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Public Apology, En Masse Resignations from Korean Bank CEOs
Large Number Resign after Admitting to Largest Data Breach in History
Public Apology, En Masse Resignations from Korean Bank CEOs
  • By matthew
  • January 20, 2014, 10:16
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Senior executives of three credit card issuers bow their heads in apology for a massive leak of confidential data of clients.
Senior executives of three credit card issuers bow their heads in apology for a massive leak of confidential data of clients.

 

The CEOs of KB Kookmin Card Co., Nonghyup Bank’s card division, and Lotte Card Co. bowed in unison at a news conference broadcast on YTN cable news network to apologize for the largest breach of privacy in the nation’s banking history on January 20. The companies also issued statements of apology on their respective web sites. 

These apologies were prompted one day after the Korean government’s Financial Supervisory Service (FSS) said that it began investigating Kookmin Bank for client data leakages. The companies decided to simply apologize and be frank with their customers. “We feel deeply guilty and ashamed for losing client trust because of this incident,” said Shim Jae-oh, KB Kookmin Card CEO, on the televised YTN event. “We will take all legal responsibility for any consequences.” 

The FSS formed a task force to investigate the proper protection of personal data by the card companies last Friday, January 17. Shin Je-yoon, Financial Services Commission chairman, had called for the task force to be formed on January 14. He later said that the leaks were a “severe crime that shakes the foundation of the financial industry.”

The information that was leaked includes bank account numbers, addresses, phone numbers, passport numbers, and credit ratings of approximately 20 million customers (earlier today estimated at only 15 million), including public figures and celebrities. Since the leak is thought to have happened at local branches of Kookmin Bank as they shared customer data with their affiliated credit card firms like KB Kookmin Card, Lotte Card, and Nonghyup Bank’s card, those accounts are thought to be compromised as well. Altogether, they are estimated to number at 104 million credit card accounts, which is over twice the population of the country. However, banking web site passwords and credit card CVC codes are thought to still be secure.

Rumors of a class action lawsuit put together by a consumer protection organization have not yet been confirmed. 

South Korea already has a severe problem with phone-based financial scams, with a combination of voice calling and text messaging campaigns that pose as government organizations or utilities and trick customers into sending bank transfers to bogus bank accounts being quite prevalent. 

An unconfirmed number of bank executives have resigned today, unconfirmed sources say.