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(LEAD) Police arrest two in KT data leak case

All Headlines 16:10 July 29, 2012

(ATTN: UPDATES with more info in last 4 paras)

SEOUL, July 29 (Yonhap) -- Police said Sunday they have arrested two people for allegedly hacking into the network system of KT Corp., South Korea's No. 2 mobile carrier, and selling the data.

A 40-year-old suspect, identified only by his family name Choi, and another were accused of leaking personal information of about 8.7 million mobile phone subscribers from February until recently, the National Police Agency's cyber terror response team said.

Seven others were booked without physical detention on charges of buying the leaked data for telemarketing purposes.

The number of KT subscribers accounts for nearly half of the total mobile phone users in South Korea, one of the most wired countries in the world.

Police suspect the telemarketers used the data, which contained personal information on the subscribers, their phones and monthly plans, to contact customers whose contracts are close to expiration or considered likely to change phone plans. Officials estimate the suspects earned at least 1 billion won (US$877,000) from the illegal marketing.

"It took nearly seven months to develop the hacking program and (the suspects) had very sophisticated hacking skills," an official at the cyber response team said.

KT apologized over the hacking incident, saying it has restored the leaked personal information and taken necessary steps to prevent further leakage.

"In light of this incident, we will strengthen the internal security system and raise awareness of security among all employees to prevent causing inconvenience to customers," the carrier said in a statement.

Market watchers said that KT will not be able to evade criticism for its lax management of personal data, raising the possibility that some angry subscribers may lodge a class action suit against the company.

The KT case came amid mounted concerns about online security breaches following a spate of hacking attacks on local financial firms and a popular Internet portal since last year.

Hackers struck the consumer finance firm Hyundai Capital Services Inc. and the National Agricultural Cooperative Federation, or Nonghyup, early last year, stealing customers' personal data and crippling online transactions.

Personal information by 35 million users was leaked in August 2011, hit by hacking attacks on two popular portal Web sites operated by SK Communications Co., the worst ever online security breach in Korea.


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