suppliers to set up credit card settlement devices like ordinary retailers, said the lawmaker.

As a result, the VAN business sector had to see the 13.6 billion won deducted ― as a counter payment ― out of their total income from the nine card companies for the past five years.

“The issuers breached the antitrust law banning businesses from abusing their superior position in the market. It is considered to be an unfair trading,” Kim said.

Further, she criticized the credit card industry for hiking the card settlement fees that are imposed on the VAN firms from the former 0.33 percent to 1.88 percent on the average late last year.

As of December 2012, Hyundai Card topped the list with a service charge rate of 2.41 percent, NongHyup Bank Card with 2.4 percent, Shinhan Card with 2.25 percent, KEB Card with 2.09 percent and Hana SK with 2 percent.

Meanwhile, the Fair Trade Commission had uncovered that some issuers including Samsung Card and LG Card (former entity of Shinhan Card) engaged in a cartel to slash their payment to VAN firms.

The credit card sector, which has been placed under public criticism for charging retailers high service fees, as well as yielding a huge number of credit defaulters, is still in heated sales competition in the saturated market.

By Kim Yon-se (kys@heraldcorp.com)