A three-year study on the change in consumer financial behavior after receiving credit counseling services, revealed that consumer credit usage and payment behavior were impacted in a positive way from such counseling. The analysis of 14,000 consumers examined ten different measures of borrower behavior subsequent to counseling and found that borrowers who received this form of budget/financial counseling reduced their debt and improved their credit profile over three subsequent years, compared to similar borrowers who did not receive counseling. The study was conducted by Georgetown University Credit Research Center and Lundquist Consulting under the blessing of the National Foundation for Credit Counseling and its members. TransUnion provided the measure of credit performance over the three-year period, from June 1997 to June 2000. The clients studied were those counseled by NFCC agencies who received a comprehensive budget review and written action plan. The clients included in the study were not on “Debt Management Plans,” where agencies actively intervene with creditors to negotiate client payment plans that can include reduced minimum payments, reduced interest rates, and lower fees. While agencies and creditors closely track the progress of individuals on DMPs, no known information heretofore has existed on the impact of clients who receive budget/financial management counseling only. On average, one-third of NFCC agencies’ clients counseled are recommended for DMPs. The other two-thirds typically need a budget review and an understanding of options available, financial education, and possibly referral to other social service organizations to address other specific underlying problems affecting families’ financial well-being. NFCC’s 155 members are located in more than 1,300 communities nationwide and are mostly known as Consumer Credit Counseling Services, although some members are known by other names. In the year 2000, NFCC member agencies were contacted by more than 1.5 million American families under financial pressure.
The likelihood that Providian might go under are just about nil, according to a consensus of opinions among analysts. Providian’s stock took a nearly 16% leap Friday to close at more than $7 per share, after the company made another positive announcement. The Company indicated last week that it had reached a settlement in regard to a class-action shareholder lawsuit. Under terms of the proposed settlement, Providian will pay $38 million, the proceeds of which will come from insurance. The settlement was presented to a federal judge in Philadelphia on Friday. The original lawsuit was filed in 1999 by shareholder litigation specialist Wolf Popper. The complaint alleged that Providian improperly obtained revenues, and misrepresented the source of its revenues and income in public filings and press releases. The suit charged Providian with intentionally failing to post credit card payments on time in order to enable Providian to improperly record as revenues late fees and penalties, improperly enrolling new credit card customers without their permission, and improperly charging credit card customers for Providian’s fee-based products not requested. Last week’s settlement comes on the heels of other positive financial news for Providian. Earlier this month, Providian signed an agreement to sell its Argentine operations, including Providian Financial S.A. and Providian Bank S.A., to a local investor group in Buenos Aires. The Company expects to record a modest gain on the sale. In February, Barclays Bank signed an agreement to acquire the UK credit card operation of Providian Financial. The UK portfolio consisted of $565 million in receivables and about 500,000 cardholders. Also in February, banking regulators accepted Providian’s new Capital Plan and the company cut 11% of its workforce as it lowered overhead. For the fourth quarter Providian reported a net loss of $395 million from continuing operations, compared to an operating profit of $225 million for 4Q/00. Analysts have applauded Providian’s pace, led by new CEO Joseph Saunders, at cleaning up its business. Some analysts project Providian will climb to $14 per share over the next year and, barring any surprise developments, will trade well above its 52-week low of $2.00 per share. For complete details on Providian’s 4Q/01 performance visit CardData ([www.carddata.com]). (CF Library 6/8/99; 1/11/02; 1/18/02; 2/01/02; 2/8/02; 2/20/02; 3/8/02)
Tidel Technologies, Inc. announced that it has received approval from The Nasdaq Stock Market to transfer its listing from the National Market to the SmallCap Market effective at the opening of business today. The Company’s trading symbol will remain “ATMS.”
Mark K. Levenick, Interim CEO, stated, “The voluntary transfer, which should be transparent to our shareholders, will afford Tidel the longest grace period to regain compliance with Nasdaq’s minimum bid price requirement of $1.00 per share. Tidel will now have until August 13, 2002 to resume trading above $1.00 per share. If the Company does not meet the minimum share price requirement by the August deadline, then Nasdaq will grant the Company an additional 180-day grace period if the Company continues to meet the other SmallCap Market initial listing criteria.”
