Court Shuts-Down a Canadian-U.S. Card Scam

The FTC reports that a federal district court has ordered a Montreal-based telemarketer, with a Nevada-based affiliate, to end cold-calling U.S. consumers and selling nonexistent credit cards for as much as $299. The defendants used an Automated Clearing House system to electronically debit fees from consumers’ bank accounts. The promised credit cards were never delivered. Charging an advanced fee for a credit card is illegal. The settlement announced that the defendants are prohibited from misrepresenting their ability to arrange for major credit cards for consumers and requires them to pay redress. The court order contains a $6,546,126 suspended judgment that will have to be paid if the court finds that the defendants misrepresented their financial situation.

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C-Store POS Terminals Integrate Lottery

Dallas-based Retalix USA has teamed with GTECH to launch the first integration of a Web-browser lottery application into a clerk POS touch-screen application in the USA. As the new GTECH “Lottery Inside” browser-based online lottery solution can run on standard POS hardware – the new interface between Retalix’s “StorePoint” and GTECH allows the cashier to complete a versatile sales transaction which may include C-store items, fuel, and lottery, as one transaction, on a single POS device, thus simplifying sales processes, cutting down on time and space, and speeding up checkout. Until recently, online lottery ticket sales required a dedicated lottery terminal at a retail location. With the “Lottery Inside” technology, retailers can sell online lottery tickets through their existing in-store POS system.

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Exxon Takes a $550MM Charge Over Card Fees

Exxon Mobil confirmed it will take a $550 million after-tax charge for the third quarter after the U.S. Supreme Court, decided to let stand most of the verdict in a class-action lawsuit involving credit card fees. A group of Exxon dealers filed a lawsuit in Florida in 1991 alleging that with the 1982 adoption of the “Discount for Cash” program, Exxon had not reduced its price to the dealers by an amount which, on average and over time, would offset the costs of credit card processing fees. Prior to “Discount for Cash,” the cost of credit was included in the price charged to the dealers. In 2001, the dealers won a $500 million verdict. According to the lawsuit, Exxon charged dealers a 3% credit card processing fee on all gasoline purchases. The company initially reduced wholesale fuel prices to offset the card fees, but ended the practice six months later without the knowledge of the dealers. Last week, the Supreme Court decided to review only one of the issues raised by ExxonMobil in the Allapattah case.

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Ultima Card to Use EmpaSys Reload Platform

Orlando-based American Card Services is now using the “EmpaSys” Internet platform to load value on its “Ultima Card.” Check cashers and merchants can enroll in the EmpaSys™ bill payment program when they visit www.payallbillshere.com. Participants can load value onto Ultima Card(TM) cards and enable customers to pay their bills electronically. ACS, Holdings, Inc. markets the Ultima Card(TM) Twin Access Debit Card Pack(R), which provides two reloadable stored-value debit cards along with the ability to receive two Ultima Card(TM) Debit MasterCard(R) cards at no extra cost with a valid ID.

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BofA Card Income Up 9%; Receivables Top $55B

Bank of America added $3.4 billion in credit card loans during the third quarter ending with $55.4 billion, a 6.5% sequential gain. The issuer opened 1.6 million new credit card accounts, and card income grew 9% over the prior quarter. BofA says the strong account growth was driven by targeted direct mail marketing campaigns, strong co-brand programs, effective cross selling of cards in banking centers, and improved point of sale technology. Third quarter charge-offs were 5.48%, compared to 5.88% in the prior quarter, and 5.33% one year ago. Managed 30+ day delinquency was 4.11%, compared to 3.86% in the second quarter, and 3.84% for 3Q/03. Managed 90+ day delinquency was 1.88%, compared to 1.76% in the second quarter, and 1.76% for 3Q/03. BofA also reported that active users of online banking increased by 600,000 to 11.8 million while bill payment volume increased to more than $23 billion in 3Q/04. For complete details on Bank of America’s 3Q/04 performance visit CardData ([www.carddata.com][1]).

BOFA CARD LOAN HISTORICAL
1Q/03 $29.1 billion
2Q/03: $30.8 billion
3Q/03: $33.6 billion
4Q/03: $36.6 billion
1Q/04: $37.3 billion
2Q/04: $52.0 billion
3Q/04: $55.4 billion
Source: CardData (www.carddata.com)

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

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Travelocity Hotel Program in Europe

Travelocity has expanded its specially negotiated hotel rates to Europe. The program is being introduced in the United Kingdom first and will extend to other European countries. Travelocity displays the rates and availability of more than 60,000 hotels around the world, and more than 13,000 of these participate in the company’s net rate hotel program. The Company uses the “Sabre GDS” with technology that enables two-way communication between it and a hotel’s internal reservations system. Travelocity pays its net rate hotel suppliers by credit card, putting cash into the hands of hoteliers faster than its competitors.

