Financial authorities keeping a close eye on credit card companiesUpdated: 2014-06-02 14:02:04 (KST)
This footage from 2011 shows a credit card issuer urging passers-by to sign up for a new credit card, saying they will receive free baseball tickets if they do.
"If you make a card, we give you baseball tickets."
"How many do I get if I make one card?"
This is illegal as the value of the freebie exceeds the annual membership fee of roughly 10 U.S. dollars.
To prevent such practices, financial authorities implemented an incentive reporting system back in 2012.
The system, however, proved to be ineffective, as it was complicated and the incentives were low.
But now, the Financial Supervisory Service has raised the incentive to FIVE times the original amount.
They say people who report on illegal methods to entice customers, such as issuing credit cards on the street, or offering excessive giveaways, will be able to receive roughly 490 dollars in incentives, up from 98 dollars.
The stricter measures are part of efforts to prevent credit card companies who recently resumed business operations from engaging in aggressive promotional activities.
Three of the nation's leading credit card firms -- KB Kookmin Card, Lotte Card and NH Nonghyup Card -- have resumed operations after a three-month business suspension for their involvement in the biggest personal data leak in Korean history.
Financial authorities will make card companies offer free text message alerts to their customers, when they make purchases of over 50 dollars on their cards.
Card companies say the messaging service will cost them millions of dollars, but with profits on the rise from last year, it seems they will begin offering the service in the coming weeks.
Kim Min-ji, Arirang News.