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FSS to punish Samsung Card for massive customer data leak
By Kim Yon-sePublished : March 7, 2012 - 21:17
The Financial Supervisory Service is set to take disciplinary action against Samsung Card for leaking customer information.
The credit card firm’s CEO Choi Chi-hun also faces a regulatory sanction for allegedly negligent internal control.
According to the FSS and police, the personal information of about 1.92 million customers of Samsung Card was leaked by a former employee between January 2010 and August 2011.
FSS officials say punitive measures against the company and its CEO are inevitable.
The regulator is in the final stages of deciding the extent and severity of the sanctions, and the result is expected to be disclosed in the coming weeks.
A source said there is a high possibility that the FSS will issue a “cautionary warning” to the company, instead of issuing merely a “caution.”
But he predicted that the sanction on CEO Choi would be a “cautionary warning,” while some market observers argued that he should be reprimanded with a “censure-level warning.”
The FSS can issue five levels of sanction against financial company heads ― caution (the mildest), cautionary warning, censure-level warning, suspension of duties and request for dismissal (the toughest).
Samsung Card management has been accused of seeking to downplay the seriousness of the incident.
The company said it first discovered the former employee’s irregularities on Aug. 25, 2011 as it was checking its data security system. It reported it to the financial regulator three days later, and then the police on Aug. 30.
Addressing the snowballing criticism that it tried to downplay the violation, Samsung Card said it tried to get to the bottom of the issue on its own, but failed.
“We are yet uncertain of exactly what kind of information has been leaked, but we understand that the first two digits of residence numbers, the names, companies and mobile phone numbers were exposed,” Samsung Card said in a statement apologizing for the incident.
Meanwhile, FSS officials said Hana-SK Card will also be subject to punitive measures for a similar incident last year.
By Kim Yon-se (kys@heraldcorp.com)
The credit card firm’s CEO Choi Chi-hun also faces a regulatory sanction for allegedly negligent internal control.
According to the FSS and police, the personal information of about 1.92 million customers of Samsung Card was leaked by a former employee between January 2010 and August 2011.
FSS officials say punitive measures against the company and its CEO are inevitable.
The regulator is in the final stages of deciding the extent and severity of the sanctions, and the result is expected to be disclosed in the coming weeks.
A source said there is a high possibility that the FSS will issue a “cautionary warning” to the company, instead of issuing merely a “caution.”
But he predicted that the sanction on CEO Choi would be a “cautionary warning,” while some market observers argued that he should be reprimanded with a “censure-level warning.”
The FSS can issue five levels of sanction against financial company heads ― caution (the mildest), cautionary warning, censure-level warning, suspension of duties and request for dismissal (the toughest).
Samsung Card management has been accused of seeking to downplay the seriousness of the incident.
The company said it first discovered the former employee’s irregularities on Aug. 25, 2011 as it was checking its data security system. It reported it to the financial regulator three days later, and then the police on Aug. 30.
Addressing the snowballing criticism that it tried to downplay the violation, Samsung Card said it tried to get to the bottom of the issue on its own, but failed.
“We are yet uncertain of exactly what kind of information has been leaked, but we understand that the first two digits of residence numbers, the names, companies and mobile phone numbers were exposed,” Samsung Card said in a statement apologizing for the incident.
Meanwhile, FSS officials said Hana-SK Card will also be subject to punitive measures for a similar incident last year.
By Kim Yon-se (kys@heraldcorp.com)