Tidel Technologies, Inc. is a manufacturer of automated teller machines and cash security equipment designed for specialty retail marketers. To date, Tidel has sold more than 30,000 retail ATMs and 115,000 retail cash controllers in the U.S. and 36 other countries. More information about the company and its products may be found on the Internet at .
While smart cards used in telecommunications have floundered over the past year, the use of smart cards in the financial markets grew by 21% last year, driven by the country-wide projects that are replacing existing magnetic stripe bank cards with smart cards, such as the UK’s conversion to smart cards in 2001. Furthermore, the long-term prospects for smart ID cards are immense, in response to the events of Sept 11th. According to an annual study by SchlumbergerSema, year-on-year growth rates for the entire smart card industry last year fell from typical +20% levels to a flat line at just +3%. The SIM (subscriber identity module) smart card market experienced an unanticipated drop in 2001. The main reasons were low levels of handset renewals due to the perceived failure of WAP, the non-arrival of 2.5G technologies, near saturation of handsets in some countries, and the fact that many operators had overstocked on SIMs to meet growth predictions that did not occur. In combination with the general lack of confidence following events on September 11, the result was a decrease of the market of around 10%. For the wireless smart card sector, the growth outlook is now a modest 12% for 2002, moving upward to 20% in 2003. The key factor driving this growth curve is the arrival of higher bandwidth mobile network infrastructure, which is expected to mature and result in volume handset orders during 2003. Although the government-driven card application sector involves large volumes, SchlumbergerSema says it is still in its formative years. This makes it extremely sensitive to individual projects, and near-term growth forecast partially relies on an extension of existing projects, such as the massive French health card project, which moved from its roll-out to maintenance phase. From 2004 onward, however, overall market prospects start to become immense. Several countries are currently planning for national ID cards, with some projects expected to reach their roll-out stage during the next two years. Numerous other countries are beginning to consider options in this area, partly as a result of heightened security concerns stemming from the events on September 11. SchlumbergerSema predicts that smart cards in the banking industry will grow 25% this year and 22% in 2003.
A U.S. District Court has held a magazine subscription telemarketing group in contempt of court and ordered it to pay $39 million in consumer redress for violating the terms of a 1996 Federal Trade Commission settlement. Judge Vicki Miles-LaGrange wrote that despite the 1996 permanent injunction that barred various deceptive selling practices by the telemarketers, evidence presented by the FTC “â¦clearly and convincingly indicates that defendants’ acts and practices in connection with the sale of magazine subscriptions and magazine subscription packages violate the . . . Permanent Injunction.” The judge ordered H.G. Kuykendall, Jr., Diversified Marketing Service Corp., H.G. Kuykendall, Sr.; C.H. Kuykendall; National Marketing Service, Inc., NPC Corporation of the Midwest, Inc.; and Magazine Club Billing Service, Inc. to turn over the money to the FTC within 30 days of her order and ordered the FTC to submit a plan for the disbursement of this money to the court for review and approval. The Kuykendalls and their companies are based in Oklahoma City, Oklahoma. In March 1996, the FTC filed suit charging the defendants with making misrepresentations in connection with the telemarketing of magazine subscription packages to consumers. Specifically, the agency charged that the defendants misrepresented the cost or duration of the subscriptions; misrepresented the reason they obtained consumers’ account information; charged consumers’ accounts without authorization; refused to cancel subscriptions; misrepresented consumers’ rights to cancel telemarketing contracts under state law; and threatened to harm consumers’ credit ratings.
Hypercom Corp., the leading global supplier of electronic payment solutions, Friday announced that it has sold 7.87 million shares of its common stock at a price of $5 per share to select institutional investors and high net worth individuals.
The proceeds will be substantially used to pay down high-cost mezzanine debt and to return the company to a more typical lending structure. The company expects that the transaction will be accretive to 2002 earnings as a result of reduced interest costs.
“This transaction is the last step in refinancing Hypercom and achieves the important strategic objective of further strengthening the company’s balance sheet,” said Christopher S. Alexander, president and chief executive officer.
“Our strong balance sheet, industry-leading products and execution of several strategic initiatives over the past 18 months clearly positions us to capitalize on the opportunities ahead and to create long-term value for our stockholders.”
