The Financial Services Authority fined Capital One Bank (Europe) about $350,000 for alleged unfairness and misrepresentation in marketing “Payment Protection Insurance” to its credit cardholders. The issuer has undertaken a full remedial program at a cost of around $6 million. The FSA’s investigation focused purely on credit card PPI sales. During 2005 Capital One sold approximately 335,000 U.K. credit card PPI policies. The FSA says Capital One failed to send a policy document to more than 50,000 PPI customers between January 2005 and April 2006, although they did receive a policy summary. Also, two out of four script options used by its sales associates did not ask the customer for consent explicitly to receive only limited information over the telephone; the scripts did not ensure adequate disclosure in enough cases of policy features and benefits and policy exclusions and limitations; failure to provide customers who purchased PPI other than by telephone with the policy document prior to the conclusion of the contract; and compliance monitoring of telephone sales of PPI was not sufficiently effective. The FSA is currently investigating over 200 PPI firms.
Collis has joined GlobalPlatform’s expanding network of Systems
Compliance Test for Profile and Scripting. The compliance testing is to
develop faster and more efficient development processing for card
issuance systems. The membership allows Collis to closely track debates
& activities of all GlobalPlatform technical committees of the platform.
Collis is a VISA chip migration partner and has delivered significant
contributions to the EMV, e-Identification and 3G/GSM markets for over a
decade with high quality testing tools and expert consultancy and
training. GlobalPlatform is fundamental for smart card infrastructure
development. The platform is a member driven association with
cross-industry representation from all world continents.
The Discover Network has certified “MicroPass L4” intelligent hardware
from INSIDE Contactless. The “MicroPass L4” hardware consists of a
contactless chip to be used in fobs, cards and other devices in
Discover’s contactless payment network. The hardware is to be used for
quick retail transactions with the wave of a card, offering customer
convenience and the merchant benefit of moving more customers through
check-out lines in less time. Discover operations serves over 4,200
financial institutions and includes almost 250,000 ATMs and
approximately 3.4 million POS terminals. INSIDE Contactless has been
expanding over the past two years with more than 12M chips delivered for
contactless payment cards in the US market.
The acquisition of Brodos by Euronet, an electronic payments provider,
is now complete. Brodos Romania specializes in processing
electronic purchases of prepaid mobile phone airtime primarily on
point-of-sale(POS) terminals and supports top-up purchases at more than
14,000 POS terminals. With this acquisition, Euronet will have an
established Romanian prepaid market and offer additional prepaid
products to retail customers in the country. Currently, approximately 70
percent of Romania’s 22 million population have mobile phones, of
which more than 60 percent represent prepaid accounts. Euronet processes
electronic top-up transactions at more than 265,000 point-of-sale
terminals across approximately 157,000 retailers around the world. The
company has 27 worldwide offices and serves clients in more than 80
Tokyo-based TUV SUD has inked a deal to market Paris-based GALITT’s
“KaNest” and “KaNest-ICC” testing and certification tools in Japan.
GALITT’s simulation tools facilitate certifiable testing of smart card
and transactional systems. The “KaNest” simulators provide a
customizable test tool to validate exchanges between transactional
systems, including card processing systems and stock exchanges. The
“KaNest-ICC” simulators aim at testing smart card and accepting devices,
including all EMV-related components. TUV SUD Japan started the testing
of terminal devices for IC cards in 1998. KaSYS merged with COGESYS and
CARD.dev to create GALITT in 2004.
Fiserv’s electronic bill payment product “Paytraxx” signed 91 new financial institutions in 2006. The “Paytraxx” solution features extensive administrative capabilities that enable financial institutions to control user access, manage payment limits, generate reports, review enrollment history, review payments and alert history, and communicate securely with customers – all via a convenient Web-based interface. “Paytraxx” also lets the institution choose from a wide range of processing options, offering flexibility over user enrollment, authentication, payment posting and customer support.
