LifeLock Offers a Proactive ID Theft Fighter

Scottsdale, Arizona-based LifeLock has launched a proactive identity theft protection service for consumers that places alerts on credit bureaus, stops pre-approved credit card applications, and monitors credit files. LifeLock guarantees the effectiveness of its system by offering up to $25,000 in reimbursement for any cash losses if an identity is compromised while a LifeLock customer. The company will also resolve any credit issues, no matter the cost or hours, at LifeLock’s expense. Last year, nearly 10 million people were victims of some form of identity theft. Losses to victims and businesses last year exceeded $50 billion.

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Chargebacks Threaten European E-Commerce

A recent report by a German firm has found that even though the average chargeback ratio in European e-commerce seems to be quite low at only 83 basis points, there are significant concerns revealed in a more thorough analysis. Pago says the share of chargebacks resulting from manipulated credit card data has risen from just over 4% in 2003 to more than 7% in 2004. Pago believes the overall increase is due to a rise in organized credit card fraud. The report also found that the relationship between chargeback ratio and shopping cart value has deteriorated. Whereas the chargeback ratio for transactions of under 10 Euros is only 28 basis points, transactions over 500 Euros carry a 371 basis point chargeback ratio. The research was based on 20 million real purchase transactions processed through the Pago platform last year.

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Ceridian Names a New Finance Executive

Minnesota-based Ceridian has named Randy Strobel as its new VP/Finance and Controller. Strobel brings more than 15 years of financial management experience to Ceridian. He formerly was vice president of finance for Minneapolis-based Mesaba Aviation, Inc. He will be responsible for managing Ceridian’s internal and external accounting and reporting processes. Ceridian Corporation provides information services and human resources outsourcing.

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Chase Intros Ultimate Sports Fan Rewards

Chase and three major league baseball teams have partnered to launch the “Ultimate Fan Rewards Program.” The Arizona Diamondbacks, Detroit Tigers and San Diego Padres have added the programs to their respective cobrand cards. Chase says it plans to announce more sport team partners for the new program. The “Ultimate Fan Rewards Program” offers cardholders exclusive sporting event experiences, memorabilia and other merchandise. Cardholders earn one point for each dollar charged.

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BJ’s Settles FTC Charges of Lax Security

BJ’s Wholesale Club has inked a settlement with the FTC over charges it failed to take appropriate security measures to protect the credit and debit card information of thousands of its customers. The FTC says millions of dollars of fraudulent purchases were made as result of BJ’s lax security which became evident early last year. Since then, banks and credit unions have filed lawsuits against BJ’s and pursued bank procedures seeking the return of millions of dollars in fraudulent purchases and operating expenses. BJ’s recently reported that outstanding claims total about $13 million. BJ’s says it took immediate steps to address the situation in early 2004 and that no conclusive evidence of a breach was found. However, it issued a public statement in March 2004 alerting consumers to the potential issue, and recently agreed to the settlement with the FTC without an admission of either any wrongdoing or that the facts in the FTC draft complaint are true. The FTC settlement requires BJ’s to establish and maintain a comprehensive information security program and to obtain a security audit every other year. The FTC is seeking public comment on the proposed settlement. BJ’s operates 150 warehouse stores and 78 gas stations in 16 states.

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No Borders Lands a Seasoned Exec as COO

Los Angeles-based No Borders has hired Randy Gutierrez, former executive at Wells Fargo Bank and BankServ, as COO. Gutierrez joins No Borders with more than 20 years financial payment systems experience in domestic and international money transfer systems and operations, automated clearing house systems and operations, and credit card, bill payment and remittance systems. Mr. Gutierrez spent 15 years with Wells Fargo Bank in a variety of management positions and has spent the last 8 years with BankServ, a San Francisco based electronic payments company. No Borders provides a debit and stored value card programs for residents of developing countries and to immigrants in the US to send money back home on a regular basis.

