Police Raid Kakao Pay Headquarters Over Alleged Customer Data Leak

It has been confirmed that police have launched a compulsory investigation into Kakao Pay, which is accused of providing the personal information of approximately 40 million customers to the Chinese mobile payment service Alipay without customer consent.

According to investigative authorities, the Gyeonggi Nambu Provincial Police Agency's Anti-Corruption and Economic Crime Investigation Unit conducted a search and seizure operation at Kakao Pay's headquarters in Bundang-gu, Seongnam, over two days on July 6 and 7.

This is the first time police have raided Kakao Pay since they began the investigation following a request from the Financial Supervisory Service (FSS) in March.

It is reported that the police secured electronic data and other materials to examine the overall decision-making process behind Kakao Pay's agreement to provide personal information to Alipay.

The police plan to proceed with questioning witnesses and suspects after completing the analysis of the seized materials.

As of now, the suspects booked include Kakao Pay executives, employees, and the corporation itself; the identities and the exact number of individuals involved have not been disclosed.

Kakao Pay is accused of transferring 54.2 billion pieces of personal information belonging to approximately 40 million customers to Alipay between 2018 and May 2024.

It was revealed that Kakao Pay provided the information of its entire user base to build an "NSF score" calculation model that Apple had outsourced to Alipay.

The NSF score is a type of customer-specific score calculated to evaluate the likelihood of payment defaults by Apple service users.

The Personal Information Protection Commission imposed a fine of 5.968 billion won on Kakao Pay in January of last year, and the FSS also issued an institutional warning—a heavy disciplinary measure—in February, along with a fine of 12.976 billion won and a penalty of 4.8 million won.

Kakao Pay filed an administrative lawsuit against the Personal Information Protection Commission, claiming that the data provision was based on a lawful business outsourcing agreement, but the court ruled against the plaintiff on June 11.

At the time, the court stated, "It is difficult to see that the data subjects were aware of or had provided specific and clear consent to the fact that the information would be used by Apple as a type of credit evaluation index to assess the customer's payment capability."

It is reported that Kakao Pay has appealed the decision.

A police official stated, "After the FSS requested the investigation, we reviewed the materials and spent a long time preparing the application for the search and seizure warrant," adding, "As the police investigation is independent of the court's ruling, we will continue with the remaining investigation, including the analysis of the seized materials."

(Photo: Yonhap News)
※ Please note: This article was translated by AI and may contain errors.