Tue, Jan 21, 2014 - Page 15 News List

South Korean credit card firms apologize for information leak

Bloomberg

South Korean credit card companies — including a unit of KB Financial Group Inc, owner of the nation’s biggest bank — apologized for leaks of customer information as regulators deepened a probe into the matter.

KB Kookmin Card Co, Lotte Card Co and Nonghyup Bank’s card division issued statements on their Web sites yesterday expressing regret for the breaches. Their chief executive officers bowed in unison at a briefing broadcast on the YTN cable news network.

The apologies came a day after the South Korean Financial Supervisory Service (FSS) said it began probing operations at Kookmin Bank in relation to client data leaked at the card unit. Prosecutors have indicted three people for allegedly selling customer information from the three card companies, according to a Jan. 8 statement on the prosecutors’ office Web site.

“We feel deeply guilty and ashamed for losing clients’ trust following this accident,” KB Kookmin Card CEO Shim Jae-oh said in the televised briefing.

“We’ll take all legal and moral responsibility,” although there haven’t been any reported cases of the information being abused, he said.

The FSS started inspecting local units of Citigroup Inc and Standard Chartered PLC on Friday after prosecutors last month found that their customer information was also leaked, the agency said in a statement on Sunday.

The Financial Services Commission formed a taskforce on Friday to find ways to ensure financial institutions properly protect personal data. Commission Chairman Shin Je-yoon last week called for a meeting with heads of financial groups.

The regulator will hold top managers responsible for such incidents and will take stern action to avoid a repetition, Shin said on Tuesday last week, calling the leaks a “severe crime that shakes the foundation of the financial industry.”

The three card companies whose information was leaked are not publicly traded. Shares of KB Financial, owner of KB Kookmin Card and Kookmin Bank, fell 0.1 percent to 39,050 won at the close in Seoul after declining as much as 1.8 percent.

While there is no evidence that the leaked information has been misused, the card companies will fully compensate victims for any damage, Shin said in an e-mailed statement to reporters.

The regulator will consider revising rules to seek stricter punishment including fines, according to the statement.

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