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South Korea Temporarily Bans Outbound Telemarketing of Financial and Insurance Products

February 03, 2014

Outbound telemarketers are up in arms this week in South Korea, where new government legislation is temporarily preventing the outbound telephone sales of financial and insurance products. The Financial Services Commission (FSC), an arm of the South Korean government, put the ban on the sale of financial products via telemarketing into effect in an effort to crack down on scams; specifically in response to large-scale theft of personal customer data stolen from three major credit card companies, KB Kookmin Card, Lotte Card and NH NongHyup Bank . The ban is expected to remain in place through the end of March, and to the end of May for the three companies in question, according to the commission, to keep thieves from misusing the information.

The nation’s association of telemarketers, the Korea Contact Center Association (KCCA), which represents some 120,000 telemarketers, says it’s unfair to target all outbound telemarketers for the bad actions of a few and say it fears many people will lose their jobs in light of the ban. In protest, the KCCA plans a protest rally on Thursday in front of the Financial Supervisory Service (FSS) in Yeouido, Seoul, according to the Korea Times.

“The telemarketing ban is wreaking havoc on telemarketers, who are already working under poor conditions,” said the KCCA in a statement. “They have nothing to do with the recent data leaks, but are suffering the damage due to the government’s measures. The government should come up with measures to protect them.”

The FSC says the ban is necessary to protect customers, though it hopes that firms will take steps to ensure the job security of telemarketers.

“We received reports that some telemarketers are using phones registered under false names or internet-based phones to continue selling products,” Ko Seung-beom, a senior FSC official, in a statement on Monday. “These sales activities will be strictly banned, and violators will be subject to punishment. The temporary ban is necessary to prevent possible financial crimes resulting from the data leaks. We need cooperation from financial firms.”

Some foreign companies doing business in South Korea have also protested the ban, as it covers the sale of insurance products and, as some companies say, violates free-trade agreements. According to the Korea Times, Hong Kong-based AIA Life sent a letter of protest to the FSC, and three American insurance companies ? AIG, Lina and ACE Insurance ? have discussed the ban with the American Chamber of Commerce in Korea (AMCHAM).

Edited by Blaise McNamee

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