At the Federal Trade Commission’s request, federal courts in New York and Georgia have temporarily halted three debt collection operations that allegedly violated federal law by threatening and deceiving consumers via text messages, emails, and phone calls. The FTC seeks to permanently end the unlawful practices.
ACI Worldwide announced the winners of the 2014 ACI Excellence Awards. The fifth annual ACI Excellence Awards celebrate leading financial institutions, processors and retailers for innovative and transformative uses of ACI solutions to solve real-world customer and business issues. ACI Excellence Award and Merit Recognition recipients were selected by a panel of judges comprised of ACI experts and leading global payments analysts from Aite Group, CEB TowerGroup and Celent. Winners were selected across ten categories and are based throughout the Americas, Asia/Pacific and EMEA. This year’s Excellence Award winners include:
A four-year old lawsuit over the use of mandatory arbitration to settle credit card and debt collection disputes is heading toward an end. This week, Bank of America reached a tentative settlement to drop the arbitration clause and class action ban from its consumer and small business credit card agreements for at least 3.5 years beginning in 2010. BofA will also immediately stop enforcing the existing arbitration clauses against cardholders. A prior tentative settlement was announced with Chase in November. In June, the case was amended to add the National Arbitration Forum as a defendant. The lawsuit had accused BofA, Cap One, Chase, Citi, Discover, HSBC and others of having secretly met or consulted some 30 times for the purpose of requiring cardholders to arbitrate all disputes with credit card companies in violation of the antitrust laws.
The number of fraud cases in the U.K. rose 16% last year to 214,342. Account takeover fraud soared by a record 207% with more than 19,000 cases reported in 2008. Frauds of this kind are enabled
through phishing, telephone scams, or by the interception of
credit cards and statements in order to take over an account, divert or fraudulently order goods or facilitate fraudulent transactions. CIFAS, the U.K.’s “Fraud Prevention Service” also reported that misuse of facility fraud rose 69% in 2008. Bank account products are the most commonly misused with plastic cards, communications and mail order accounts also proving to be popular with fraudsters. CIFAS also says the overall increase in successful identity frauds (i.e. identity frauds spotted after the granting of an account, card or policy), with CIFAS Members posted a 5.7% increase during 2008. However, there was a decline in the numbers of victims of impersonation seen over the past two years has continued, with a further 3.7% decrease in 2008 from 2007 figures.
Texas Attorney General Greg Abbott has charged Dallas-based Anderson, Crenshaw & Associates debt collection firm with using deceptive practices to collect payments from consumers by mailing deceptive letters and unlawful telephone calls claiming legal action against debtors. From around the country since 2006, the Office of the Attorney General has received more than 75 complaints regarding the organization while the Better Business Bureau has received 72 complaints all alleging variations of unlawful engagement in debt collection efforts, during the same 30-day period debtors were given to validate their debts. The complaints include abuse, profane language and threats to garnish consumersâ wages or file liens against homesteads, in violation of the Texas Debt Collection Act. The attorney generalâs enforcement action is seeking civil penalties of up to $20,000 for each violation. Anderson, Crenshaw said this morning it has fully cooperated with the AG regarding any questions or requests for information they had regarding Crenshawâs business operations. Crenshaw said that at no time did the AG indicate that it was in any way unsatisfied with Crenshawâs response and cooperation.
The U.S. District Court for the Middle District of Florida has issued a warrant for the arrest of a payment processor. The court found Ira Rubin in contempt for multiple violations of a 2006 TRO and a 2007 PI, stopping his cross-border payment-processing scheme. On January 15th, the court ordered Rubin to appear personally and show cause why he should not be held in contempt by continuing to engage in payment processing, misappropriating over $500,000 in receivership assets, concealing $95,000 in credit card charges from the Commission, lying on his sworn financial statement, and hiding 13 boxes of corporate records. Rubin failed to appear for the hearing. According to the FTC, Rubin operated Global Marketing Group which provided substantial support and assistance to at least nine Canadian telemarketing firms that sell non-existent credit cards to U.S. consumers.
MT-based financial services provider Davidson Companies announced that a database containing certain personal information of its current and past clients may have been breached. The company recently became aware of the intrusion and immediately took its public Internet site offline. The company has contacted law enforcement and its regulatory authorities, notified the three credit reporting bureaus, and retained an information technology security and forensic firm to review the incident to assist the company in its response. Based on the company’s review, there is no evidence the unauthorized access enabled the third party to affect or alter client accounts through company systems.
