[ISN] Online Banks Will Be Liable for 'Hacking' Damages in 2006

InfoSec News isn at c4i.org
Fri Dec 31 05:30:34 EST 2004


Park Jong-se
Dec. 30, 2004

Starting from 2006, financial institutions will be held responsible
for any damage consumers may suffer at the hands of hackers or from
malfunctioning computer systems while engaging in financial
transactions on the Internet.

The government adopted a financial e-transaction bill during a vice
ministerial meeting Thursday. The bill will be discussed at a Cabinet
meeting scheduled for Jan. 4 before being submitted to the National

According to the bill, if consumers incur damages or loss while
engaging in e-banking because of an incident caused by a third factor,
such as a case of hacking or computer system meltdowns, financial
institutions or e-banking service providers will be liable.

An exception that grants financial institutions immunity is also
included in the bill. If consumers cause a problem deliberately or by
their own mistakes, they will be held accountable.

The bill states that consumers' identification number, secret code and
certified document, all of which are essential prerequisites for
e-banking, should be issued only when consumers apply for them and
after their identity has been confirmed. It also mandates that
transaction records should be kept.

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