The net proceeds of the private offering have been used to repay two term loans in the amount of $15 million and $5 million, respectively, under Hypercom’s credit facility, to repay $3.1 million in outstanding loans from a director and principal stockholder, and to reduce the outstanding borrowings under the company’s $25 million revolving credit facility. The remaining proceeds will be used for general corporate purposes.
Hypercom offered and sold the shares pursuant to an exemption from registration provided by Section 4(2) of the Securities Act of 1933. Hypercom anticipates that on or before April 18, 2002 it will file a registration statement with the Securities and Exchange Commission to register the shares for resale by purchasers in the private offering.
In the first quarter of 2002, the company will take an approximate $1.3 million charge, net of tax, as it expenses deferred loan costs associated with its retired term loans. It is expected that this charge will be completely offset through interest savings throughout the remainder of the year.
About Hypercom ([www.hypercom.com])
Hypercom Corp. is the leading global provider of electronic payment solutions that add value at the point-of-sale for consumers, merchants and acquirers, and yield increased profitability for its customers.
Hypercom’s products include secure Web-enabled transaction terminals that work seamlessly with its networking equipment and software applications for e-commerce, m-commerce, smart cards and traditional payment applications.
The company’s widely-accepted ePOS-infocommerce(TM) (epic) framework of consumer-activated, EMV-certified, touch-screen ICE (Interactive Consumer Environment) terminals enable acquirers and merchants to decrease costs, increase revenues and improve customer retention. Headquartered in Phoenix, Hypercom is independently acknowledged as the leading provider of point-of-sale card payment terminals worldwide. Demand for Hypercom’s terminals surpassed 1 million units last year alone. Hypercom today maintains an installed base of more than 5 million terminals in over 100 countries which conduct over 10 billion transactions annually.
Hypercom is a registered trademark of Hypercom Corp. ePOS-infocommerce and ICE are trademarks of Hypercom Corp. All other products or services mentioned in this document are trademarks, service marks, registered trademarks or registered service marks of their respective owners.
Americans believe the credit and debit card industry is doing a good job in making the Internet a safe place to conduct transactions. According to a recent homepage poll conducted by CardWeb.com, 63% of consumers say the industry is doing a good job, while 16% are not sure and 21% say “no.” Americans also find that entering passwords to secure transactions is not a hassle. However, consumers are not convinced that smart card readers connected to personal computers will make the Internet a more secure place to shop. More than 84% say password-enhanced card transactions, such as Verified by VISA, are not a hassle. Only 5% have ever taken advantage of a digital wallet. Slightly less than half of Americans believe a PC smart card reader will improve security. However, 25% are not sure, and 25% say the technology will not help security. Of those surveyed, 56% actively use credit and debit cards online (more than 10 times per month), while 31% used credit cards online between 5 and 10 times per month. Only 53% believe online merchants are doing a good job in protecting their personal information from hackers.
Schools across the country will receive a $13 million windfall this month from the Target Stores School Fundraising program. From classroom supplies to playgrounds, K-12 schools can use the School Fundraising money at their discretion. Since the program began in 1997, School Fundraising has contributed more than $55 million to our nation’s schools.
School Fundraising allows families, teachers and members of the community to designate their school of choice to receive an amount equal to one percent of their Target(R) Visa(R) and Target Guest Card(R) purchases* at Target Stores and on target.com. Target also donates 1/2 percent of all Target Visa purchases made everywhere else. Currently, more than eight million Target guests are enrolled in the program.
“The addition of the Target Visa card in November is one of the reasons this donation to schools is so significant,” said Ann Aronson, director of community relations for Target Corporation. “The new card allows Target guests to contribute to School Fundraising wherever they shop in addition to Target or target.com. The remarkable growth and continued success of the School Fundraising program shows the need to continue to support fundraising efforts for education in our communities.”
School Fundraising is one of several programs under the Take Charge of Education initiative, which also includes scholarship programs and grants. School Fundraising checks are distributed to schools twice a year, once in March and again in September. Currently, more than 114,000 schools are enrolled in the program.
