Check Fraud Still Dogs Nearly All Businesses

A new survey has found that 93% of organizations have been victims of attempted check fraud. Other payment methods targeted for fraud include: ACH debit fraud (35%); consumer credit card fraud (17%) and corporate card fraud (14%). The study, released by the Association for Financial Professionals, found that 86% of survey respondents report that their organizations had adopted positive pay services prior to 2006 to protect against check fraud. Almost two-thirds of the victims of attempted or actual check fraud reported that the fraud involved altered payee names on the checks they issued. AFP also discovered that half of organizations that were financially responsible for ACH fraud losses in 2006 did not use ACH debit blocks or filters and another 22% failed to reconcile their accounts or return fraudulent ACH debits on a timely basis.

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New Card Laws May Not Lower ABS Ratings

Concerns are surfacing as to the impact on credit card-backed securities if Congress passes laws to ban certain credit card practices. However, Fitch Ratings says that even though some changes may reduce yield and squeeze excess spread in some U.S. credit card ABS securitizations, it is unlikely that more stringent requirements will have a direct adverse effect on collateral or transaction performance. Whether or not required to by law, Fitch believes that U.S. credit card ABS issuers will likely stop charging over the credit limit fees and eliminate some interest rate increases. But, it is unlikely these changes will cause any negative rating actions due to generally stable performance and sufficient enhancement to absorb losses.

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Debit-Credit Transaction Gap Hits New Record

The gap between VISA and MasterCard debit card and credit card U.S. purchase transactions widened to a new record during the fourth quarter, topping one billion. During the final quarter of 2006, there were a total of 8.35 billion purchase transactions with debit cards making up 56% of the total. In 2005, VISA and MasterCard debit card purchase transactions first surpassed credit card purchase transactions on a full-year basis, 13.7 billion versus 13.5 billion, respectively. According to CardData ([www.carddata.com][1]), U.S. debit card purchase transactions hit 4687 million for 4Q/06, compared to 3657 million for 4Q/05. U.S. credit card purchase transactions rose from 3766 million for 4Q/05 to 3667 million for 4Q/06.

U.S. PURCHASE TRANSACTIONS
(in millions)
Period Debit Credit
1Q/05: 3132 2974
2Q/05: 3518 3329
3Q/05: 3501 3497
4Q/05: 3657 3766
1Q/06: 3741 3290
2Q/06: 4362 3383
3Q/06: 4487 3405
4Q/06: 4687 3667
Source: CardData (www.carddata.com)

[1]: http://www.carddata.com

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TNB to Credit/Debit Process for LA DOTD FCU

LA DOTD FCU of Louisiana has moved all of its credit card and debit card processing to Dallas-based TNB Card Services. The conversion covers 4,000 credit cards and 5,400 debit cards. LA DOTD Federal Credit Union has 15,500 members and assets of $85 million and serves the financial needs of the Louisiana Department of Transportation and Development employees and their families.

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House Democrats Target Minimum Payments

A group of nine U.S. Congressman yesterday introduced a bill requiring credit card issuers to fully disclose the impact of making minimum payments. The bill, titled the “Credit Card Repayment Act of 2007” was introduced by North Carolina Democratic Rep. David Price along with eight fellow Democrats. Under the Price bill, credit card companies would have to clearly outline the full cost of the minimum payment on a cardholder’s monthly statement and offer cardholders tools to help them pay off their debt. Specifically, the legislation would require companies to include a warning that making only the minimum monthly payment would increase the amount of interest paid; information on how long it would take and how much it would cost to pay off his/her entire balance if making only the minimum monthly payment; information on how much the consumer would have to pay per month if he/she wanted to pay off the balance in three years; and, a toll-free number that consumers could call for credit counseling.

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TransUnion Acquires it Entire Database

Chicago-based TransUnion reports it has acquired the last independently owned segment of its consumer credit reporting database. The Company, founded in 1968, says the acquisition makes its the first and only national credit reporting company to own its entire credit database, giving it total control over the quality, quantity and types of data housed in its system. The TransUnion database was the first online information storage and retrieval data-processing system to serve credit grantors nationwide. TransUnion employs more than 4,000 employees in more than 30 countries on six continents.

