South Korean finance firms face 3-month ban after credit-card breach

[WedgeAntilles]

South Korean finance firms face 3-month ban after credit-card breach

PUBLISHED : Monday, 03 February, 2014, 1:44am
UPDATED : Monday, 03 February, 2014, 1:44am

Bloomberg in Seoul

From left, NH Nonghyup Card head Sohn Kyung-Ik, Lotte Card CEO Park Sang-hoon and KB Kookmin Card CEO Shim Jae-oh, bow to offer an apology over a data theft during a news conference in Seoul. Photo: AP

South Korean regulators will order three consumer finance companies to suspend operations for three months as early as February 14 after the nation's biggest theft of data on credit-card holders, an official said.

The Financial Services Commission planned to notify the card units of KB Financial Group, NH Financial Group and the Lotte Group of its decision today, commission official Rhee Yun-su said.

"The companies will have 10 days to appeal" following notification, Rhee said. "Unless there's some change, the suspensions will take effect on February 14."

The theft has riled the public and politicians in a country where consumers use credit cards for more than half of their spending. President Park Geun-hye last month demanded a thorough investigation, and commission chairman Shin Je-yoon apologised for the breaches, which prompted top executives at the firms to offer to quit. KB Financial yesterday accepted Kookmin Card chief Shim Jae-oh's resignation.

In a nation of more than 50 million people, about 2.28 million cardholders at the three companies had so far requested cancellation of their cards, while 3.84 million customers demanded cards be re-issued, according to a commission tally.

About 20 million cardholders at Lotte Card and Nonghyup Bank and 40 million at KB Kookmin Card were affected, the Financial Supervisory Service said last month.