Regulator should apologize for blunders

Regulators are not smart in introducing smart cards. They were bureaucratic and ineffective in replacing credit cards with magnetic stripes with those carrying chips. They have put off the plan until September, apparently under pressure from consumers.

Last week, magnetic stripe cardholders were unable to use the automatic teller machines (ATMs) during working hours as the Financial Supervisory Service suddenly introduced the measures.

No consumer opposes the plan for enhancing security authentication as swipe cards are prone to crime through duplications. The replacement is inevitable to prevent the leak of consumer information and financial loss.

The question was its introduction without notice.

The FSS contended that it has taken steps to adopt the smart card plan since 2004. However, few consumers knew of it. Currently 9 million cards, 17.5 percent of the 49 million cards, have magnetic stripes. Issuers have not informed consumers of the plan. Some of them were unable to replace the old cards with the new integrated circuit ones owing to a lack of the chips.

Many consumers seldom know whether their cards have magnetic stripes or are chip-embedded.

On March 2, consumers rushed to bank counters to withdraw cash as they were unable to use ATMs. They asked issuers to replace their cards, but have to wait up to two weeks to receive the fraud-proof new ones.

Issuers claimed that they had informed consumers through messenger services or mail. This was a lie.

The regulatory agency should have fully consulted with the issuers before introducing smart cards. They should have given consumers sufficient time to secure the integrated circuit cards.

The fiasco has eroded public confidence in regulators and issuers. The FSS should discipline those responsible for the poor decision. The episode illustrates how the regulatory agency is run by thoughtless personnel.

FSS Superintendent Kwon Hyuk-se still seems not to have gauged the depth of consumer anger and frustration. He just announced putting off the plan until September. He has not made it clear whether issuers are able to replace the old cards with new ones by June, the deadline for restricting the use of ATMs during office hours.

Before announcing the delay, he should have apologized to consumers for the inconvenience his agency has caused. He should ensure that all cardholders will be able to get the new cards before introducing the plan.

President Lee Myung-bak should tighten his grip on officialdom. Government officials tend to often become lazy in the final year of the five-year presidency.

Another example of the lax bureaucracy is the raising an expressway toll fees from 1,000 won to 1,050 won during weekends. Tollgate operators put this into practice without having sufficient 50-won coins at their disposal, causing confusion and traffic congestion at the tollgates.

The Board of Audit and Inspection should look into the case so that such bureaucratic inertia does not prevail in officialdom.