From: 72307.1502@compuserve.com (Gordon Meyer)
Newsgroups: comp.society.privacy
Subject: CC's and South Korea
Date: 29 Jul 92 22:32:14 GMT
Organization: Computer Privacy Digest
X-Submissions-To: comp-privacy@pica.army.mil
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X-Computer-Privacy-Digest: Volume 1, Issue 068, Message 5 of 7

[this submission is being xposted to RISKS]

 "Governments Come Looking for Card Information"                         
  It has been six months since the South Korean government's order
  that {credit card} issuers surrender files detailing individual
  account information, and card companies are still smarting.  The
  reason: The companies are uncertain whether they can prevent the
  government of any foreign country from taking similar action.   
                                                                  
  Issuers agree they have no objection to turning over account 
  information to a government when the information is pertinent to
  taxation cases, but they are angry that the South Korean govern-
  ment imposed its will in  a case involving national trade issues.
  Not only does the order raise questions about individuals' privacy
  rights, but the card companies are fearful of further government 
  intervention that could curtail their card operations in South    
  Korea.  The country accounts for 0.8% of all MasterCard and Visa
  volume, and 1.4% of their charges outside the USA.            
                                                                  
  On just what further action the South Korean government could take,
  card executives are unwilling to speculate.  In fact, the card
  companies are so worried about inciting the wrath of the government
  that they still refuse to discuss the matter in detail. (...) 
 
  Last October {1991} the South Korean government, reportedly
  concerned about the widening deficit between outgoing and incoming
  tourism dollars, decreed that all card issuers turn over information
  on their cardholders' overseas purchases from May thru August 1991.
  The government also demanded the issuer's magnetic tapes, which
  record the amount and location of each transaction.  Observers
  speculate that the order was prompted by a suspicion that citizens
  were evading a $3000.00 cap on overseas spending ...{exclusive of
  airline and travel costs}... by using multiple cards.
  
  (...)
  
  Issuers argue the economic link between tourism and the trade
  deficit is weak at best.  Some suggest that what the government
  really wants to do is crack down on excessive spending, which it
  reportedly deems a poor habit for its citizens.
  
  Not only are the card issuers irked that their protests have fallen
  on deaf ears, but they are deeply concerned that the government may
  move to put additional caps on cardholder spending.  "We have no
  idea how the information will be used, and that is a big concern,"
  says the card association spokesperson.  "It's a bit unnerving not
  knowing what is going to happen."
  
  (...) Some observers believe the government's action may even prompt
  other governments to follow suit.  Diners Club International, for
  example, reportedly fought similar decrees in Brazil, but was
  ultimately forced to comply.  Diners declines further comment on
  the matter.
  
  There appears to be very little the card companies can do if a
  country's laws do not prevent government seizure of consumer data.
  Amercian Express Co. reportedly protested the South Korean decree
  in vain.  "We are visitors here and if the government chooses it can
  ask us to leave," says on card company executive.  "We have a business  
  to run and we will always cooperate fully."
  
  Indeed, with the card companies working to establish a global payment   
  system, they're not in a strong position to challenge the fiats of
  local governments.  Maybe card issuers can be as well served by data-   
  protection laws as cardholders.
  
  Excerpted from "Credit Card Management" June 1992

  Gordon R. Meyer
  Internet:72307.1502@compuserve.com  GEnie: GRMEYER  CIS: 72307,1502