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Citi to Market AmEx Gift Cards

American Express has nailed its first gift card deal with a national bank. Citibank has agreed to sell the “American Express Gift Card” in more than 980 of its Financial Centers nationwide. The new cards will bear both the AmEx and Citi logos. AmEx launched its gift card product in 2002 and says it sold more “Gift Cards” last year than all previous years combined. The card is available in denominations ranging from $25 to $500 and is replaceable if lost or stolen for a fee. However, the card cannot be used at car rentals, cruise lines, casinos or ATMs. Citi recently announced the acquisition of prepaid market leader PA-based Ecount. Privately-held Ecount serves a base of more than 1,200 corporate clients across North America with paperless payment solutions including prepaid card solutions. In December, AmEx and eFunds inked a global, multi-year partnership wherein eFunds will provide processing services for the entire AmEx portfolio of prepaid cards. In November, AmEx has jazzed-up its gift card program, now offering extras at 20 retailers, restaurants and other partners, such as a free dessert, two games of bowling for the price of one, or 5% to 20% off the purchase of merchandise. (CF Library 11/29/06; 12/6/06; 3/2/07)

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Online Customer Interaction Improves

New Web site research reveals that Capital One ranked as the #1 site in online customer experience, Discover ranked the #1 site for online prospective customers/acquisitions and U.S. Bank ranked as #1 in online service levels. Bank of America was ranked second overall in the prospects study, and was the second most successful company in the acquisition category. The findings come from two studies conducted by Keynote Competitive Research involving more than 1,600 credit card customers interacting with nine leading credit card Web sites. Each of the studies captures more than 250+ metrics for each site-and provides competitive rankings in dozens of categories. Keynote also found that National City topped the rankings for reliability in the “Service Level Rankings for Credit Card Prospects,” which focused on the publicly available areas of the credit card sites. Keynote noted that credit card sites continue to improve year over year with reductions in outages, improvements in overall availability and load handling. However, several major credit card brands experienced major problems, such as 20 plus hours of outage and up to a 4% failure rate (customers unable to access their statement or pay a bill online) during the 30 day study of service levels. Keynote noted that credit card sites continue to improve year over year with reductions in outages, improvements in overall availability and load handling. However, several major credit card brands experienced major problems, such as 20 plus hours of outage and up to a 4% failure rate (customers unable to access their statement or pay a bill online) during the 30 day study of service levels.

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Security Innovation is QSAC PCI DSS Certified

MA-based Security Innovation has been certified as a “Qualified Security Assessor Company” for the “Payment Card Industry Data Security Standard.” To become a QSAC, Security Innovation sent employees to be trained and certified as Qualified Security Assessors (QSA) by the PCI Security Standards Council. Security Innovation can now conduct PCI assessments, as well as help clients prepare for assessments and address any problematic areas encountered. Security Innovation is an independent application security firm that offers education, risk assessment and risk mitigation solutions.

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Ecora Software Joins the PCI SVA

NH-based Ecora Software has joined the “Payment Card Industry Security Vendor Alliance.” As a member, Ecora will assist other vendors in educating the business community on the requirements and business value of the Payment Card Industry Data Security Standard (PCIDSS), a global benchmark intended to improve security throughout the entire payment card transaction process. Ecora provides enterprise-wide configuration data in easy-to-understand reports for regulatory compliance and enabling IT best practices. The PCI Software Vendor Alliance assists members of the payment card industry, composed of merchants, banks and point-of-sale vendors in educating the business community on the requirements and business value of the Payment Card Industry (PCI) Data Security Standard.

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OPC Powers Higher Education Payments

Official Payments Corpoartion is expanding payment processing services to 19 new U.S. college and university clients for credit card, debit card and electronic check acceptance via the Internet, telephone, kiosk and over-the-counter. OPC has relationships with Datatel and other top ERP systems providers in the higher education industry. OPC enables seamless integration with these ERP systems, as well as with legacy systems, for such services as viewing balances and making payments. OPC’s clients are comprised of nearly 2,600 federal, state, and local governments and agencies including the IRS, educational institutions, utilities and commercial clients.

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MiCash Prepaid MasterCard Partners with FSV

WA-based MiCash has partnered with FSV Payment Systems to market its “MiCash Prepaid MasterCard” which is issued by MetaBank. Through this partnership, MiCash will market the MiCash Prepaid MasterCard card through various distribution channels. This alliance offers immediate benefits with new, real-time tracking and financial reporting, along with processing technology. MiCash is a federally-licensed Money Service Business (MSB) that meets all state and federal laws, including Anti-Money Laundering, Bank Secrecy and USA PATRIOT Act regulations. FSV Payment Systems is a provider of host-based stored value and prepaid card solutions.

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