The South Korean government is introducing legislation that will make it mandatory for financial institutions to compensate customers who have fallen victim to online fraud and identity theft.The new laws will require financial firms in the country to compensate customers for virtually all financial losses resulting from online identity theft and account hacking, even if the banks are not directly responsible.
The country's Ministry of Finance and Economy (MFE) is planning to introduce the legislation in September 2006. MFE says the new laws will help alleviate the fears of some 23 million Korean e-banking, phone banking and ATM users over incurring losses due to online identity theft.
The move follows an incident earlier this year when Korea Exchange Bank refused to compensate customers who had incurred losses from an online banking scam. KEB said it would not compensate scam victims unless they could prove that the bank was at fault.
Under the new legislation customers will still be required to implement safety measures and won't be compensated for losses incurred from online scams if they are careless with card details, PINS and passwords.
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