Kroger, a major grocery chain, and six other major merchants yesterday filed a federal lawsuit against VISA over its interchange fee practices. The lawsuit alleges horizontal price fixing by VISA and its members in the setting of interchange rates and charges VISA with creating and imposing rules and restrictions that preclude merchants from being able to negotiate lower fees. Kroger says credit and debit interchange fees have increased 11 times over the past five years and currently cost the firm about $350 million annually. Kroger noted that in 2003, for the first time ever, electronic payments comprised more than 50% of Kroger’s sales. Today, over 60% of Kroger’s overall transactions are made via credit or debit cards. Joining Kroger in the lawsuit are Ahold, Albertson’s, Eckerd, Maxi Drug, Safeway, and Walgreen. MasterCard was not named in yesterday’s lawsuit filed in U.S. District Court, Southern District of New York. A copy of the lawsuit is available via CardFlash Online ([www.cardflash.com]).
TX-based credit card processor EFG Card Services was barred yesterday from processing transactions through the ACH Network for numerous fraudulent telemarketers and to halt the alleged deceptive marketing of their own advance-fee debit cards. The FTC obtained the temporary restraining order on July 8th, which also set up a temporary monitor over the defendants to review their business practices. In its complaint, the FTC alleged that EFG assisted and facilitated at least four client telemarketers engaged in deceptively selling advance-fee credit cards, and a fifth client engaged in deceptively selling a lottery scam. The FTC complaint also alleges that in April 2000, the defendants engaged in the marketing and sale of their own advance-fee stored-value debit cards Â first the “First Freedom Financial” card and then the “AmeriOne” card. According to the FTC, the defendants charged consumers a one-time advance fee of between $80 to $100, as well as a $9.95 monthly service fee for these card. In May of this year, the FTC alleges, the defendants began marketing a new advance-fee card product, known as the “United USA Card,” making many of the same misrepresentations used in previous advance-fee stored-value debit cards. The FTC noted that EFG allegedly misrepresented the cards as credit cards, and that the “AmeriOne” card was affiliated with MasterCard.
MBNA warned yesterday, after certifying its SEC filings, that it may take a $200-$300 million charge due to proposed FFIEC regulations. MBNA said the proposed new regulatory rules might require it to create a reserve to cover uncollectible accrued interest and fees on managed loans, on non-accrual status. Currently, in accordance with generally accepted accounting principles and generally accepted industry practice, MBNA accrues interest and fees on loans until the loan is paid or charged off, at which time MBNA reverses the accrued interest and fees and, if the loan is charged off, charges them against current income. The bank credit card issuer has followed this practice and has disclosed it in its annual reports since it was established in 1991. MBNA says it does not believe an increase or decrease in the reserve for accrued interest and fees would significantly affect earnings in subsequent periods. MBNA’s stock gained more than 5% yesterday, closing at $19.60, after opening at $17.95 per share. For complete details on MBNA’s latest results visit CardData ([www.carddata.com]).
San Franciscans voted this week to approve ‘Proposition F’, the initiative to ban ATM surcharges, by an overwhelming majority. The action makes San Francisco the nation’s third city to adopt an ATM fee ban, following Santa Monica and San Diego. The San Francisco ban was driven in part by the United Steel Workers of America and its beef with Wells Fargo. The USWA says it will help run similar campaigns across California until Wells Fargo stops lending money to Oregon Steel for their alleged illegal union busting activity. Meanwhile the CO-OP ATM Network said last night it does not believe that the ATM surcharge ban rulings in cities like San Diego and Santa Monica, nor the vote to ban ATM surcharging in San Francisco, will hold up against national banks or federal credit unions’ chartering structures. Indeed the California Bankers Association filed a federal lawsuit yesterday seeking to preserve its federal regulatory oversight which pre-empt local regulations. The CBA also requested a TRO to block the ATM fee bans.
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Distraught Philadelphia business executive Bipin C. Shah, the man behind an international search for his missing daughters — has filed a pair of civil lawsuits in excess of $200 million against his ex-wife and an Atlanta woman accused of conspiring in a plot to have his children disappear into an underground network.
Shah is asking over $100 million in punitive damages from his former wife, Ellen Dever, and another $100 million from Faye Yager, who runs a clandestine operation that helps parents and children go into hiding to escape what they claim is abuse by the other parent. The suits were filed Thursday on behalf of Shah and his two children — Sarah Lynn, 8, and Genevieve Marie, 6.
In a separate statement to reporters, Shah said the complaints seek damages for “Dever and Yager’s conspiracy to interfere with my custody rights, for violating the custody rights of my children, depriving them of the lifestyle to which they have become accustomed and for creating emotional distress to both the children and to me.”
He added “This is not a case of spousal abuse. This is a case of a scornful wife and her fight to get more money from me after several failed attempts by her for reconciliation.”
According to the lawsuits, Yager is described as a “self-appointed crusader who has taken her crusade too far.” Shah’s lawyers contend in the suit that Yager has placed herself “in the role of deciding” whether he should be able to exercise his custody rights with the children “in order to protect their mother against unfounded and unproven allegations of abuse.”
