OH-based shoe discounter DSW has agreed to settle FTC charges that it failed to take reasonable security measures to protect customer credit card data. Retail Ventures, the parent of DSW, confirmed in March that credit card and other purchase information from a portion of DSW Shoe Warehouse customers was stolen. According to the FTC, DSW’s data-security failure allowed hackers to gain access to the credit card, debit card and checking account information of more than 1.4 million customers. About 96,000 checking accounts were compromised. DSW operates approximately 190 stores in 32 states. The compromised information affected consumers who shopped at 103 stores during December, January, and February. The settlement requires DSW to implement a comprehensive information-security program and obtain audits by an independent third-party security professional every other year for 20 years.
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Mars Electronics announced the first implementation of its “MEI CASHFLOW Combo Acceptor,” the industryÃ¢Âs only combination cash acceptor and credit card reader unit. The MEI Series 2000 Combo Acceptor features a Series 2000 bill acceptor and a debris-resistant, swipe-style credit card reader. Credit card transactions are integrated through the kiosk for delivery to the vendorÃ¢Âs backend system. MEIÃ¢Âs Series 2000 bill acceptors use advanced optical scanning technology to identify and validate legitimate bills in virtually any condition. The equipment will accept wet, damaged, and crinkled bills and coupons; and meets the MEI Gold Standard for water resistance with full fluid protection and jam resistance, preventing shorted boards.
MBNA’s former EVP/Director of Financial Reporting and Control, Desiree Burke, has been hired by Penn National Gaming as VP/Corporate Controller. Burke’s responsibilities at Penn National will include financial accounting and reporting such as Securities and Exchange Commission (SEC) filings, certifications and Sarbanes-Oxley compliance and documentation. Burke brings eighteen years of accounting experience to her new position at Penn National. She joined MBNA in 1994 and held positions of ascending responsibilities in the finance department including Executive Vice President/Assistant Controller and Executive Vice President/Director of Control. During her tenure with MBNA she was also responsible for merger and acquisition accounting and reporting. Burke earned a Masters in Accounting from Widener University. Penn National Gaming owns and operates casino and horse racing facilities in thirteen jurisdictions including Colorado, Illinois, Indiana, Iowa, Louisiana, Maine, Mississippi, Missouri, New Jersey, Ohio, Pennsylvania, West Virginia and Ontario.
First Data Prepaid Services’ ValueLink has inked a deal with Burger King to add prepaid gift card services to its “PAY IT YOUR WAY” card acceptance program. Under terms of the deal, Burger King is ordering gift cards exclusively from ValueLink for stores in the USA and Canada. BK will also process prepaid transactions via FDC. The agreement expands FDC’s relationship with Burger King. In 2004, BK selected Chase Paymentech Solutions, a joint venture between First Data and Chase, as their payments processor in the USA. FDC also processes credit card transactions for BK restaurants in Canada. The “PAY IT YOUR WAY” program includes credit cards, signature-based debit cards, and prepaid cards.
The largest home furnishings retailer and a pioneer of self-service has launched a credit card for U.S. customers that is available via in-store kiosks. The new IKEA private label credit card is issued by GE Consumer Finance. The self-service bilingual kiosks process credit applications in less than five minutes and without the assistance of an IKEA employee. Applicants receive a receipt they can use immediately through the following business day. The IKEA card is sent within seven to ten business days. Four to five kiosks are placed throughout each store. The card program also offers optional fixed payment plans for big-ticket purchases and special financing offers and payment promotions. IKEA has more than 225 stores in 33 countries, including 26 stores in the USA.
GE Money Canada landed a credit card program for Ben Moss Jewellers. Under this program, GE Money Canada will provide
Ben Moss Jewellers with card services to including marketing, risk
management, customer service, collections and payment processing. The
accounts will be serviced at GE Money Canada’s offices in Edmonton and
Toronto. The Ben Moss credit card has no annual or administration fees
and is currently offering all cardholders a six-month no payments
deferred interest promotion on purchases over $200. Ben Moss Jewellers has 52 stores located in 37 cities across Canada. GE Money Canada is
part of GE Consumer Finance-Americas and provides private label credit
card and MasterCard programs to consumers.
