The FTC and the DOJ have nailed a spammer who posed as AOL and Paypal to facilitate credit card fraud. The Justice Department obtained a criminal conviction against Zachary Keith Hill of Houston and he awaiting sentencing. A U.S. District Court, at the request of the FTC, ordered the defendant to halt his identity theft scam. Hill sent out emails such as “AOL Billing Error Please Read Enclosed Email,” and “Please Update Account Information Urgent!” The emails took consumers to a spoofed AOL Web site. The defendant asked consumers to provide information such as their names and mothers’ maiden names, billing addresses, SSN, DOB, bank account numbers, and bank routing numbers. The defendant also asked consumers to provide their AOL screen names and passwords. The FTC alleges that the defendant used the information that consumers submitted to establish new credit card accounts, make unauthorized changes, and make purchases using the unwitting consumers’ credit information. The Paypal scheme worked in a similar way, with the defendant using the Paypal passwords that consumers provided to access consumers’ Paypal accounts and to purchase goods or services on their accounts.
The West Virginia Attorney General has filed a lawsuit against Cross Country Bank and its affiliate Applied Card Systems, asking the court to grant a temporary injunction restraining the companies from violating West Virginia consumer protection law until the final hearing in the case. Attorney General Darrell McGraw is also seeking reimbursements of $200 to $3,700 for each alleged consumer victim, and a $5,000 fine for each violation. The suit charges that Cross Country engaged in deceptive marketing of credit cards, offering low credit limits and charging exorbitant hidden fees to consumers who already had bad credit. The suit contends that Applied Card Systems used a wide range of abusive collection practices to coerce consumers into making payments if they contested the fees or defaulted on the account.The case is largely based on depositions of numerous debt collectors formerly employed at the Beckley, WV office of Applied Card Systems, which was closed last year. The Attorney General’s office says it has processed more than 200 consumer complaints against the firms. Cross Country and Applied Systems reportedly deny the allegations.
The FTC is seeking public comment on a proposed rule regarding free annual credit reports under the “FACTA” and the “FCRA”. Congress has directed the FTC to issue regulations to establish a âcentralized sourceâ and standardized form for credit report requests to nationwide CRAs. As required by FACTA, the FTCâs proposed rule provides for an orderly transition to full operation of the centralized source. The transition is intended to protect the nationwide CRAs from receiving a volume of free credit report requests beyond their capacity to process, and to ensure that consumers can get timely credit reports for other purposes.
KY-based Childers Oil Company has selected Visible Results USA’s “GraphiCard” card technology and CRM system as the base for a new rewards program to be implemented in its Double Kwik convenience stores. With the patented technology from Overland Park, Kan.-based Visible Results USA, program members’ cards are inserted into a smart point-of-sale terminal during each sales transaction. Childers Oil Company has grown to operate 40 convenience store/gasoline station sites throughout Eastern Kentucky and Virginia. The Visible Results Group of Companies has, since its inception in 1997, emerged as one of the world’s leading customer relationship firms, serving a growing client base across convenience, fast food, fuels and the general retail industry.
Capital One has named Susan McFarland to the post of Corporate Controller. McFarland will be responsible for overseeing corporate accounting and reporting functions for the company, as well as corporate tax and the financial control environment. In her previous two years at Capital One, McFarland has been serving as CFO for Capital One’s largest business line, US Card, and has provided support to the company’s various corporate infrastructure groups including IT and Human Resources. Capital One Financial Corporation is a holding company whose principal subsidiaries include: Capital One Bank and Capital One, F.S.B., which offer consumer lending products, and Capital One Auto Finance, Inc., which offers primarily automobile financing products.
CO-OP Network’s Service Center Corporation says its shared branching network for credit unions has produced extraordinary results. The financial success of Chessie FCU has spurred six credit unions in the mid-Atlantic region to open SCC outlets in the past year, including February 2004 when Fairfax County FCU launched the first SCC outlet in Virginia. SCC ([www.servicecenters.org]), based in Southfield, Mich., developed the nation’s first shared branching network in 1975, allowing multiple credit unions to conduct business in one facility.
