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Financial companies to be banned from telemarketing

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Published : 2014-03-30 21:12
Updated : 2014-03-31 09:06

The overall financial sector, including banks, credit card and insurance firms, will be barred from selling products by phone under a new set of regulations scheduled to take effect this week.

A complete ban on the sale of financial products via telemarketing is included in the new guidelines aimed at “enhancing the protection of personal data,” set by the Financial Supervisory Service and the Financial Services Commission, a regulatory official said on Sunday.

The financial district of Yeouido in Seoul (The Korea Herald)

“All non face-to-face marketing activities will be banned, according to the new guideline, which will apply to all financial companies, starting in April,” he said.

The new guidelines stipulate that financial companies in the country are barred from making any phone call to individual customers ― except to those who consented to the use of their personal data ― for the sale of products.

Beside telemarketing services, the companies will also be banned from marketing financial products via email or SMS indefinitely.

Also, a text message service to remind customers when automatic payment withdrawals or automatic transfers occur will become compulsory for all financial firms, according to the official.

The new guidelines came after the financial regulators issued a temporarily ban on telemarketing services at credit card and insurance firms in the wake of a massive personal data leak scandal.

In January, an employee at a local credit rating agency was found to have stolen customers’ personal data from three major credit card issuers, KB Kookmin Card, Lotte Card and NH NongHyup Bank’s card division.

The FSS confirmed over 100 million pieces of personal information, including resident registration numbers, bank account details, and phone numbers, had fallen into the hands of data dealers. The financial regulators have already ordered the three card firms to suspend operations for three months starting in February for their involvement in the largest theft of information of credit card holders.

The regulators noted earlier in March that they would impose stricter guidelines, including a ban on financial firms sharing customers’ data among their affiliates, as part of the state-led comprehensive measures to prevent another massive data leak

They also pledged to tighten monitoring on insurance firms and check their information security and protection systems.

Some, however, now raise concerns about the stricter guidelines, especially the complete ban on financial firms’ telemarketing activities, claiming it could result in substantial job cuts among some 120,000 telemarketers in the country. 

By Oh Kyu-wook (596story@heraldcorp.com)

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