Octopus Cards Limited (OCL) Tuesday recanted previous declaration, as a company spokeswoman confessed that Octopus distributed customer information under the Octopus Rewards program to two insurance companies, CIGNA and CPP, giving the insurers access to personal data, in order to offer special insurance plans.

Two weeks ago, the company insisted it had "never sold customer data to any third party organization". The company was discredited, however, when a former CIGNA employee last Wednesday disclosed that his former employer had purchased customer data pertaining to more than two million Octopus card users from the card company.

After a Board Meeting on Tuesday, Chief Executive Officer of OCL Prudence Chan held a press briefing to announce a program to repair the damage to the company's image.

Octopus has struck a Special Committee of the Board to conduct a review of corporate practices, to be completed in three months, Chan said. Chan promised that until the review is complete, Octopus will refrain from sharing personal information of card users to other merchants.

Chan also reminded 2.4 million Rewards members that they will no longer be at risk of having personal information handed over to marketers. She also promised new channels to make it easier for Reward members to opt-out of the program.

However, Chan refused to admit that the company had sold consumer information to anyone and refused to disclose specific information that had been provided to the two insurance companies.

She stressed that customer information is "protected by strict confidentiality agreements in the partnership contracts", which required the information be "used only for designated marketing promotions and it is returned or destroyed as appropriate afterwards".

The company stated that it will reiterate to the two insurance companies that they must adhere strictly to the confidentiality agreements concerning customer data in their position.

"I hope everyone can give us a little more time, because we would like to make a comprehensive response," Chan said.

However, legislator Wong Kwok-hing dismissed the Octopus plan to carry out a three month study as a delaying tactic. "They have promised to hand out the information (concerting what customer data Octopus handed out and whether the company profited from the exchange) to the Legislative Council by 6 pm yesterday (Monday). They have broken their promise repeatedly. I strongly condemn and feel very sorry for them," said Wong.

Wong also questioned the credibility of the newly established Special Committee of the Board. "It's their own people investigating their own company. (The review is) not credible at all!" he said.

Wong issued a statement of condemnation shortly after OCL announced its new measures. In the statement, Wong required OCL immediately stop using the information of Rewards members for any profit making purpose. He also urged the government to investigate.

If the card company holds to its refusal to disclose details of its transactions with the two insurance companies, Wong said he will force disclosure through the Powers and Privileges Ordinance.

China Daily

(HK Edition 07/21/2010 page1)