South Korea to suspend 3 credit card companies over data theft

Tuesday 4 February 2014 10:56 CET | News

South Korean regulators will suspend the operations of three consumer finance companies for three months after the nation’s theft of information on credit card holders.

The Financial Services Commission will inform the card units of KB Financial Group, NH Financial Group, and the Lotte Group of its decision.

The card companies will be barred from adding subscribers and marketing insurance policies or travel products from February 17th once penalties are set on February 14th, according to the commission. Services to existing clients will continue.

In a nation of more than 50 million people, about 2.28 million customers at the three companies have requested cancellation of their cards, while 3.84 million demanded they be reissued, according to Financial Supervisory Service figures as of February 1st. A total of 840,000 customers ended services with the companies.

About 20 million card holders at Lotte Card and Nonghyup Bank and 40 million at KB Kookmin Card were affected, the FSS said on January 19th. The estimate may include overlaps for multiple card holders or former customers.

The breaches prompted regulators to review all financial firms to examine how they protect customer data. The FSC also asked companies to voluntarily refrain from phone marketing of financial products by March as people are becoming increasingly concerned about information security.

Dozens of executives at KB Financial and Lotte Card offered to resign following the data breach. KB Financial accepted Kookmin Card chief Shim Jae Oh’s resignation.

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Keywords: South Korea, credit card companies, data theft, online fraud
Categories: Fraud & Financial Crime
Countries: World
This article is part of category

Fraud & Financial Crime