The Financial Supervisory Service has decided to suspend Lotte Card's operations for 1.5 months and impose a fine of 5 billion won

On July 31st, the Financial Services Commission (FSC) held its 14th regular meeting and approved a decision to suspend Lotte Card's operations for 1.5 months and impose a fine of 5 billion won. This action is an official sanction related to the incident in August of the previous year, when the personal credit information of 2.97 million customers was leaked due to a hacker attack. The measure is based on the 「Special Lending Financial Business Act」 and the 「Act on the Use and Protection of Credit Information.」 According to the circumstances of the incident, Lotte Card reported the information leak caused by a hacking incident to the financial authorities on September 1st of the previous year. Subsequently, from September to October of the same year, the Financial Supervisory Service conducted an inspection to investigate the information leak hacking incident. The inspection revealed multiple violations of security obligations in the operation of the online payment system, including: failure to implement system updates (patches), failure to encrypt resident registration numbers and passwords, and failure to install antivirus software. After considering the company's statements and discussions in the subcommittee, the FSC finalized the decision. The FSC stated that this is the first time it has imposed a suspension of operations due to a hacking incident. The 5 billion won fine is for violating the Credit Information Act, and the 1.5-month suspension period was determined after comprehensively considering various factors, including fairness compared to previous sanctions, the company's efforts to rectify the situation, and the impact on the financial market and consumers. The scope of the suspension of operations is limited to card-related services for new members. To prevent existing customers who are not responsible for the information leak from experiencing inconvenience, existing customers can apply for and use all card-related services. This measure demonstrates that the FSC's sanctions for violations of information security obligations by financial institutions are becoming stricter, and it is expected that pressure to strengthen security obligations will increase throughout the industry.