Guest Cardholders and school representatives can visit target.com or call 1-800-316-6142 to enroll or check school payout totals.
About Target Stores
Minneapolis-based Target Stores serves guests at 1,081 stores in 47 states nationwide by delivering today’s best retail trends at affordable prices. Whether visiting a Target store or shopping online at target.com, guests enjoy a fun and convenient shopping experience with access to thousands of unique and highly differentiated items. The largest division of Target Corporation (NYSE: TGT), Target Stores gives back more than $2 million a week to its local communities through grants and special programs. Since opening its first store in 1962, Target has partnered with nonprofit organizations, guests and team members to help meet community needs.
*Target Visa(R) and Target Guest Card(R) are credit cards issued by Retailers National Bank, an affiliate of Target. Subject to credit approval. Subject to School Fundraising program rules.
Koala International Wireless, Inc., a leader in the development of web-based, wireless network applications, announced it has entered into a letter of intent to acquire 100% of the shares of Transcard Limited of Toronto, Ontario, Canada, in exchange for common stock issued by Koala. The transaction is subject to a number of terms and conditions including the completion of mutual due diligence and approval by a majority of each company’s shareholders. Koala is building, through internal development and acquisition, a technology platform that incorporates state-of-the-art encryption and data compression techniques. The technology platform is integrated into a wireless communications device that allows access to a private cellular data network and/or the Internet. This capability enables Koala to exploit several existing complementary opportunities including Point of Sale (POS) and remittance applications that utilize credit and debit transaction processing for the restaurant, hospitality and entertainment industries.
In addition to POS applications, the Koala is in the final stage of developing the KIWI, a handheld wireless unit that is one of the most advanced personal telecommunications devices in the world. Basic services include instant messaging, Infrared Modem access, email, Internet browsing, office tools, business tools functionality, MP3 music player and others. The KIWI can be upgraded to a fully capable cellular phone that uses existing cellular networks. It can provide GPS functionality, extended telematics, screen signature capture, bar code recognition and other applications. The Company is currently evaluating a number of path-breaking compression technologies that are designed to enable wireless devices to deliver video teleconferencing and larger data packet transfer over GPRS or comparable cellular networks. By enabling the Koala Network central server platform to manage the bulk of the unit’s memory and processing capability, instead of locating them on the device, the KIWI can be produced and marketed at a price significantly lower than that of its competitors.
Transcard Canada Limited (www.transcardinter.com) is an International remittance and currency transfer company based in Toronto, Ontario, Canada. Transcard currently serves over 140,000 proprietary cardholders and offers its customers a variety of virtual account, currency conversion, and foreign exchange services. The company has deployed two finance cards, the TRAN$CARD International Finance Card and the TRAN$CARD Domestic Card. These cards offer stored-value electronic transfer debit cards permitting cross-border and global transfer of funds. Transcard’s cardholder can world-transfer funds electronically to a TRAN$CARD. The transferred funds can then be used wherever the TRAN$CARD brand is accepted to purchase goods and services or to withdraw money. Under an exclusive agreement, Transcard’s agent in the U.S. for collection is MoneyGram Payments Systems, Inc., of Lakewood, Colorado. MoneyGram is currently using Transcard’s proprietary stored-value card system to transfer funds to Cuba, under approval of the U.S. Government.
Stephen Dulong, CEO of Transcard, remarks: “The vision and technical capabilities of Koala and their expertise in secure, wireless banking services are extremely compatible with the growth plans of Transcard. Koala and Transcard, combined, represent an excellent opportunity to broaden and enhance Transcard’s functionality and offerings and further Transcard’s expansion into a number of additional international markets.”
Michael Johnston, President, CMO and co-founder of Koala, adds, “Koala’s technical and distribution infrastructure, coupled with Transcard’s proven formula for success in the international electronic collection and redemption business, will uniquely position Transcard to capture a large share of the international money transfer business.”
