Data sale allegation hits Home plus

By Kim Rahn

Lee Seung-han Ex-Home plus chairman

Do Sung-hwan Home plus CEO

Former and incumbent Home plus executives were allegedly involved in selling the retail company’s customer data to insurers, according to the prosecution, Friday.

Two of them, former chairman Lee Seung-han and current CEO Do Sung-hwan, were barred from leaving the country.

Prosecutors at the Seoul Central District Prosecutors’ Office said they seized documents related to the allegation from the executives’ offices during the raid on the company’s headquarters in southern Seoul on Wednesday.

According to the prosecution, the Korean unit of British discount store chain Tesco allegedly sold the personal information of more than 2.5 million clients to several insurance companies over the past five years.

The information was sold for about 4,000 won per client, and the company allegedly made 10 billion won from the illegal trade. Lower-level Home plus staff allegedly advised their executives that they could make 4 billion won profit by selling the customer information, prosecutors said.

The prosecution received tip-offs that Lee and Do were involved in deciding that the information should be sold.

“We believe the data leaks were not a working-level decision but a top executive-level one,” a prosecutor said. “We suspect the executives were deeply involved in the leaks, either by directly ordering the leaks or conniving in them. We imposed an overseas travel ban on Lee and Do.”

The investigators are looking into the seized documents to see whether Home plus had procedural flaws in collecting and managing clients’ information, how the information was sold, how many customers were damaged, and how much the company received from the insurers.

After reviewing the documents, the prosecution plans to summon other Home plus, and Lee and Do if necessary.

In the meantime, the Home Plus labor union claimed the company encouraged its workers to attract as many customers as possible for lotteries.

“Managers told us to attract 100 clients each, saying they would offer us 100 won per client in incentives,” the union said in a statement.

“We thought the events were part of customer service, so we tried to attract clients. Now we have learned that the events were aimed at securing information, and we are so ashamed.”

The data leak allegation surfaced while prosecutors were investigating suspicions the company’s lotteries were being rigged.

Earlier on Tuesday, the prosecution indicted two employees, Jeong and Choi, on charges of fabricating lottery results and claiming four luxury vehicles as prizes between May 2012 and June this year.

The employees allegedly conspired with Choi’s friend, surnamed Kim, and a subcontractor to set up the computer programs so Kim won the first prizes.

After claiming the prizes ― two BMW 320d models, an Audi A4 and a K3 ― Kim sold the cars and split the money, about 150 million won ($143,000), with the other three people.

Prosecutors suspect there have been additional riggings.