Do KT, Powercomm Have Dirty Laundry, Too?

By Cho Jin-seo

Staff Reporter

After landing a 40-day suspension on Hanarotelecom this week, the telecommunication watchdog begun its inspection of rival Internet service firms KT and LG Powercom over unwanted telemarketing calls to customers.

The Korean Communications Commission (KCC) is dispatching its officials to see whether the broadband Internet service companies used private information of customers, such as name, phone number, address and Internet usage, to make promotion calls without consent.

Hanarotelecom was the first to get bashed last week by the KCC ― it is prohibited from receiving new contracts for 40 days. Should the other two get similar punishment it will put the three firms on an even keel, as many believe to be only fair.

KT and LG Powercom are neither admitting nor denying any wrongdoing.

``The inspection began, and it is premature to make comments on this issue,'' said Shim Chang-hyun, public relations manager of LG Powercom. ``We are actively cooperating (with the KCC) in the inspection,'' said Kim Young-wan, his counterpart at KT.

Insiders say it is unlikely that the two firms will escape unscathed, given the severe punishment given to Hanarotelecom.

``We have not been doing telemarketing for some time. But we are not sure whether there were unscrupulous activities by our sub-contractors,'' a manager at a local KT branch in southern Seoul said. He said that KCC inspectors arrived at its Guro branch and several other branches in Seoul on Friday.

The privacy issue exploded earlier this year when the police's Internet crime team announced Hanarotelecom let its telemarketing outsourcing firms use private information of its customers without consent. The response was disastrous for the company. Beside the KCC suspension, thousands of its former customers are filing class action suits using bounty-hunting lawyers. The police are expected to announce the result of their investigation sooner or later ― 22 former and current Hanaro executives have been charged.

It is no secret that all broadband Internet companies have engaged in illegal telemarketing to some degree. In most cases, it is their sales agents who collected customer information and use it to make phone calls. Many such outsourcing firms are under contracts with more than one firm and are accessible to their customer database, so they sometimes use one company's customer list to sell another companies' products.

Such misconduct has almost disappeared since the Hanarotelecom scandal was revealed and firms said they would temporality stop telemarketing for about two months. The KCC is to announce the result of its inspections on KT and LG Powercom in about a month, after which firms may resume making telemarketing calls because they are ``not illegal when used properly,'' the Powercom PR official said.

indizio@koreatimes.co.kr