Octopus Sale of Private Data May Prompt Legislative Probe, CEO Under Fire

Hong Kong lawmakers say they may investigate the sale of people’s private data by electronic payment company Octopus Holdings Ltd., which provides cards used by millions of the city’s residents for daily transactions.

Octopus Chief Executive Officer Prudence Chan should be fired after denying sales of clients’ personal information earlier this month and then saying during a hearing held by the city’s privacy commissioner yesterday that it had happened, lawmaker Wong Kwok-hing said by phone today. Octopus declined to comment, said a spokeswoman who didn’t give her name citing company policy. Octopus may release a statement later, she said.

Chan told reporters yesterday that Octopus made HK$44 million ($5.7 million) in revenue selling the data since January 2006. Octopus provided 1.97 million customers’ personal particulars to six companies, including Cigna Worldwide Life Insurance Co., according to Chan’s remarks provided today by the company in an e-mail.

“Chan should be fired even if she doesn’t resign,” Wong said. “Octopus should sack her to redeem public trust.”

Chan, who joined Octopus from Visa International in 2006, apologized and said yesterday the company would no longer sell private information of its customers. Information on 1.97 million Hong Kong residents would amount to almost one-third of the city’s population of 7 million.

Octopus cards are used by Hong Kong residents who swipe them over scanners for transactions such as subway and bus rides and at fast-food outlets and convenience stores. While the cards can be purchased for cash, customers who participate in a rewards program with the card must provide personal details.

‘Not Fair’

“It’s not fair for our citizens,” said Winney Ho, 33, a clothing saleswoman. “What they did was wrong. It made me feel our information is not very secure. I won’t stop using the card because it’s convenient, but I might participate less in those reward programs.”

Courier Lee Kwok Sing said Octopus should donate the money it got to charity. “They took our information and sold us,” said Lee, 69.

Hong Kong Chief Executive Donald Tsang today expressed “concern” about the matter, Radio Television Hong Kong said.

The insurer Cigna said in a statement yesterday it was cooperating “fully” with the Hong Kong privacy commissioner and “the highest controls and standards have always been maintained with the limited customer personal data provided by” Octopus.

Wong said he had asked for a legislative investigation to start in October when lawmakers reconvene. Lawmaker James To said today by telephone he was among those supporting a probe.

Octopus is 57.4 percent owned by MTR Corp., which operates Hong Kong’s underground trains and develops property. MTR spokeswoman Diana Yue said yesterday that while Octopus operates independently, MTR as a shareholder expects it to take the matter seriously and reassure the public.

To contact the reporter on this story: Fox Hu in Hong Kong at fhu7@bloomberg.net

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