By Kang Seung-woo
Samsung Card President Choi Chi-hun apologized to its customers Wednesday for the unintentional leak of their personal information that was reported to police Aug. 30.
Choi’s apology came amid a group-wide fight initiated by its leader Lee Kun-hee, chairman of the flagship Samsung Electronics, against incompetence.
By many indications, the response appears to be a knee-jerk reaction to public criticism, casting doubt on his ability.
“Although the exact extent of the damage has not been determined, it was found that our customers’ personal identification numbers (PINs) or account numbers were not stolen," Choi said.
Interestingly enough, the apology was made through the firm’s website Friday but it was little known before Yonhap News, the state-run wire service, picked it up. The Chuseok holiday began Saturday and lasted until Tuesday but it baffles industry people as to why it took so long to get the apology publicized. “We will make efforts to prevent the recurrence of such incidents in the future by beefing up the internal security process.”
The card issuer is under criticism after personal information including names and mobile phone numbers of 800,000 customers was comprised.
In June, CEO Oh Chang-suk of Samsung Techwin, a defense and precision machinery unit, was fired after an audit result showed improper behavior by employees. A cleanup drive has been conducted while its internal audit system was strengthened.
Choi, the former CEO of Samsung SDI, took the reins of the card firm in December last year in Lee’s ambitious drive to create a global financial player among Samsung affiliates and lived up to expectations, putting up impressive numbers in credit card sales and membership recruitment in the first half of the year.
However, amid mounting concerns over personal data leakage in the domestic financial industry, it is inevitable for Samsung Card to suffer a hard blow to its brand image, which may translate to Choi’s departure from his post, holding himself responsible for the incident.
Choi, who will turn 54 next week, will face another hurdle ― a penalty from the financial watchdog.
The Financial Supervisory Service (FSS) launched last week a special regulatory inspection into Samsung Card, dispatching a team of inspectors to find out if it maintained a proper internal control system in accordance with financial regulations and search for evidence that the firm tried to downplay the violation.
Samsung said in its initial report to the FSS and the police that the information of about 18,000 customers had been compromised, despite already having secured a statement from the suspected employees who said he had leaked the data of 800,000 customers.
“The severity of penalties on Samsung Card will be decided by the estimated damage,” said an FSS official.
“Additional punishment will be given if we find any evidence of efforts to downplay or conceal the case.”
The financial watchdog has recently announced stricter disciplinary action against financial institutions involved in online security breaches following a series of hackings involving Hyundai Capital and the National Agricultural Cooperative Federation, also known as Nonghyup, earlier this year.
In the case of Hyundai Capital, where the data of around 1.8 million customers was stolen, the FSS issued a cautionary warning to its CEO Chung Tae-young.