Lotte Receives Apology from Lotte Card Following Regulatory Sanctions

Lotte Group has received an official apology letter from Lotte Card, which recently faced a significant regulatory sanction from financial authorities for a partial business suspension. Although Lotte Card was sold to a private equity fund several years ago, it still shares the 'Lotte' name, prompting this action to prevent potential damage to the group's overall credibility and customer confusion.
 
On August 3, Lotte announced that it had received the apology letter from the CEO of Lotte Card. This follows the Financial Services Commission's decision on July 31 to impose a 1.5-month partial business suspension on Lotte Card.
 
In the letter, Lotte Card expressed, "We apologize for the inconvenience caused to customers of Lotte Holdings and its affiliates due to this action, and we will focus on ensuring that customers using Lotte affiliates experience minimal disruption during the suspension period."
 
Currently, Lotte Card is not part of the Lotte Group. To comply with the principle of separation between financial and industrial capital after the establishment of its holding company in 2017, Lotte sold its stake in Lotte Card to MBK Partners in 2019, fully separating the two entities. Since then, Lotte Card has been operating under an independent management system led by MBK Partners.
 
On July 31, the Financial Services Commission decided to suspend Lotte Card's operations from August 1 to September 15 and impose a fine of 5 billion won due to a security breach last year that exposed the credit information of 2.97 million customers. The regulatory body found violations of security obligations, including failure to implement security patches during online payment system operations, non-encryption of resident registration numbers and passwords, and lack of antivirus software installation.
 
Following the cyber incident at Lotte Card last year, Lotte protested against the damage to brand value and customer trust, urging Lotte Card to take swift action to minimize customer harm. Lotte Card subsequently issued an apology letter and promised to implement customer protection measures immediately.
 
A Lotte official stated, "Even after the sale of Lotte Card's stake, many customers still mistakenly believe it is part of the Lotte Group due to the continued use of the Lotte brand. We plan to cooperate with Lotte Card to ensure that customers using affiliate stores can access services without inconvenience."