End to free credit card messages

Home > Business > Finance

print dictionary print

End to free credit card messages

Three credit card issuers - KB, Lotte and NH - said they will start charging customers for text messages about their purchases starting Monday.

The charges are likely to have a limited impact on credit card users since the service will only cost 300 won a month.

But some say the service should remain free, as it has been since data leaks that scared customers away from the companies.

The text messages tell a user when a charge has been made on his or her credit card, and is used to make people feel safe about their accounts.

According to the industry on Friday, the text message services by the three credit card issuers will be charged starting next month.

The card issuers decided to offer the service for free after personal information of its customers was leaked in January 2014.

Those leaks caused a nationwide panic that resulted in the resignation of top executives.

The information that was leaked was very detailed, including customers’ names, residential registration numbers, smartphone numbers and home addresses.

So much information was leaked that false identities could be created. The public was scared and angry, and information about prominent figures was leaked as well.

“We provided the free text messages to ease the anxiety of our customers, who feared that someone would be using their leaked personal information for financial gain,” said an official at one of the card companies. “The customers can check in real time if someone has taken money out of their accounts.

“We decided to pull the plug on it and start charging for the service as we believe the situation has settled and there is no immediate threat of information that was leaked being used against customers.”

Initially, the card companies were planning to end the free text message service at the end of last year.

But they decided to extend the grace period for two months. The financial authorities told them that they had not given sufficient notice to customers.

Since last year, there have been demands that the text messaging services remain free to prevent fraud.

But the card companies have dismissed that call, noting the high cost of running the service.

In April last year, opposition lawmaker Song Ho-chang released a statement saying there were numerous cases of credit cards being copied and then used without the legitimate owner knowing about it not only at home but also abroad.

To prevent such misuse, the lawmaker proposed offering the text service for free.

The lawmaker said the financial companies had been dismissing the idea claiming that the cost of operating the text messages is over 100 billion won a year.

But he said that in 2012 the cost was 49.8 billion won while in 2013 it was 52.2 billion won.

BY LEE HO-JEONG [ojlee82@joongang.co.kr]

More in Finance

Short selling divides punters big and small

Stocks dip more than 2 percent as investors book profits from recent rally

BOK head expresses concerns over rapid growth of local stock market

BOK keeps base interest rate at record low of 0.5%

Gov't-backed loans offered to all small shops from Jan. 18

Log in to Twitter or Facebook account to connect
with the Korea JoongAng Daily
help-image Social comment?
lock icon

To write comments, please log in to one of the accounts.

Standards Board Policy (0/250자)

What’s Popular Now