The demise of the Net 1st MasterCard issued by the now defunct Florida-based Net First National Bank, Colorado-based Equitex, and its Florida-based Key Financial Systems subsidiary has opened the door for new super sub-prime bank credit cards. According to CardTrak’s monthly commentary ([www.cardtrak.com]), the firm behind the Future VISA Card program has switched to promoting the AmeriOneCard MasterCard. Robert Johnson of Tampa, Florida and JohnsonLane.Com Marketing Services have unleashed a major promotional effort for the new card on the Internet. The AmeriOneCard MasterCard is issued by First National Bank of Central Texas. Unlike the Net 1st MasterCard, the AmeriOneCard does not come with an immediate balance. Rather, cardholders are required to deposit, preferably by ACH, at least $15 per month to the card to build an available balance. The card charges an $89.95 membership fee and a $9.95 monthly maintenance fee for essentially a debit card that is reported to the major credit bureaus as a credit card. On March 1st, the Office of the Comptroller of the Currency shut down Florida-based Net First National Bank. The patented “Pay-As-You-Go” credit card program, the basis for the Net 1st MasterCard, issued credit cards to consumers without a credit check or a security deposit. The card came with a $500 credit limit and a $500 balance. As the cardholder pays down the balance, the credit line will open and a credit history may build. Under the program, cardholders are required to make a $15 per month payment of which $7 is applied to the outstanding balance and $8 is applied to a ongoing monthly fee. (CF Library 3/4/02; 3/11/02)
Experian has been awarded a major contract to supply its web-based consumer identity authentication system Â e-identity Â to Camelot Interactive. E-identity will be used by Camelot Interactive as an identity authentication tool for its new online gaming website.
Camelot, the operator of the UKÂs exclusive provider of the National Lottery games, expects to re-launch launch the new The National Lottery website later this year, which will allow, allowing users to play a wide range of National Lottery games through the Internet. The first Instants games should be available from around the end of 2002.. The service will then be extended to include mobileWAP technology and interactive television.
Central to the delivery of the new gaming service and one of the main reasons e-identity was chosen as an identification tool, is the support it can provide Camelot Interactive in its continued promotion and commitment to responsible playgaming. By introducing e-identity, Camelot Interactive will be able to verify and authenticate all new player registrations and confirm that all customers are who they claim to be. This will ensure that only people aged sixteen and over, resident at a UK address and legally entitled to playgamble will have access to the site. As a result, only those people meeting all the strict criteria laid down by Camelot Interactive will be able to register and play the National Lottery games using the Internet.
Internet and any other interactive remote channels.
Richard Hurd-Â Wwood, Director of Camelot Interactive, Camelot, commented: “With the addition of ExperianÂs e-identity, we can ensure that all our customers are authenticated during the registration process to guard against illegal and under-age use of the site.
“E-identity will also help to us to promote responsible playgaming by preventing people from registering at multiple or bogus addresses and limiting any exposure to irresponsible playgambling.”
Richard Fiddis, Chief Operating Officer of Experian UK & Ireland, added: “We are delighted that Camelot Interactive has chosen e-identity as its authentication solution, as this further cements our position as the leading provider of identity authentication solutions in the UK. As more and more business is conducted online there is an increasing need for electronic consumer identification solutions, removing the need for companies to resort to paper-based proofs of identity.
“Using e-identity, Camelot Interactive will be able to authenticate its customers remotely, in real time, gaining a wider understanding of its customer-base in a transparent and non-intrusive manner. As an authentication solution, e-identity can also help to reduce the number of fraudulent remote credit card transactions – safeguarding against card-not-present (CNP) fraud*.”
E-identity, which is available via the Internet on www.e-identitycheck.com, accesses Experian’s vast consumer databases and public information sources to return an ‘authentication score’ so that organisations can have sufficient confidence that a consumer is genuine before proceeding with a financial transaction or commercial agreement.
Well known as a leading provider of anti-fraud and money laundering prevention solutions, Experian provides e-identity and other identification tools to a wide range of leading organisations including many in the banking and finance sector, retail and travel industry sectors where it is currently consistently detecting 90 per cent of fraudulent online credit card transactions.
VeriFone Inc., the worldwide leader in electronic payment solutions, and Atrana Solutions, Inc., Dallas, TX, a leader in point of sale (POS) terminal software solutions, announced the availability of MicroPortal, Atrana’s new technology designed to optimize delivery of value-added products and services to the POS, utilizing VeriFone’s extensive line of multi-application terminals.
