Shinhan Card, which was found to have had 12 employees secretly siphon off franchisee personal information for three years, received a "good" grade in the "employee consumer protection training" category in the Financial Supervisory Service's consumer protection assessment conducted last year. The Financial Supervisory Service regularly evaluates financial companies' consumer protection systems and capabilities, but Shinhan Card's overall grade has deteriorated from good to average to inadequate.
According to the financial authorities on the 2nd, the Financial Supervisory Service requested and is reviewing materials on personal information leaks and internal controls from all card issuers. Currently, only Shinhan Card, where personal information was leaked, is undergoing an on-site inspection, but other card issuers may also be inspected after the document review. If deficiencies are found during the inspection, it will be escalated to an examination.
The Financial Supervisory Service asked the card industry to strengthen employee information protection training and internal controls to prevent similar cases from recurring. However, in the consumer protection assessment conducted last year, Shinhan Card received an average grade for its internal control system and a good grade for employee consumer protection training, prompting criticism that the assessment was conducted as a formality.
The Financial Supervisory Service checks whether internal control systems are operating properly and whether dedicated units are actively performing management and oversight functions. Shinhan Card received an average grade, but because almost no institution receives the highest grade of "excellent," the industry tends to view an average grade as relatively good.
The employee consumer protection training and compensation system category examines whether training on consumer protection is provided to employees and whether it factors into actual performance evaluations. Shinhan Card received a good grade in this category, even though the period during which employees extracted franchisee information was included in the assessment.
A Financial Supervisory Service official said, "The main content of the assessment focuses on matters specified in the Financial Consumer Protection Act, such as preventing improper sales and reviewing advertisements, and individual wrongdoing can be difficult to capture in the review."
Shinhan Card, which last year became the first card company to receive an overall grade of "inadequate," could receive "vulnerable" in this year's assessment. The Financial Supervisory Service lowers by one level the overall results for each category for financial companies that receive consumer protection-related sanctions or cause social controversy.
Grades are divided into five levels—excellent, good, average, inadequate, and vulnerable—and for any category graded inadequate, additional materials must be submitted to the Financial Supervisory Service periodically and the company must undergo examinations.