By Dan Ilett, 9 December 2005 17:40
NEWS
The South Korean government is to force financial companies to compensate victims of online identity theft.
The country's Ministry of Finance and Economy (MoFE) is bringing in legislation that will make it compulsory for banks to cover any losses people incur from account hacking and fraud, the Korea Times reports.
Under the scheme, which comes into effect in September 2006, banks would have to provide compensation even if they are not directly responsible for damage to customer accounts.
The move follows a refusal by Korea Exchange Bank to compensate customers who were defrauded by internet banking. The bank said it would not compensate for customer damage unless people could prove the bank was at fault.
But the Korean government people who are careless with PINs and passwords would not be compensated for losses or damages from online scams under the new law.
UK banks are not required by law to provide compensation for fraud, although many do.
Richard Starnes, president of the Information Systems Security Association UK, said: "Out of customer relations, the banks repatriate funds for customer relations. I don't see any need for the legislation here at this point because banks look after their customers by repatriating funds."
Comments
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1. Praval Dube
The problem with these kind of laws is that they in-turn will demand more laws to protect the original law i.e. cases where people will rob their own accounts i.e. accomplice with the fraudsters and reveal their identities and share the amount repaid by the banks.
This will in effect lead to more laws leading to system complexity, as there will be many other crimes that can crop up.
The question therefore is weather the Korean Government have done a good homework before devising this law.
2. masaru ashida
Dear Mr Dan Ilett
I have read the article at December 9th　 “Korea forces banks to repay fraud victims”.
In Japan, the law which requires the fact that the financial institution compensates the loss of the victim of the card which forgery and robbery is done was formed on 2005 August 3rd.
As for this law, when there is a serious misconduct , e.g., date of birth is used for management and password of the card and password in the depositor other than, they are the contents that the financial institution bears concerning loss.
But, with the latest legislation thing of compensation concerning the victim of the fraud in the online banking was waived.
I ask with this case concerning 2 points below.
1) With the financial institution of Europe and America the online banking has spread in comparison with Japan. How is there the opinion of the financial institution, the supervisory authority furthermore of the consumer protective group inside England legislation concerning the compensation to the victim ?
2) With the article, it has become the report “of Korea Times”, but at the point where I inspected, the article of the English which corresponds was not found. It was not found even with the sight of Korean Ministry of Finance and Economy. It is to like to inspect the contents of the accurate article but please teach.
Best Regards