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CyberSource Transactions Rise 52% Over 3Q/03

Electronic payment specialist, CyberSource, reported third quarter revenue of $9.2 million, an increase of 33% over 3Q/03. The Company processed a record 109.4 million transactions during the quarter, a 52% increase over the 72.2 million transactions processed in the same period last year. The company added 1,607 customers in the third quarter, compared to 648 in the second quarter. CyberSource signed 17 customers for its “Global Payment Suite” since the program launch, 12 of which are already processing transactions. CyberSource solutions enable electronic payment processing for Web, call center/IVR, and POS environments and manage fraud risk associated with card-not-present transactions. For complete details on CyberSource’s third quarter results visit CardData ([www.carddata.com][1]).

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

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Maximum Dynamics Launches EFT Processing

Maximum Dynamics has launched a new service offering EFT bank transaction processing, pre-paid voucher services (cellular, telephone, utilities, etc.) and loyalty program applications all on one terminal running through its own back-end system. Its mobile commerce business unit began in October 2003 when Maximum entered into the point of sale business by securing exclusive distribution rights for a mobile point of sale terminal called “MPOS2002.” Since then, Maximum has worked to put in place all of the components required to offer an end-to-end offering in South Africa. Maximum is initially targeting corporate retailers where establishing a footprint quickly will lead to volume levels that enable Maximum to set extremely favorable pricing.

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MasterCard’s Dunbar on the EDS Board

EDS announced that Roy Dunbar, MasterCard International’s president of Global Technology and Operations, has been elected to its board of directors, effective October 19th. Dunbar is responsible for MasterCard’s global payments platform and operations. Dunbar enjoyed a 14-year career with Indianapolis-based Eli Lilly and Company prior to this appointment. He has been recognized by his accomplishments by being named “Chief Information Officer of the Year” in 2003 by InformationWeek and one of 2002’s “20 Young Executives You Need to Know” by Business 2.0. Dunbar holds a pharmacy degree and a master’s of business administration degree from Manchester University in the United Kingdom. EDS is a provider of broad portfolio of business and technology solutions. It ranks 87th on the Fortune 500 with more than $20 billion in annual revenue.

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MedSmart Combines Eligibility & Payments

IL-based Abanco Healthcare Solutions has introduced “MedSmart” which integrates real-time eligibility verification and patient payment transactions. Physicians will be able to access over 300 payers within a secure HIPAA-compliant environment with the implementation of MedSmart. Additional benefits include reduced denied claims, an easier patient registration process, and live 24/7/365 support, to name a few. MedSmart is available through Abanco Healthcare Solutions, Inc., a leading provider of payment processing solutions that develops and markets services to the automotive, healthcare, hospitality, insurance, retail, and transportation industries.

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Metavante Acquiring VECTORsgi for $100MM

Metavante is acquiring TX-based VECTORsgi, a provider of banking transaction applications, including electronic check-image processing and image exchange, item processing, and dispute resolution and e-commerce solutions for financial institutions and corporations, for $100 million. The company will continue to operate under the VECTORsgi name and will become a wholly owned subsidiary of Metavante Corporation. VECTORsgi technology is used by each of the top 10 and 41 of the top 50 financial institutions in the U.S. Earlier this year, Metavante acquired Advanced Financial Solutions, another company that specializes in providing electronic check-imaging technology. Paul T. Danola, senior executive vice president and group executive of Metavante Financial Services Group, says that offering solutions from VECTORsgi and Advanced Financial Solutions provides the industry a single provider in Metavante that supports the industry’s transition from paper check exchange to the electronic realm. Metavante Corporation serves financial services firms and businesses around the world by delivering banking and payment technologies.

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GECF Creates the Specialty Retail Group

GE Consumer Finance-Americas has created the “Specialty Retail Group” to provide private label and co-branded credit programs to apparel and accessory, home goods, and other growing specialty retailers with portfolios of up to $200 million. The new business unit is part of GE Consumer Finance’s Retail Consumer Finance division, a provider of retail credit card services to retailers in the U.S. and Canada. The new division will have over 200 dedicated employees with Paula Clayton serving as vice president and general manager. The team will provide marketing research, planning and execution support, integrated co-brand and loyalty programs, and customer service that is brand-specific. The Specialty Retail Group is expected to be a key contributor to private label credit program growth for GE Consumer Finance. GE Consumer Finance is a leading provider of credit services to consumers, retailers, and auto dealers in 41 countries around the world and has $122 billion in assets.

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