Nashville-based Fleet One announced a deal to provide credit card issuing, authorization, and billing services for the commercial fleet customers of WILCOHESS, including a private label fleet card. The alliance between Fleet One and WILCOHESS also provides Fleet One cardholders with over 200 additional fueling sites in the Southeast. Fleet One provides transactional financial service solutions to companies with commercial vehicles, and the merchants that serve them. WILCOHESS, an A.T Williams Company, operates over 200 convenience stores and travel plazas in Alabama, Georgia, North Carolina, Pennsylvania, South Carolina, and Virginia.
VISA Asia/Pacific has named a new General Manager of Commercial Products for the region. Michael Cannon, former SVP and Regional Head of Sales and Service for JP Morgan in Europe, Middle East and Africa, will be responsible for developing VISA’s suite of business products in the SME, Corporate and Government sectors. In Asia Pacific, VISA has a greater market share than all other payment card brands combined with 62% of all card purchases at the point of sale being made using VISA cards. There are currently 198 million VISA-branded cards in the region. During the twelve months ended September 30, 2003, US$428 billion was spent at point of sale or withdrawn from ATMs in Asia Pacific using VISA cards.
Liverpool-based Merseyrail has inked a GBP 2 million deal with Cubic Transportation Systems Limited to build a modularly constructed access control and fare management system. The gates will be installed at the busiest of the 66 stations on the Merseyrail network. The gates support the magnetic strip farecards that Merseyrail initially plans to use, and include Cubic’s “Tri-Reader,” which can process any type of contactless smart card that meets international standards. The gates will be ready to accept smart cards when Merseytravel, the Passenger Transport Executive in Merseyside, upgrades to a smart card scheme in the future. Including the Merseyrail project, which will be completed later this year, Cubic will have delivered more than 1,000 gates to the UK train operating companies that have been running the former British Rail network since it was privatized in the mid-1990s. Merseyrail has an annual ridership of over 27 million passengers.
Capital One and Consumer Action have launched the “MoneyWi$e” Web site. MoneyWi$e is the first program of its kind to combine free, multilingual financial education materials with community training and seminars for consumers at all income levels. MoneyWi$e topics include understanding and building good credit, basic money management, banking basics, talking to teens about money, and understanding the pros and cons of bankruptcy. Capital One, a Fortune 500 company, is one of the largest providers of MasterCard and Visa credit cards in the world. Consumer Action is a non-profit, membership-based organization founded in San Francisco in 1971.
Capital One reported that its delinquency rate for January hit the lowest level in at least four years and that charge-offs dipped to their lowest level in more than a year. With $71.1 billion in managed loans, and approximately $46 billion in U.S. credit card loans, the issuer reported that charge-offs dropped to 5.00% for January, compared to 5.10% in December, 5.57% in November, and 5.30% in October. Delinquency dropped to 4.39% for January, after leveling off in December at 4.46%. At the end of fourth quarter, Cap One had 46.7 million accounts, including domestic and international credit cards and auto loans. For complete details on Capital One’s 4Q/03 performance visit CardData ([www.carddata.com]).
Capital One 2003
Month Charge-offs Delinquency
Apr 03 6.36% 4.86%
May 03 6.40% 4.82%
Jun 03 6.20% 4.95%
Jul 03 5.75% 4.92%
Aug 03 5.34% 4.74%
Sep 03 5.24% 4.65%
Oct 03 5.30% 4.52%
Nov 03 5.57% 4.46%
Dec 03 5.10% 4.46%
Jan 04 5.00% 4.39%
Source: CardData (www.carddata.com)
Capital One has officially made Catherine West, EVP and President of its $46.3 billion U.S. Card business. West served in the position on an interim basis in April of last year, as Capital One’s former President/COO Nigel Morris announced his stepping down on May 1st, and planned departure on April 30th of this year. West joined Cap One in March, 2000 as EVP/U.S. Consumer Operations. She previously worked as a senior executive at First USA and as VP of Credit Card Operations Servicing for Chevy Chase FSB. West currently serves on VISA’s Risk Control Advisors Committee. During the fourth quarter, Capital One grew its managed loan portfolio by $4.0 billion, and its domestic card loans by nearly $2.0 billion, compared to the previous quarter. Year-over-year, Capital One’s managed loans have increased 19.3%, and U.S. card loans have risen 13.2%, according to CardData ([www.carddata.com]). At year-end, Cap One had a managed loan portfolio of $71.2 billion and 46.7 million accounts worldwide. (CF Library 4/22/03)