Friday, September 10, 2010   


Octopus chief facing exit as MTRC meets

LinaLeungand SamuelChan

Friday, July 30, 2010

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The fate of Octopus Cards chief executive Prudence Chan Pik-wah is in the balance as its major stakeholder, MTR Corporation, holds a special board meeting today to discuss the selling of cardholders' data to merchants.

Issues that board members will discuss are expected to include whether MTR should impose a more direct control over the operations of Octopus Holdings. MTR is not directly involved in Octopus' operation, although it has representation on its board.

The Octopus scandal has escalated with Chan accused of lying about how the company had handled personal data of millions of its customers.

The government hardened its rhetoric yesterday, with a spokesman saying an investigation was under way to determine whether Chan had broken any rules. The spokesman stressed that the government was concerned about how Octopus was governed.

Meanwhile, the Confederation of Trade Unions provided another account of what they said breached privacy by the company. It said three days ago, a former employee of the marketing research company Cimigo told the group that Octopus was profiting from questionnaires sent to cardholders. The confederation's Judy Ng Wai-ling said the former staffer, who worked at Cimigo from 2006 to 2009, had handled at least one million questionnaires to be sent through Octopus.

The surveys on lifestyle and habits were sent to cardholders via e-mail.

Octopus would charge the company for every survey sent, completed or not, and pass the data collected to Cimigo, all this without clients' consent, Ng said.

For each completed questionnaire, Octopus would make HK$10 or more. The confederation's general secretary, legislator Lee Cheuk-yan, called Octupus' profit-making "unethical" and called for making the act a criminal offense as a deterrent.

Lee, who has filed the complaint to the Office of the Privacy Commissioner for Personal Data, urged the government and MTR to intervene and have Octupus disclose the number of companies to whom data has been sold and the amount of the transactions.

In a statement issued last night, Cimigo said all kinds of market research activities conducted are within the law and in compliance with international standards. The company stressed clients participated in the survey voluntarily.

Octopus last night confirmed that it had worked with Cimigo in carrying out electronic and telephone surveys but the contract had already ended. It said its records show about 30,000 customer records had been provided to Cimigo.

It earlier revealed to the privacy commissioner that it provided personal data to six merchant partners.

Apart from Cimigo and two firms named earlier, Octopus said the others were researcher TNS, distributor Magazines International and AIA/AIU.


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