One lawsuit was filed in Atlanta’s United States District Court for the Northern District of Georgia where Yager lives. The other was filed in Montgomery County Common Pleas Court in Norristown, Pennsylvania, the jurisdiction where Mr. Shah resides. Dever fled on June 8 violating the terms of a joint custody agreement. There is a federal warrant outstanding for her arrest on child concealment charges. There are also pending state criminal charges.
Last month Shah — who helped build the MAC electronic banking system into a national network — offered $2 million for the safe return of the children to him. Three days earlier The Pittsburgh Post-Gazette ran a picture of Ellen Dever — lugging a suitcase as she left her Main Line Philadelphia home to join Yager’s network. The article reported that Yager admitted helping the family go underground, knows their location and vouched for their safety.
According to the lawsuits filed by Shah’s attorney — Albert Momjian — Yager “aided and abetted Dever in unlawfully removing the children from Pennsylvania, concealed their whereabouts and has not allowed the father to see the children in over six months.” The couple were divorced 5-1/2 years ago.
Since his wife and children went underground Shah has spent over $700,000 in an exhaustive search for the girls utilizing 40 private investigators and two bounty hunters. They combed four countries, checked out 11 sightings and ultimately came up empty-handed when it was discovered that Dever had changed the identity of the children and herself and gone underground. The search went public on December 18 with the announcement of a $2 million reward for the safe return of the children to the former CoreStates executive.
Since then there have been over 2,000 calls prompted by media exposure and announcement of a free, 24-hour hotline to report sightings. The number is 888-977-FIND (3463). One-hundred bounty hunters have signed up — some from as far away as Australia and New Zealand. Three key sightings have kept investigators working around the clock.
In Nova Scotia, recycling cans now carry the pictures of Sarah and Genevieve.
A web site designed for the credit card industry by the CardWeb, Inc. has been running pictures of the girls and their mother. The address is or . In addition, the National Center for Missing and Exploited Children has created two websites for quick access to identification. The URLs are for Sarah and 0033b for Genevieve. To send e-mail to Bipin Shah the address is [email protected]
The lawsuits note that no one — neither Yager nor his former wife — “have ever accused Shah of harming the children.” Instead, Dever has admitted that Shah was a “loving, caring and tender father.” The suit against Yager alleges she is “using the mother and children to further her own agenda of purportedly helping abused children and has taken upon herself to act as judge and jury while depriving Shah of his children.”
The complaint calls her actions “intentional, willful, malicious and so outrageous” that Shah and the children are entitled to punitive damages in excess of $100 million.
The companion suit against Dever charges that the former Mrs. Shah violated a joint custody order when — with Yager’s help — she left Pennsylvania and went underground, concealing the children from their father since last June.
STATEMENT BY BIPIN C. SHAH
Last June 7 — 216 days ago, I was sitting on top of the world. I enjoyed the love and affection of my two wonderful daughters — Sara Lynn, the dancer and singer in the family and Vivi (Genevieve), the intellect. I shared legal custody with their mother, my ex-wife Ellen Dever. It’s now been 217 days since I’ve seen my daughters. They have been taken underground by their mother with the help of Faye Yager of Atlanta, Ga. Both my former wife and Ms. Yager acknowledge that I have never been abusive to my daughters, that I enjoyed a loving relationship with them.
Yet Ms. Dever and Ms. Yager have determined — acting as both judge and jury — that my children should be forever deprived of the love, affection and lifestyle provided by me and family members.
In making this determination they have violated Pennsylvania law and have interfered with my legal and moral custody rights. In secreting my children, they have, in effect, become the abusers of my children and me. They have not only violated my rights as a parent, they have violated the fundamental rights of my daughters to have the love and affection of their Dad.
I hold both Ellen Dever and Faye Yager fully accountable for their wrongful acts, for the damage they have caused to the children and to me. I have today authorized my attorneys to commence an action on my behalf and on behalf of the children against Ellen Dever in Pennsylvania and against Faye Yager in the federal court in Georgia. The complaints seek damages for their conspiracy to interfere with my custody rights, for violating the custody rights of my children, and for creating emotional distress to both the children and to me.
The complaints also seek punitive damages against each of them for $100 million. I pray that nobody has to go through the ordeal which my children and I are currently enduring. Every second that my children are not with me causes emotional distress to them and to me, the magnitude of which is immeasurable. This is not a a case of spousal abuse. This is a case of a scornful wife and her fight to get more money from me after several failed attempts by her for reconciliation.
Ms. Dever and Ms. Yager have deprived me of my beautiful daughters for 217 days without filing a stick of paper and without giving me my day in court. We have a wonderful system of justice in this country. And unlike Ms. Dever and Ms. Yager, I urge each of them to come to court and attempt to justify the actions they have taken in secreting my children. Let Ms. Dever come out from hiding and explain to a judge why she feels justified in playing God and denying my fundamental, moral and legal right to be with my children. Ms. Yager should come down from her high horse and explain to a judge in Georgia what role she played in assisting my ex-wife to hide my children and why she has decided to play the role of God in dealing with my children, not her children.