American Express and The Knot have launched two new co-branded consumer credit cards. The “Knot Credit Card” was developed for couples planning their wedding, and “The Nest Credit Card” is designed specifically for newlyweds. The Knot is a leading wedding resource that reaches 1.2 million engaged couples annually through the Web, newsstands, bookstores, and national television. The “Knot Credit Card” offers a wedding planning kit, special travel offers and free gifts. The new card also provides benefits and special discounts for wedding-related merchants and events. The “Nest Credit Card” also offers a planning kit as well as discounts for home-related offers plus special travel offers. Both cards carry no annual fee and offer automatic enrollment in the “Membership Rewards” program. Cardholders receive 5,000 bonus points with their first purchase and 10,000 bonus points with annual spend of $15,000.
Metris CEO David Wesselink and CFO Bill Houlihan have left Metris Companies today following its merger with HSBC. This past summer the SEC served a “Wells Notice” on Wesselink and controller Mark Wagener. The SEC investigation, first disclosed by Metris in August 2003, concerns the company’s reporting and treatment of allowance for loan losses for 2001 and its valuation of retained interests in securitized loans. HSBC required Metris to resolve the SEC issues. Earlier this week, the Midwest Regional Office of the SEC informed Metris that it does not intend to recommend an enforcement action against Metris. More than 99% of Metris shareholders voted to approve the HSBC acquisition yesterday. The acquisition closed this morning. Metris will become a wholly owned subsidiary of HSBC. Metris and HSBC signed an agreement on August 4th for an all-cash transaction of $1.59 billion. (CF Library 7/13/05; 8/4/05; 11/29/05)
Precidia Technologies has announced the certification of its “POSLynx220
with NetVu” by Chase Paymentech Solutions. This certification allows
restaurant operators and other merchants to connect existing dial and
serial point-of-sale equipment to IP networks for faster, more
cost-effective transactions. The “POSLynx220 with NetVu” connects two dial and two serial devices simultaneously to a broadband frame, DSL or satellite IP network, with no changes to the existing equipment. The “POSLynx220 with NetVu” offers a network configuration manager that streamlines deployment and provides valuable ongoing diagnostic data to network administrators and help desks, minimizing downtime.
Despite the recent surge in bankruptcies, charge-offs among credit card-backed securities rose slightly during the September collection period for both prime and sub-prime portfolios. However, 60+ day delinquency for prime portfolios rose 10 basis points in September, as card issuers brace for a spike in losses for the fourth quarter. For September, charge-offs in the “prime” asset-backed credit card securities market increased two basis point to 5.72%. “Sub-prime” charge-offs fell by 43 basis points to 10.73%. One-year ago, “prime” charge-offs were 5.73% and “sub-prime” charge-offs stood at 15.13%. According to the latest “Fitch Credit Card Index,” “prime” delinquency (60+ days) rose to 2.58% in September. “Sub-prime” delinquency (60+days) for September fell slightly to 6.53%, but continues to hover at the lowest level in four years. Capital One recently reported that its managed delinquency ratio increased to nearly 8% in October, almost double its year-ago level and up more than 300 basis over September. (CF Library 11/10/05)
ABS CHARGE-OFF HISTORICAL
Month Prime Sub-Prime
Sep 04: 5.73% 15.13%
Aug 05: 5.70% 11.16%
Sep 05: 5.72% 10.73%
Source: Fitch Ratings
VISA’s new contactless card, launched in February for Malaysia, has landed a major issuer and may soon add another 2,000 supporting merchants. Maybank today unveiled its first “VISA Wave” smart card which
offers a contactless payment option for transactions less than RM110.
Maybank is also the country’s largest merchant acquirer and as such
says it will expand “VISA Wave” merchant acceptance over the next six to
twelve months. About 2,000 merchants currently participate in the “VISA
Wave” program in Malaysia. VISA Asia Pacific made a national roll-out of
“VISA Wave” in Malaysia after concluding a 4,000 card pilot in the Klang
Valley in April 2004. The cards in the pilot project were issued by MBF
Cards. VISA says it expects as many as 500,000 “VISA Wave” cards to be
issued within the country over the next year. (CFI Library 2/28/05)