Enterprise Security Breach Compensation, Everything Victims Need to Know

recent high-profile security incidents and their impact

from 2024 to 2025, there have been numerous security incidents involving major Korean companies. KT's micropayment damage incident caused 362 people to lose 240 million won, and Lotte Card suffered an unprecedented leak of personal information of 2.97 million people.

from the SKT SIM hack in April to the Yes24 ransomware attack in June, security threats are becoming a reality regardless of industry, from telecommunications companies to financial companies to online platforms. In particular, in the case of Lotte Card, 280,000 card passwords and CVC numbers were leaked, raising concerns about secondary damage.

the public's anxiety has reached a peak due to this series of security incidents. The bigger problem is that the compensation measures offered by companies fall far short of victims' expectations. there are increasing voices that simple refunds and reissues are not enough to compensate for the mental damage and time loss.

Analysis of KT's micropayment damage compensation

information theft through illegal base stations

At the core of the KT micropayment scandal, hackers installed illegal miniature base stations and stole customers' international mobile subscriber numbers and device identification numbers. The stolen information was used to make 22 million micropayment attempts, with 362 actual victims.

KT offered the following compensation to the affected customers: First, a full refund of the micropayment amount. second, a free cell tower replacement service. third, a free subscription to a cell phone protection service. fourth, free insurance for 20,000 customers for three years. fifth, converting 2,000 stores nationwide into safety and security specialty stores.

penalty waiver controversy and consumer reaction

consumers, however, have been lukewarm to the compensation plan. the biggest issue is the penalty waiver. it is controversial that KT does not waive the penalty for customers who want to leave KT because they have lost trust.

the National Assembly has also pointed out that it is natural for KT to waive the penalty after breaking even minimal trust. In fact, SKT immediately waived the penalty for affected customers when a similar cell phone hack occurred earlier this year, making KT's response even more comparable.

lotte Card data breach and compensation measures

a large-scale data breach

the Lotte Card breach is one of the largest in history. the personal information of 2.97 million people was compromised in a 200GB data breach, and even worse, 280,000 of them had their card passwords and CVC numbers compromised, making them vulnerable to fraudulent use.

lotte Card's compensation measures include: full compensation in the event of fraudulent use, free reissue of the card, no annual fee, and 10 months of interest-free installments. the Financial Services Commission has also announced that it will hold an emergency meeting to oversee the implementation of consumer protection measures on the ground.

the need for a class action system

however, these measures are not enough for victims, as they do not compensate them for the mental stress of having their personal information compromised, the time and money it takes to reissue their cards, and the anxiety of possible secondary victimization in the future.

civil society organizations are strongly calling for the introduction of a class action lawsuit system and punitive damages. currently, these systems are limited to only a few areas in Korea, making it difficult for victims of personal information breaches to receive substantial compensation.

comparison of punitive damages abroad

equifax 700 billion won compensation case

equifax, a U.S. credit rating agency, paid out a settlement of up to KRW 700 billion after a 2017 hack compromised the personal information of 140 million people. each victim was eligible for up to $20,000, and the company pledged to invest $1 billion in security enhancements over the next five years.

marriott Hotels was also fined $120 million for a breach of 380 million customers' information, and British Airways paid a $230 million fine for GDPR violations. target paid a $180 million settlement for a customer data breach.

limitations of the domestic system and how to improve

in Korea, on the other hand, the Personal Information Protection Act limits damages to KRW 3 million or three times the amount of damages. in addition, the burden is on the victim to prove the company's intent or negligence, making it very difficult for them to receive compensation.

the government recognizes this problem. in late September, the President's Office will announce a comprehensive information protection plan involving the Ministry of Science and ICT, the Financial Services Commission, the Personal Information Protection Commission, and the National Intelligence Service, as well as private experts. The plan is expected to include the introduction of punitive fines and measures to strengthen consumer protection.

practical Measures to Redress Consumer Damages

currently available remedies

if you are a victim of a personal information breach, it is important to first report it to the Personal Information Breach Report Center of the Korea Internet & Security Agency. this is because it officially records the incident and can be used as evidence in future collective dispute mediation or lawsuits.

the Personal Information Protection Commission's collective dispute mediation system is also worth considering. if you have 50 or more victims, you can apply, and if a settlement is reached, it has the same effect as a court settlement. however, there is a limitation: if the company refuses to settle, it is useless.

increase personal security for prevention

while compensation is important, prevention is best. change your passwords regularly and set up two-factor authentication. sign up for a micropayment blocker, and consider signing up for identity theft protection.

you can also utilize a data breach notification service to get instant alerts when your information is compromised. take advantage of any fraud detection services offered by your credit card or telecom provider.

frequently asked questions (FAQs)

Q1. How much compensation can I receive for a data breach?

A1. Under the current Personal Information Protection Act, the statutory damages are 3 million won or 3 times the amount of damages, whichever is greater. however, it is not easy to receive actual compensation because you need to prove actual damages and prove the company's intention or gross negligence. Most companies offer their own compensation plans such as refunds, reissues, and insurance.

Q2. What will be different when a class action system is introduced?

A. With a class action system, some of the victims can file a lawsuit on behalf of themselves, and if they win, all victims are automatically compensated. the burden of individual lawsuits is reduced, and companies have an incentive to invest in security. large compensation awards could become possible, as in the Equifax case in the US.

Q3. When can I switch carriers without penalty?

A3. You can request a waiver of penalties if the carrier's gross negligence makes it difficult to provide services, if it fails to meet the quality standards specified in the terms and conditions, or if the trust relationship is destroyed due to personal information leakage. SKT voluntarily waived the penalty in the case of the Yusim hack, but KT is still delaying its decision.

Q4. What compensation is available to Yes24 ransomware victims?

A4. Yes24 has proposed compensation for customers affected by the ransomware attack, such as paying points and providing coupons. However, there is no clear compensation standard for possible secondary damage caused by personal information leaked to the black market. it is important to report the damage and keep relevant evidence.

Q5. What will be included in the comprehensive information protection plan?

A5. The comprehensive information protection plan, which is expected to be announced in late September, will include increased punitive fines, expanded class action lawsuits, introduction of a discovery system, mandatory corporate security investment, and the creation of a victim relief fund. it is also expected to include measures to raise the security level of the entire country, not just the telecommunications and financial sectors.

closing thoughts

personal information leakage due to corporate security incidents is no longer an isolated incident. As the KT, Lotte Card, SKT, and Yes24 cases show, we can all become victims at any time. the current compensation system is not enough to compensate victims, so it is urgent to improve the system.

we encourage consumers to strengthen their personal security and actively assert their rights in the event of a victimization. share your experiences and opinions in the comments. for more information, don't forget to subscribe and set up notifications, and please share this article with others.