Six credit card businesses in the consumer goods-distribution industry will be scrapped as financial regulators move to crack down on the reckless issuance of quasi-cards among department stores and other big retailers.
According to the Financial Supervisory Service, they are Grand Department Store, JU Department Store, Daehyun, Shinwon, Chonan Arario and Buan Paradise Hotel.
Officials said the cards issued by the large retailers engaged in irregular offerings of benefits to cardholders or reckless issuance of quasi-cards by exploiting regulatory loopholes.
Further, the FSS has launched an investigation into bigger players such as Hyundai Department Store and Hanwha Galleria over possible misconduct in their card businesses.
“Though the usage of department store cards is restricted compared to ordinary credit cards, some companies allegedly provided cardholders with unreasonable benefits,” said an official.
He said inspectors are looking into whether such issuers offered customers inordinate free-of-charge services in return for card subscriptions.
Among the main targets are about 2 million private-brand credit card memberships lodged with Hyundai Department Store and Hanwha Galleria.
The FSS has reiterated that some department stores’ excessive marketing to woo more customers could taint fair trade in the market.
