Financial institutions will face up to a W5 billion fine if they fail to protect confidential customer data (US$1=W1,067). That is 800 times more than the present paltry fine of W6 million.
In the wake of a massive data leak that affected some 15 million credit card holders, the government on Monday came up with measures to prevent similar incidents. It also decided to ban Kookmin, Nonghyup and Lotte credit card companies from issuing new cards and extending loans for three months.
The measures follow orders by President Park Geun-hye, currently in Switzerland, to investigate the leak and punish those responsible. Park also asked financial authorities to find the problems in the system that caused the leak in order to prevent another.
The government will revise laws protecting confidential customer data and submit it for National Assembly approval next month. They include a maximum seven-year prison term for those found guilty of either leaking or obtaining confidential customer data. At present, the maximum punishment varies from five to seven years.
Financial companies will also be banned from indiscriminately gathering confidential information from customers. At present, customers have no choice but to sign an agreement authorizing the card company to provide personal information to all its subsidiaries and partners, but in the future they will be able to refuse.