Insurance scandal opens door for pension fund purchase

by 09 Sep 2015
The Canadian Pension Plan Investment Board and Public Sector Pension Investment Board confirmed earlier this week that they were both part of a consortium that was buying Homeplus, a South Korean grocery store currently owned by British retailer Tesco, for US$6 billon.
But Homeplus is facing criminal and civil lawsuits as a result of it selling the private data of 24 million customers to several insurance companies for 23 billion won or the equivalent of $25 million Canadian dollars.
"Homeplus collected sensitive personal information, including names, phone numbers, birth dates and whether customers lived with their parents, which would likely be used for crimes such as phone scams and phishing," the consumers said in the complaint. "Under the law on privacy protection, a company should collect as little information as possible from customers and should not provide the data to a third party without their consent."
Tesco is unloading its largest foreign asset in order to concentrate on its troubled domestic market in the UK. Certainly, the South Korean scandal makes it easier for the giant grocery chain to justify this divestiture to shareholders while providing the Canadian pension funds with a significant investment opportunity. That’s if consumer backlash doesn’t sink future profits.
Some of the customer data was sold through a number of lotteries Homeplus ran between 2011 and 2014. Marketed as “customer appreciation” lotteries, the grocery store argues that the back of the tickets informed customers how the data would be used. Customers argue that the text was far too small to read.
"If we had noticed, we would not have agreed to provide our personal information. And even though some agreed to the provision, it does not mean they agreed to Home plus illegally making a profit through the data sale,” the customer’s legal complaint said. "Considering that this was done by one of the country's top retailers, unlike previous personal information leak incidents committed by hackers, this case is more serious.”