At its 14th meeting on the 31st, the Financial Services Commission voted to impose, under current law, a 1.5-month business suspension and a 5 billion won penalty surcharge on Lotte Card, where the credit information of 2.97 million customers was leaked by a hacker in August last year.
After Lotte Card reported the information leak caused by a hacking breach to the financial authorities on Sept. 1 last year, the Financial Supervisory Service conducted an inspection from September to October last year to review the hacking-related information leak. The inspection found violations of security obligations under the Specialized Credit Finance Business Act and the Credit Information Use and Protection Act, including failure to conduct information processing system correction (patch) work during the operation of Lotte Card's online payment system, failure to encrypt resident registration numbers and passwords, and failure to install antivirus software.
The Financial Services Commission, after hearings from the company and discussions in a subcommittee, voted to impose, for the first time for a hacking incident, a business suspension in relation to Lotte Card's information leak, and to impose a 5 billion won penalty surcharge for violations of the Credit Information Act. However, considering various factors such as consistency with past sanction cases, the company's post-incident remediation efforts, and impacts on financial markets and financial consumers, the business suspension period was set at 1.5 months.
Regarding the scope of the business suspension, card services related to new members are suspended, while for existing members, all applications for and use of card-related services are allowed under the suspension. The business suspension takes effect from Aug. 1, the day after the Financial Services Commission's resolution, and runs through Sept. 15.
The financial authorities said they will make every effort to protect financial consumers, including by continuously monitoring the impact of the suspension so that consumers do not experience inconvenience in using card services due to this suspension.