In conjunction with Direct Cash, H&R Block will be offering “Instant
Cash Back” clients debit cards across Canada. With the debit card option,
clients will be allowed safe & secure access to their annual tax refund.
The card is immediately loaded and distributed with the customer’s tax
refund, including a secure PIN number, and is accepted at all Interac ATMs.
Because it is the client’s own money on the debit card, it is not
necessary for them to have a bank account or undergo a credit check to
qualify. H&R Block Canada is a subsidiary of H&R Block and prepares
nearly two million tax returns annually. H&R Block Canada has more than
1,000 offices throughout Canada.
Dallas-based Alliance Data Signs has renewed its agreement to provide private label credit card services for Redcats USA’s family of catalog brands and has expanded the relationship to include co-branded cards, plus a new card for the “Sportsman’s Guide.” The 10-year agreement includes account acquisition and activation, receivables funding, credit authorization, card issuance, statement generation, direct mail and email marketing services, remittance processing, marketing and customer service functions. Under the deal ADS will continue private label credit card services for the Redcats USA brands including Woman Within, Roaman’s, Jessica London, KingSize, Chadwick’s, metrostyle, La Redoute, OneStopPlus.com, BrylaneHome and BrylaneHome Kitchen, BCO (Brylane Catalog Outlet) and CCO (Closeout Catalog Outlet). Redcats USA’s catalog and online brands. ADS will also provide co-brand credit card services to supplement these card programs, targeting them to customers that meet ADS’ traditional credit quality standards. Redcats USA mails more than 600 million catalogs annually with 17 brands in 28 countries.
Nomad reports it had introduced 40 new prepaid programs in 2006 as a
result of its rapidly increasing customer base. The new programs are in
addition to the company’s already established services throughout
Europe. The company’s prepaid customer base increased by 50 percent last
year. The rapid expansion of this division of the company demonstrates
that Nomad’s tailor-made solution meets this market’s demands. Research
indicates that the open prepaid market is set to grow at 32% per annum
reaching a total in 2009 of over $43 billion.
Canadian Tire’s Financial Services division has increased loans
receivable by 7% between 4Q 2005 and 4Q 2006. 4Q 2005 reflected a
$3.4 billion portfolio whereas 4Q 2006 reflected a $3.6 billion
portfolio. This increase is due, in part, to the growth in the number of
accounts carrying a balance and an 8.2 percent increase in the average
account balance to $1,837 at the end of 2006. Financial Services’ pre-tax earnings for the
fourth quarter were $53.7 million, a 3.7% decrease from the $55.8
million recorded in the fourth quarter of 2005. The fourth quarter
adjusted earnings before income taxes increased 20.1% to $51.4
million from $42.8 million for the same period last year. These gains
helped offset lower year-over-year gains and the $6.1 million it cost
the company in its’ retail banking initiative. Canadian Tire operates
more than 1,100 stores, gas bars and car washes in an inter-related
network of businesses engaged in retail, financial services and petroleum.
Thanks to the growth of Advantex’ Advance Purchase Marketing Programs,
the fourth calendar quarter was the first quarter in recent history that the company
delivered an operating profit. Net revenue for the quarter was $3.4
million, an increase of 31.5% over the corresponding quarter in the
previous year. This growth reflects the positive impact of the increase
in assets deployed ($4.1 million compared to December 2005) in the
Company’s Advance Purchase Marketing Programs. Also, as a result of the
purchase programs, Advantex gross profit for the quarter was 2.2
million. Advantex is a marketing services company.
U.S. consumers received nearly 8.0 billion direct mail credit card solicitations last year, a 30% increase over the prior year. The gain was about double the growth rate of 2005 even though response rates are hovering at 0.3%, according to CardWatch(R) ([www.cardwatch.com]). Response rates have declined from 2.8% fifteen years ago to 1.2% ten years ago to 0.6% five years ago. American Express and Capital One led all other issuers in 2006 followed by Chase and Citibank.
U.S. CARD SOLICITATIONS
Source: CardWatch (www.cardwatch.com)