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Discover Spin-Off May Spin-Out Next Week

The announced departure this week of Morgan Stanley’s Chairman and CEO may give the investment bank reason to reconsider its planned spin-off of Discover. Analysts are also pointing out that Discover may drain more capital than expected from its parent in order for it to operate as a stand-alone entity. The proposed spin-off will be reported on and evaluated by the MS board on Tuesday. MS will report second quarter earnings on Wednesday. (The Company expects its second quarter earnings to be approximately 15% to 20% below 2Q/04.) The Wall Street Journal this morning reports that since April, MS has been meeting with credit-rating companies to determine how best to structure and capitalize Discover but hasn’t provided significant details as how the unit will do that. Earlier this week, Chairman and CEO Philip Purcell announced he will retire no later than March of next year, citing continuing personal attacks and the level of negative attention that the Company has drawn as reasons for leaving. On April 4th, after extraordinary shareholder pressure, the MS board gave management the green light to the pursuit of a spin-off of Discover Financial Services. Discover’s market value has been estimated between $10 billion and $15 billion. (CF Library 4/5/05; 6/13/05)

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PSCU Plans 4 Card Meetings for Members

PSCU Financial Services announced four regional meetings to help its member-owners focus on building successful credit and debit card programs with the first scheduled for Honolulu on August 5th. The meetings will discuss “how to” tactics for segment marketing, activation and growth strategies, ways to combat fraud and new technologies that provide enhanced cardholder service. These meetings will be free to member-owners. PSCU Financial Services is the nation’s largest Credit Union Service Organization (CUSO). As a non-profit cooperative, the company is owned by more than 500 member credit unions nationwide.

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First Data and Fidelity Team for HELOC Cards

First Data and Fidelity Information Services have struck an alliance to integrate FDC’s credit card processing capabilities with HELOCs serviced on Fidelity’s “Mortgage Servicing Package” software. The joint credit card offering will support data exchanges between MSP and FDC’s system for the purpose of setting up, maintaining, enabling transaction flow and posting and reporting on credit card-enabled HELOCs. PHH Mortgage has become the first client of the credit card processing option for HELOCs serviced on MSP. The standard HELOC subsystem to MSP, including the optional credit card processing component, is targeted for completion in the second half of 2005.

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Kreditkort Selects webMethods Fabric for Cards

Kreditkort has chosen webMethods “Fabric” to integrate its
various credit card management systems and to provide the
foundation of a “Service-Oriented Architecture.” webMethods provides
business integration software to integrate, assemble and optimize
available IT assets to drive business process productivity. Kreditkort
is a principal member of MasterCard in Iceland and is owned by the
Icelandic banking community. Kreditkort acquires MasterCard, Maestro,
American Express, Diners and JCB card transactions from domestic and
international merchants.

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CO-OP Network’s New CEO Takes Over from Rose

The CO-OP Network has named Stanley Hollen, former president/CEO of Liberty Enterprises in Minnesota and long-time CEO of The Golden 1 Credit Union in Sacramento, as its new CEO. Hollen’s entire professional career has been spent in the credit union arena, first serving on a credit union board at age 19. When he became Golden 1 CEO in 1984, the credit union had $295 million in assets; upon his departure in 2002, the organization boasted an asset base of nearly $4 billion — and 13 executives from his management team had become credit union CEOs. Most recently at Liberty, Hollen led a company-wide diversification of its product lines to be more attuned with technology. CO-OP Network is wholly-owned by its credit union shareholders with 1,793 credit union members, 20,000 surcharge-free ATMs, 92 million-plus monthly transactions and 23 million cardholders.

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APR CARD DEBT

Credit card balances edged higher in April to a record A$30.6 billion,
a 13.6% gain over year-ago levels. However, gross dollar volume on
credit cards remained sluggish, up 8.3% compared to April 2004 and well
below last April’s year-over-year growth rate of 13.2%. Credit card
volume has been impacted by new rules that give merchants the right to
charge their merchant fees to consumers. Credit card balances at the end
of March were A$30.3 billion, compared to A$30.3 billion in February,
and A$26.7 billion for March 2004. Gross dollar volume on credit card
and charge cards in April of A$13.0 billion was A$800 million less than
the prior month, but up more than A$900 million from one-year ago.
Based on data from the Reserve Bank of Australia, consumers charged
A$12.1 billion in purchases on credit/charge cards during April,
compared to A$11.1 billion one-year ago. Card credit limits reached
A$84.6 billion at the end of April, compared to A$74.7 billion for April
2004. There are currently 11.9 million credit card and charge card
accounts in Australia, compared to 11.2 million one-year ago.

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