Bankruptcy 3Q/02

Bankruptcy filings continue to set records as bankruptcy reform is still batted around in Congress. Bankruptcy filings for the twelve month period ending September 30th totaled 1,547,669, up 7.7% from the 1,437,354 bankruptcy filings for the same period one year ago. For the third quarter, the total number of bankruptcy filings hit 401,306, the highest quarterly level ever. According to the Administrative Office of the U.S. Courts, non-business or personal bankruptcy filings, which make up the majority of bankruptcy filings, also broke records with a total of 1,508,578, up 7.8% fro 2001. The number of Chapter 7 filings rose 6.9% from the previous fiscal year to 1,084,336. Chapter 13 filings rose 9.5% to 451,258. According to industry data gathered by CardData, bankruptcy losses account for 46.9% of the credit card write-offs incurred by larger issuers, and 41.3% of the charge-offs sustained by smaller issuers. For complete details on the latest bankruptcy data visit CardData ([][1]).


Card Marketing

Credit card advertising climbed slightly during the third quarter to $238.2 million compared to $238.1 million for the second quarter. Meanwhile, advertising spending for all media rose 2.2% for the first three quarters of this year, compared to the same time period for 2001. According to CMR/TNS Media Intelligence, ad spending for the first three quarters totaled $84.4 billion, compared to $82.6 billion for the same timeframe in 2001. General bank advertising was $303 million for the third quarter compared to $301 million in the previous quarter. Since the first of this year, credit card issuers have pumped a total of $680.1 million into advertising. For the latest marketing materials including direct mail and print ads visit CardWatch ([][1]).


BMO 3Q/02

Bank of Montreal says it plans to expand disclosure of results of
its U.S. operations next year. BMO noted that Harris Bank, registered as
Harris Bankcorp, Inc., will voluntarily forego its status as a registrant
of the U.S. SEC. Harris Bank has no publicly-held securities outstanding
that require
SEC registration. Meanwhile for the quarter ending 10/31/02 BMO reported
net income of $1,417 million, down modestly from a year ago. Return on
equity of 13.4% was down from 13.8% in 2001.


UK-based nCipher has opened an office in Singapore and has named Eric Graf
von der Recke as Sales Director for the region. nCipher already has
alliances with Hong Kong-based, Automated Systems (HK) Ltd.and Quantiq
International in Singapore and Malaysia. In conjunction with the
announcement, nCipher has also named Automated Systems (HK) as reseller for
nCipher in the People’s Republic of China. nCipher offers hardware security
modules for the e-payments industry including: “nFast,” “nForce,”
“nShield,” and “payShield.” Eric Graf von der Recke was formerly with Certicom.

Chicago Card

The Chicago Transit Authority has launched the smart card-based fare collection technology developed by Cubic. The “Chicago Card” system was initially based on magnetic stripe ticketing and Cubic expanded it two years ago to include smart card technology. The smart cards used in Chicago incorporate Cubic’s “GO CARD” chip technology In 2001. Cubic received a $1.5 million contract from CTA to increase the purchase of smart cards from the original 3,500 to 300,000 over the next three years. The CTA operates the nation’s second largest public transportation system and covers the City of Chicago and 38 surrounding suburbs. On an average weekday, people take 1.5 million rides on the CTA.


ValuCard Nigeria plc has inked a deal with Ireland-based CardBASE
Technologies to develop a national debit card application for deployment
next year. Currently ValuCard offers an electronic purse program that has
grown, since its introduction in 1999, to more than 3,000 merchant
locations throughout Nigeria and has captured over 80% of the market for
electronic payments. CardBASE has designed “ValuCard Debit” to complement
the existing “ValuCard Purse,” which will now offer cardholders in Nigeria
the combination of purse and debit payment methods residing on the same
card. Cardholders can choose to pay for goods and services by taking funds
directly from their bank account using the debit application or cash from
their purse.


