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Lotte Card investigated over consumer complaints

By Chung Joo-won

The Financial Supervisory Service conducted a two-month investigation into Lotte Card, as the company ranked bottom in consumer protection among five major credit card issuers.

“(For an intensive probe), we dispatched inspectors to the headquarters of Lotte Card between September and October (in 2012),” an FSS official told The Korea Herald on Tuesday.

In addition to the on-site investigation, the FSS summoned Lotte Card’s executives to be held accountable for the poor grade and called on them to take measures amid growing complaints among customers.

The complaints included blackmailing of cardholders while collecting overdue loans.

The credit card unit of Lotte Group was given the lowest grade of “class 5” by the FSS in the first half of last year in the yearly consumers’ complaints inspection.

To prevent consumer exploitation and unfair transactions, the state financial regulator has publically assigned “grades” every year in April to credit card firms, insurance companies and banks.

The FSS official said the firm’s total amount of capital and other non-capital factors were also considered in the rating process.

“Now we are working on the evaluation process for the 2013 report (which will be made public in April),” said the FSS official at the consumer protection unit.

According to another statement by the FSS, consumer complaints and dispute arbitration requests soared between January 2012 and September 2012, showing an 11.9 increase compared to the previous year.

Consumer complaints concerning credit finance firms -- and their illegal debt collection in particular -- showed a 28.5 percent on-year increase.

Consumers’ requests for FSS dispute arbitration increased about 19 percent on-year as well.

(joowonc@heraldcorp.com)