A major scandal has engulfed Japan Post Group, with up to 10 million customer accounts from Yucho Bank improperly used without consent for sales initiatives by its insurance arm, Kampo Life Insurance.
The figure represents a significant escalation from earlier reports, which indicated around 1.55 million accounts were affected.
The misuse of customer data includes creating solicitation lists for financial products such as investment trusts, government bonds, and other insurance offerings without obtaining necessary approvals.
The Financial Services Agency (FSA) has requested detailed reports from Japan Post Group to clarify the extent of the unauthorised data usage, in line with the Insurance Business Act. Japan Post officials have publicly apologised for the anxiety caused to customers and have announced measures to prevent future occurrences, including salary reductions for 14 senior executives. Japan Post Holdings also outlined plans to enhance customer consent verification systems and implement reforms to prevent similar incidents.
“We deeply apologize for causing anxiety and worry. We take this situation seriously and will implement preventive measures thoroughly.” Miho Ichiki, Managing Executive Officer, Japan Post Holdings, told local media at a news conference.
The scandal highlights potential systemic governance failures within Japan Post Group, particularly since its privatisation in 2007, and has raised questions about the adequacy of oversight by government agencies and the effectiveness of current regulations in managing sensitive customer data.
It also comes amid a backdrop of incidents plaguing Japan’s insurance industry in the last two years.
In 2023, a major scandal emerged involving price-fixing among non-life insurers, including Tokio Marine, Sompo Japan, Mitsui Sumitomo, and Aioi Nissay Dowa. The companies were accused of colluding to inflate insurance premiums for corporate clients and government agencies, leading to fines and business improvement orders from the Financial Services Agency (FSA).
In the same year, Bigmotor Co., a motor repair company, was found to have engaged in insurance fraud by improperly claiming insurance from major non-life insurers, which led to the resignation of several Sompo executives.
More recently, the industry faced a data breach controversy involving seconded employees who leaked 2 million customer records to their parent companies.
These incidents led the incoming Chairman of the General Insurance Association of Japan (GIAJ), Hiroaki Shirota, to pledge to address the industry’s recent challenges. “We will work together with our member companies to restore trust and improve practices in Japan’s non-life insurance sector,” he said in September.
