Data-leaking financial firms face suspension

By Korea Herald

KB, NH and Lotte card firms to be halted for three months; FSC seeks to step up regulations, introduce up to W5b fines

  • Published : Jan 22, 2014 - 20:19
  • Updated : Jan 22, 2014 - 20:30
Financial Services Commission chairman Shin Je-yoon bows his head in apology for the recent leak of customer information by financial and credit card companies in a news conference held in Seoul on Wednesday. (Yonhap News)

KB Kookmin Card, NH NongHyup Card and Lotte Card, the three companies involved in the recently detected information leak of more than 20 million customers, will be suspended for three months, starting as early as next month.

The punishment came as the Financial Services Commission on Wednesday announced a set of preventative measures in a bid to better protect customer data and tighten regulations on financial firms.

The FSC also said financial companies responsible for the leaking of customers’ personal data may in the future face a business suspension of up to six months, as well as a fine amounting to 5 billion won ($4.7 million) or more.

“All of the data that was leaked from the three disputed card companies has been fully retrieved to block the possibility of additional abuse,” said FSC Chairman Shin Je-yoon in a press briefing.

Financial Supervisory Service Gov. Choi Soo-hyun also claimed that the leaked data did not include crucial information such as credit card pin numbers or card validation codes, and that those responsible were found before they could further distribute the collected data.

“The government will nevertheless implement a set of security measures so that the people may continue to use financial services without fear in the future,” Shin said.

Korea will impose a three-month business suspension on the three card firms, the maximum sanction possible under the current law, he said.

The government will submit a bill to the provisional parliamentary session next month to raise the ceiling for business suspensions to up to six months.

The watchdog also pledged to step up the fines for financial company officials who are responsible for customer data leaks.

Those who leak data will have to pay up to 5 billion won, a significant leap from the current ceiling of 10 million won. The amount is likely to be highest for deliberate offenses, according to the FSC.

Incumbent and former chiefs and executives who are in charge at the time of a data leak will face severe disciplinary actions, including dismissal or suspension, the financial chief added.

“The massive information leak in itself causes a significant threat to public security and thus should be regulated through sanctions,” he said.

The stringent measures come amid the public’s escalating fury over the recently disclosed personal information leak which affected more than 15 million people.

Up to 2 million people have applied to unsubscribe or have new credit cards issued.

In a gesture to take responsibility for the scandal, the chiefs and executives of the corresponding companies stepped down on Monday.

By Bae Hyun-jung (