‘5 Billion Theft Damage’ Stationery Store Loses Lawsuit Claiming 3.8 Billion from Card Company

A stationery store that suffered theft damages totaling about 5 billion KRW over more than 10 years from a single customer using the "credit card payment fraudulent cancellation" scheme filed a lawsuit demanding tens of billions of won from the credit card company, but lost in the first trial.

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According to the legal community on the 25th, the Civil Division 46 of the Seoul Central District Court (Presiding Judge Lee Won-seok) recently ruled against stationery store A in the first trial of a 3.8 billion KRW credit card sales payment claim lawsuit filed by A stationery, located in Seocho-gu, Seoul, against credit card company B.

Previously, Mr. Yang, a customer of A stationery and operator of a personal POS device company, stole stationery products worth 5 billion KRW from A stationery over about 10 years starting in 2010 through 1,400 transactions. He exploited the fact that after making a payment using a credit card, he could secretly cancel the transaction approval through a specific program. Yang, who was caught, was sentenced to five years in prison in 2020 for fraud.

However, Yang squandered the stolen stationery by reselling it for living expenses and entertainment costs and was unable to repay the money. A stationery filed civil lawsuits against credit card company B and POS device management company C, respectively.

A stationery claimed against credit card company B, "The obligation to pay the credit sales amount for card transactions arises when B card company approves the transaction. The risk arising from Yang's abnormal cancellation of approval should be borne by B card company," and demanded "a total of about 3.83862 billion KRW, excluding the amount for which the lawsuit period has passed among the approved transaction amounts." "They also argued that credit card company B "failed to properly design and operate the Fraud Detection System (FDS), allowing the crime to go unchecked."

The first trial court did not accept A stationery's claim. Since the responsibility to request the cancellation of card transaction approval lay with the card merchant A stationery, the credit card company was not liable for damages caused by Yang's crime.

The court pointed out, "The obligation of the credit card company to pay the credit sales amount arises after the card transaction approval is normally made, the merchant submits the sales slip to the card company within the agreed period, and the purchase processing is completed. In this case, Yang canceled the transaction approval before the sales slip was submitted to credit card company B, and A stationery's lawsuit was filed after the submission period had passed."

The court added, "The Financial Supervisory Service's countermeasure meeting at the time to respond to the new crime method also focused on 'improving the work of the POS device management company.' Even if the FDS operated by credit card company B failed to detect Yang's crime, it does not immediately recognize B company's responsibility," emphasizing that "A stationery never went through the procedure of checking sales details and filing objections during Yang's crime period."

Meanwhile, regarding POS device management company C, a ruling confirming its liability to compensate about 1.5 billion KRW, which is 30% of the total damage amount, was finalized in May. The court stated, "Company C has an obligation to create a safe service system to protect customers. Developing new software to fix technical vulnerabilities is not impossible," but also noted, "There were many days when the daily amount of fraudulent credit card cancellations exceeded 10 million KRW. A stationery increased the damage by not managing sales meticulously."

This content was produced with the assistance of AI translation services.