Bank One and UPS have teamed to launch the “UPS Capital VISA Business” card. For every dollar charged on the card, including shipping at and authorized retail shipping locations such as Mail Boxes, Etc., card members earn one credit toward UPS coupons. For every $2,500 in expenditures, a $25 coupon good toward UPS shipping services is awarded (monthly cap of two coupons). The card also offers – additional cards for employees upon request, with spending limits assigned by the business owner (or the authorized officer). The new card will be marketed through a direct mailing to small business shippers in the USA. However, customers can apply via toll-free phone or the UPS Web site. UPS Capital is a wholly owned subsidiary of UPS.

OnePass Bonus

Chase and Continental Airlines announced Tuesday they are offering double “OnePass” miles for its “Platinum,” “WorldMasterCard,” and “VISA Signature” cardholders. In addition to bonus miles, new cardholders will receive a $99 Companion certificate after they have been a “World MasterCard” customer for six months. And all current “World MasterCard” and “VISA Signature” cardholders will now receive two “Presidents Club” passes and two discount certificates redeemable for up to $150 in travel on Continental every year. New “World MasterCard” customers also receive a 10,000 mile sign-on bonus and “Platinum” customers receive 6,000 sign-on bonus miles. Standard cardholders earn one “OnePass” mile for every dollar spent on their card. Double miles will automatically be earned now for Continental Airlines ticket purchases made directly through Continental, as well as at AT&T, Bed Bath & Beyond, Best Buy, CVS/Pharmacy, KB Toys, Lowe’s Home Improvement Warehouse, Macy’s, US Postal Service, and all bookstores. There is no limit to the number of miles earned on the cards and Continental OnePass miles never expire.


San Diego State University has slected U.S. Bank to expand its “SDSU Card.” The “SDSU Card,” in addition to serving as official campus identification, provides access to campus photocopy machines, student laundry facilities, health services, the pharmacy and computer labs, and is an alternative to cash at drink and snack machines. Under terms of the deal with U.S. Bank, the bank has agreed to sponsor the inaugural “SDSU” Month and deploy three U.S. Bank ATMs on campus in the spring of 2003. The new ATMs will also dispense phone minutes, stamps and other banking services in addition to traditional cash deposit and withdrawal functions. SDSU will also participate in U.S. Bank Workplace Banking, which extends special banking services and products to the approximately 7,000 SDSU employees.

Videotext Settlement

The FTC says it has reached an agreement with Integretel and eBillit, settling charges brought by the FTC for their role in an alleged illegal scheme misusing the international telephone billing system to charge consumers for videotext services that consumers never purchased or authorized. Through the scheme, thousands of consumers were billed an average of $127 apiece for services that they did not even know had been accessed through their phone lines. The charges for the videotext services were represented as international telephone calls to Madagascar, an island nation off the east coast of Africa. Under the terms of the settlement, the companies will waive any claim to $1.6 million in payments collected from consumers for these videotext services.

HBC 3Q/02

Hudson’s Bay Company reported that credit card receivables for the quarter
ending 10/31/02 were $413.9 million compared to $371.1 million last year,
an 11.5% increase. HBC also reported that the average balance per active
customer account was $422, a 7.1% increase over one year ago. The average
volume per active account was $535 compared to $502 for the quarter ending
10/31/01. HBC’s average monthly active accounts were 3.0 million, down
slightly from last years 3.2 million. Sales on HBC’s credit card in the
third quarter represented 27.8% of total retail sales of the major retail
divisions compared to 27.7% in 3Q/01. At the end of the quarter, there were
2.9 million active customer accounts in the combined credit card portfolios
for the Bay and Zellers, 1.4 million Bay cardholders and 1.5 million
Zellers cardholders. Over the last twelve months, the quality of the credit
card portfolio has remained relatively constant. 94.7% of the receivable
portfolio was classified as current and 30 days past due, compared to 94.8%
at October 31, 2001.