MicroPortal enhances the POS terminal by enabling service providers to add and manage value-added applications without modifying the terminal’s payment software, and facilitates management of the terminal while working seamlessly with the resident application. MicroPortal can be used as a standalone application or in conjunction with any terminal payment software, including VeriFone’s SoftPay application. Value-added applications supported and enhanced by MicroPortal include activation and delivery of prepaid products, age and identity verification, gift cards and message delivery.
Accor Lodging North America, a division of Paris based Accor, is the first lodging chain to implement this new technology across the US. Two of its brands, Red Roof Inns and Motel 6 are deploying VeriFone terminals with Atrana’s MicroPortal technology to support prepaid long distance card services for one of the nation’s largest carriers.
“At Accor Lodging North America, we are constantly evaluating new technologies that enhance the lodging experience of our traveling customers,” said group executive vice president of marketing and sales Carol Kirby. “This solution will enable our sites to enhance customer service by providing superior prepaid long distance card service to our patrons. ”
“MicroPortal delivers new products and services to the terminal while totally eliminating costly software development projects or upgrades in the future,” said Atrana CEO, Salah Boukadoum. “We are pleased to work with VeriFone to introduce this new versatile product on their popular Omni line of terminals and to continue this effort with their next generation of payment solutions.”
“Multi-application capabilities give processors and ISO’s the ability to expand their portfolio of services, changing the point of sale into a new point of profit,” said Stuart Taylor, VP of Marketing, VeriFone Inc. “Value-added applications generate new revenue streams and improve merchant retention. The integration of Atrana’s MicroPortal with VeriFone’s Verix multi-application architecture facilitates the fastest delivery of new services by eliminating the need for re-certification of the existing payment application.”
VeriFone’s Verix architecture with both hardware and software separation provides a secure environment for the MicroPortal Applets, and also allows secure sharing of information between applications, eliminating the need for clerks to re-key critical data. The MicroPortal is available today on VeriFone’s Omni 3700 and Omni 3300 terminal families.
Based in Dallas, Atrana is a leader in providing point-of-sale (POS) card payment terminal software and systems to retailers, transaction processors and stored value providers. The company’s broad expertise in POS systems, back-end transaction servers and retail integration enables it to offer its clients complete technology solutions for credit, debit, fleet, loyalty, prepaid, gift card and other transaction-based services. Atrana’s customers include many of the industry’s largest transaction processors and service providers. Atrana’s Internet address is [www.atrana.com].
For further information on Atrana, Inc. please contact Brad Prizer at [email protected], or at 214-741-5222.
About Accor Lodging North America
Headquartered in Dallas, Texas, Accor Lodging North America is a division of Paris-based Accor ([www.accor.com]), the world’s third-largest hospitality company and the European leader in travel, tourism and corporate services. Accor Lodging North America operates more than 1,200 upscale and economy properties owned by Accor including the upscale Sofitel and Novotel hotel locations in the U.S. and Canada, as well as the nationwide economy leaders Red Roof Inns, Motel 6 and Studio 6. Together, Red Roof Inns ([www.redroof.com]), Motel 6 ([www.motel6.com]), and Studio 6 ([www.staystudio6.com]), comprise more than 10% of the entire U.S. budget lodging segment.
About VeriFone, Inc.
VeriFone, Inc., () is the leading global provider of secure electronic-payment solutions for financial institutions, merchants and consumers. VeriFone has shipped more than nine million electronic-payment systems, which are used in more than 100 countries. VeriFone, Inc. is held by Gores Technology Group, an international acquisition and management company.
About Gores Technology Group
With headquarters in Los Angeles, Gores Technology Group (GTG) is a privately held international acquisition and management firm that pursues an aggressive strategy of acquiring promising high-technology organizations and managing them for growth and profitability. GTG has a proven track record of acquiring and successfully managing companies including many divisions acquired from large publicly traded companies through its commitment to customers, employees and continued development of intellectual property. GTG has acquired and managed approximately 35 interrelated but autonomous technology-oriented companies with locations throughout the world. Those companies provide a broad range of technology-based products and services to a substantial customer base representing millions of active users worldwide. Visit the company’s Web site at [www.gores.com].