Citi’s Mandatory Arbitration Attacked

A broad coalition of nine civil rights and consumer groups have called for Citigroup to eliminate mandatory arbitration in sub-prime mortgage loans. Citigroup’s failure to stop requiring mandatory arbitration in its subprime loans knocks it out of alignment with Freddie Mac and Fannie Mae, the largest buyers of home loans in the country. Citigroup has reduced the number of abusive home loans and recently announced that it will not charge more than 3% in upfront fees. This announcement is a positive step, however it doesn’t change the fact that Citigroup has failed to end forced arbitration in its subprime mortgage loans. Many Americans sign loan contracts unaware that they contain mandatory arbitration clauses that will deny them access to justice. This has been very detrimental where it disproportionately puts homes at risk for elderly, low-income, and minority families.

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I-Advertising Continues to Set New Records

Online advertising revenue increased 43% in the second quarter to hit a record $2.37 billion. This is the seventh consecutive quarter of increases according to data gathered by the Interactive Advertising Bureau. The latest figures are above records set during the “dot com boom.” Credit card advertising has been rebounding slowly over the past two years. After being dominated by NextCard, Providian, and Capital One during the “dot com boom,” leading online card advertisers now include Citi, Chase, Bank One, Discover, and American Express. Meanwhile, all email advertising has been declining due to pending anti-spam legislation, according to the IAB.

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CardXX Issues a RAMP License

CO-based CardXX has issued a license to Innovatier to use its smart card “RAMP” technology and distribute products manufactured using the “RAMP” process. Innovatier will pay CardXX a licensing royalty of 5% of the final assembly cost for each unit produced and sold. Innovatier is expecting to sell about 400,000 units each month. The CardXX process offers advantages including the injection of a thermoset polymer, a low temperature and pressure process, and superior heat and chemical resistance. CardXX uses Reaction Assisted Molded Process (RAMP) to manufacture and license secure and intelligent Smart Cards to provide secure encapsulation of advanced electronics.

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Direct Mail is Inviting not Intrusive

While the marketing industry has been hard hit by do-not-call registries, Internet SPAM laws, and TiVo, direct mail is alive and well. Draft, a marketing services agency, says consumers are wielding unprecedented control over their relationships with marketers. Draft says direct mail prevails over other channels because it is inviting, not intrusive. Also the Internet is not direct mail’s enemy. Draft says direct mail and the Web create a powerful bond with the consumer, stronger than either can do separately. Almost 33% of people surveyed said they respond to direct mail by going online. Draft noted that in today’s world, the “mail moment” (that time people take each day to go through their mail), makes a connection like no other.

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Fair Isaac to Acquire Braun Consulting

Fair Isaac has signed an agreement to acquire Chicago-based Braun Consulting for a net cash value of $30 million. As part of the deal, Braun’s senior management team, including founder and CEO Steven Braun will remain with Fair Isaac. Fair Isaac plans to leverage Braun’s consulting practice to help executives who have a stake in the success of marketing efforts set the strategic context and direction for results-oriented “Precision Marketing” initiatives. Fair Isaac also expects that Braun’s technology integration experience will help ensure customers realize the greatest benefit from its “Precision Marketing” solutions. The deal is expected to close in the fourth quarter.

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Deluxe ID TheftBlock is Released

Deluxe Financial Services has introduced “Deluxe ID TheftBlock” which enhances traditional identity protection tools by adding check order screening, daily credit monitoring, access to fraud resolution assistance, and a comprehensive membership kit. Deluxe ID TheftBlock helps Deluxe fulfill its commitment to satisfying consumers and financial institutions. Deluxe ID TheftBlock enrollment is easy for consumers and requires minimal involvement from financial institutions. It offers consumers the option of mail or e-mail notifications of unusual credit activity. Deluxe ID TheftBlock will generate more revenue for financial institutions in addition to minimizing fraud, increasing security, and improving consumer satisfaction. Deluxe offers checks and similar products to enhance consumer satisfaction, strengthen check program security, increase revenue, and improve efficiency.

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Catalina Sells Direct Marketing Business

FL-based Catalina Marketing has sold its direct mail division to Valassis. The transaction supports Catalina Marketing’s strategy to focus on proprietary applications delivered at the point-of-sale while enhancing Valassis’ 1-1 direct mail business. The 1-1 direct mail business offered by both companies specializes in direct mail that is targeted based on consumer purchase behavior and lifestyle changes of consumers. Catalina Marketing combines insight into consumer behavior and consumer access, enabling marketers to execute behavior-based marketing programs. Listed as one of Fortune magazine’s “Best Companies to Work For” for seven years in a row, Valassis offers a range of marketing services to consumer packaged goods manufacturers, retailers, technology companies, and other customers. It has operations in the U.S., Europe, Mexico, and Canada.

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VISA CEO Says AmEx Has Product Problems

VISA’s top executive this morning predicted that VISA will, for the first time, unseat American Express in small business market share during the first quarter due to signed deals in the pipeline. CEO Carl Pascarella also said that no matter what happens with VISA’s appeal to the U.S. Supreme Court, American Express always loses. Pascarella says AmEx has flawed products and competes against itself. He said VISA is competing with cash and checks, while everyone else, particularly AmEx, is competing with VISA. Pascarella said AmEx’s share in the small business market shrank from 75% in 1997 to 41% last year. VISA’s small business market share is currently 39%.

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Ctrip and CMB Launch a Dual-Currency Credit Card

A major consolidator of hotel accommodations and airline tickets in China has teamed with a China-based commercial bank to launch the country’s first dual-currency international travel credit card. The new card introduced by Ctrip.com International and China Merchants Bank
also offers access to Ctrip’s customer reward program and up to 30%-50% discounts at approximately 3,000 specified merchants in all major cities in China. Cardholders can use the travel credit card to book hotels in China and abroad, air-tickets and packaged-tour products, and settle the payments in either RMB or U.S. dollars.

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RBS Becomes the 3rd Largest Merchant Acquirer

The Royal Bank of Scotland has become the third largest merchant acquirer in the world after completing its acquisition of Atlanta-based
Lynk Systems for $525 million. RBS’ interests also includes Citizens Bank, one of the 10 largest commercial holding banks in the USA. Lynk is considered the 6th largest non-bank acquirer and the 9th largest merchant acquirer in the U.S. market. In addition, Lynk is the 3rd largest processor of ATMs in the USA.

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