By Lee Min-hyung
LG Uplus, the nation’s third-largest mobile carrier, admitted Thursday its involvement in illegal sales practices.
This came after Rep. Yoo Seung-hee of the main opposition New Politics Alliance for Democracy said in a statement that IFCI, one of the company’s major retail agencies, had induced its salespeople to provide illegal subsidies to customers.
In August, the agency gave three million won ($2,520), up 400,000 won, to salespeople when they were promoted for improved sales performances, which she says has enticed them to provide the illegal subsidies.
The company received a seven-day suspension and 2.12 billion won fine from the nation’s telecom regulator.
The Korea Communications Commission (KCC) said it decided to stop the company from operating from Oct. 1-7 for violating the Mobile Device Distribution Improvement Act. This went into effect in October to prevent major mobile carriers from attracting customers with excessive subsidies by setting a ceiling of 333,000 won.
“We humbly accept the decision by the KCC,” LG Uplus said in an official statement. “We will make more efforts for our users not to experience inconveniences.”
An LG Uplus official said the company has yet to take specific measures to prevent a recurrence of the incident.
The KCC said it fined the company as it did not inform customers that they could receive a 20-percent discount on their mobile phone fees unless they got subsidies.
KCC Chairman Choi Sung-joon said in a general meeting, “We decided to hand down the decision as LG Uplus did not properly inform customers of the 20 percent discounted fees on purpose.”