Court Approves CIBC Foreign Exchange Settlement

CIBC has received court approval of a settlement of a class action brought on behalf of CIBC VISA cardholders in respect of foreign exchange transactions. The card issuer began publishing notices in 28 newspapers over the weekend. Under terms of the settlement, announced in late August, CIBC VISA cardholders will be getting up to a $14 credit by year end. CIBC agreed to a settlement of $16.5 million, plus $3 million to plaintiffs’ counsel, and to pay the costs of notification, administration and distribution of the settlement funds. Up to $13.85 million will be paid directly to cardholders in December as credits ranging from $.72 to $14.32. The plaintiffs, represented by Paul Pape and Harvey Strosberg, had alleged that the conversion of transactions from a foreign currency resulted in an undisclosed or inadequately disclosed mark up. This mark up was added to the VISA International wholesale conversion rate to obtain the Canadian dollar equivalent for foreign transactions. Similar lawsuits are pending in the USA.

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AmEx Extends Double SkyMiles to All Purchases

American Express has launched a nationwide promotion that will give “Delta SkyMiles” credit cardholders double miles on all eligible retail purchases made through November 15th. To take part in the promotion, cardmembers must enroll their Delta SkyMiles Credit Cards at http://www.americanexpress.com/deltaenroll or call 1-800-227-7081 by November 15. Each year, through the card’s unique Always Double Miles(R)(ii) feature, Delta SkyMiles Credit Cardmembers earn two SkyMiles for every eligible dollar charged to the card for purchases at stand-alone supermarkets, gas stations, drugstores, the U.S. Postal Service, wireless phone bills, and Delta Air Lines. American Express Company is a worldwide travel, financial, and network services company. It is a world leader in charge and credit cards, Travelers Cheques, travel, financial planning, business services, insurance, and international banking.

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CFC Introduces a Full Face Hologram Card

Chicago-based CFC International has introduced a full face holographic patterned laminate for transaction cards including credit cards, debit cards, ATM cards, gift cards, security cards and ID cards. The new patent-pending “HoloLam Plus” card offers the ability to effectively build in a variety of layers of security features such as registered holography and security inks, making it difficult for counterfeiters. CFC says “HoloLam Plus” is print receptive, process-friendly and available in rainbow, stock and custom holographic patterns. In addition to holographic patterns, “HoloLam Plus” is also available in brushed, woodgrain, or marble patterns. CFC’s “HoloLam” is a family of clear, holographic, and metalized films. CFC plans to display the card at next month’s “Cartes 2004” show in Paris. CFC also operates facilities in London and Goppingen, Germany.

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TCF Debit Concerns Muted as Revenues Climb

MN-based TCF Financial reported last week that debit card revenues were up 26% during the third quarter due to a 16% increase in off-line sales volume coupled with a 7% increase in the average off-line interchange rate. During the second quarter, TCF’s debit card revenues were only up 9%, as a 19% increase in off-line sales volume was partially offset by a 12% decline in the average off-line interchange rate. The average off-line interchange rate of 1.44% during the second quarter was up 12 basis points from the first quarter primarily due to the new interchange rates established by VISA, effective February 1st. Last year, TCF publicly objected to VISA’s debit card settlement over future revenue concerns. In May 2003, TCF filed a “motion to intervene” with Federal district court Judge John Gleeson over the proposed debit card settlement. The next month, Gleeson dismissed TCF’s objection for lack of merit. In August 2003, TCF disclosed a letter from VISA to the Wall Street Journal concerning a VISA bylaw that established exit fees for top debit card members. TCF reportedly explored the possibility of leaving VISA but said it will face a $20 million exit fee if it did so. (CF Library 5/14/03; 6/17/03; 8/5/03)

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Fifth Third Lands the Holloway Card Contract

OH-based Holloway Group has signed a five-year contract with Fifth Third Bank Processing Solutions for credit card processing. Holloway Sportswear manufactures and markets unique outerwear and sportswear in the apparel marketplace. According to Rich Schneider, Controller of the Holloway Group, Inc., Fifth Third’s complete package lowered their total costs of offering a credit card payment option to their customers. Fifth Third Bank Processing Solutions processes over nine billion ATM and POS transactions per year. It serves over 207,000 retail locations and 1,351 financial institutions around the world, processing $100 billion in credit card sales. As of April 2004, according to The Nilson Report, Fifth Third Bank is the fourth largest bankcard acquirer.

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MARTA & Cubic Unveil the Breeze Smart Card

Atlanta-based MARTA and San Diego-based Cubic Transportation Systems unveiled the new “Breeze” smart card-based ticketing system, which enables commuters to travel seamlessly throughout Atlanta using one common smart card to pay for rail, bus, paratransit fares, park-and-ride fees, and potentially, event ticketing, retail purchases, and security access. Cubic is making the new smart card-only multi-modal fare collection and revenue management system under a $72.5 million contract that they obtained last year. MARTA’s new system will offer commuters, public transit users, and tourists a convenient means of travel while increasing revenues and operational efficiency for the agency. Cubic has delivered more than 400 projects in 40 markets on five continents. Each year, almost 10 billion rides are taken all over the world using Cubic fare collection systems.

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Amex Travel’s Warner to Head Vacation Express

NC-based RCG Companies has hired Dennis Werner, a 25-year veteran of Amex Travel, as president & CEO of its Vacation Express subsidiary. Mr. Werner was a creator and builder of businesses and grew the southern region of Amex Travel to a multi-billion dollar revenue business. He oversaw over 2,500 employees and was responsible for all profit and loss activities as Senior Vice President and General Manager. According to Michael D. Pruitt, CEO of RCG Companies, Werner is recognized as one of the great business builders within the travel industry. RCG Companies, Inc. focuses on delivering rapidly growing, low-risk revenues, and increasing earnings per share to its shareholders. The majority of RCG’s revenues are derived from its wholly owned travel service organizations, SunTrips(R) and Vacation Express(R).

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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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