Many of the company's internet service customers were apparently illegally signed up for additional services by telephone sales agents, who did not obtain the written consent required under law, police say. Reports say the two ISPs may have illegally signed up 7.3 million of the 10 million households and businesses in the country that rely on them for internet service.
More than 60 employees and agents working for the two firms are now being questioned by police. KT has announced that it is cooperating with authorities and that it will improve internal data security procedures. Hanaro Telecom CEO Park Byung-Moo made an apparent apology at a press conference today, saying "he feels sorry to customers for causing such trouble," according to the Korea Herald.
The two companies provide a wide variety of services through their web portals, including email, auctions and games. Many of these services are free or advertising funded, although some require payment. It is not yet clear if any customers were illegally signed up for paid services.
"Even though subscribers are not aware they are internet site members and do not visit them, the high number of members itself can give website operators sales and marketing power in pushing for contracts with other businesses, for example, in advertising," detective Jeong Hyung-Won of Seoul's cyber crime investigation team told the Korea Herald.
Hanaro Telecom has also been accused of illegally sharing subscriber contact information with outside firms, which then contacted the customers in an attempt to sell products to them.
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