South Koreans sue as credit card details swiped

Victims Sue, Demand Answers

The first class action lawsuit was filed against the three credit card companies late on Monday, a day after the FSS revealed the full scale of the theft, according to the law firm representing them.

The victims are each claiming 110 million won ($103,400) in compensation. Lawyers said they expected more lawsuits to come, as internet chatrooms and social media seethed with complaints about the security failure.

"We are preparing additional lawsuits regarding the case and are receiving applications from victims," an official at the law firm leading the litigation said.

Cho Yeon-haeng, president of Korea Finance Consumer Federation, a customer rights group, said: "Proving actual damages will be very difficult, which means at best nominal compensation for emotional injury.

"What is needed is stopping repercussions by re-issuing all the affected credit cards," he added.

The stolen information included names, home addresses, and phone numbers, bank account numbers, credit card details, identification numbers, income, marriage and passport numbers.

The FSS said credit card passwords were not stolen, although this was cold comfort to South Koreans for whom most credit card transactions simply require a card swipe and signature - without the need for a chip and pin process. Some outlets such as home shopping channels do not even need a signature.

South Korean media reported that President Park and UN Secretary General Ban were among those whose information was stolen, although government officials and the card firms declined to comment. Park's office declined to comment, while Ban's office could not be reached to comment.

Executives from KB Kookmin Card, Kookmin Bank, NH Nonghyup Card, Lotte Card and Korea Credit Bureau, which hired the contractor, offered to resign as investigators probed how such a massive data theft could have occurred so easily.

Credit card spending amounted to 451 trillion won ($424.01 billion) in 2012, accounting for 66 percent of the country's private consumption, according to data from the Credit Finance Association of Korea.

The Nilson Report, a California trade journal that tracks the payments industry, said in its August issue that global card fraud rose to a record $11.3 billion in 2012, from just under $10 billion the year before.

Nearly half the losses occurred in the United States, helped by the lack of the more advanced card readers.