BSP Takes on Abusive Credit Card Practices

The Monetary Board of Bangko Sentral ng Pilipinas has approved new rules to stop what it calls “excessive practices” by credit card issuers. The new rules will also extend to affiliates that are not currently regulated by the BSP. The “excessive practices” include abusive treatment by collection agents, poor disclosure of foreign transactions fees, and deceptive marketing of lower interest rates.
The BSP reports that credit card outstandings were P57.7 billion as of March 31st, a 20% increase over the year ago period.

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Fifth Third to Use SMARTS InCharge for its ATMs

Fifth Third Bank has selected SMARTS “InCharge” to monitor and conduct root cause analysis of its authorization system along with the 14,000 ATMs serviced by Fifth Third across the nation. Fifth Third will use SMARTS’ automated business assurance solutions including the InCharge Service Assurance Manger, the IP Availability Manager, the Business Impact Manager, and the Application Services Manager. Fifth Third Bancorp is a financial services company that has $95.6 billion in assets and operates17 affiliates with 1,000 full-service Banking Centers. SMART(R) solves IT management problems using innovative technology. InCharge™ solutions are used by thousands of customers all over the world to resolve problems with IT management.

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E4X Names a New SVP/Sales and Marketing

NYC-based E4X, a multi currency services provider, has named Michael DeSimone, formerly with Travelex, Citibank, and Thomas Cook, as SVP/Sales and Marketing. Mr. DeSimone has over 17 years of experience with foreign exchange services and international payments. As the new SVP, he will lead the company’s sales and marketing strategy. DeSimone has worked closely with organizations such as Visa, JP Morgan Chase, Bank of New York, and the Royal Bank of Scotland prior to his role at E4X. E4X, Inc. is a provider of multi currency services that facilitates global business by minimizing the problems associated with currency conversion related to cross border sales and payments.

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Bhutan National Bank Signs JCB Acquiring License

Thimphu-based Bhutan National Bank has signed an agreement to become the first JCB acquiring licensee in Bhutan. JCB says 25% of foreign visitors to Bhutan are Japanese. With this agreement, the JCB brand will be phased in at all the bank’s merchants starting this month. With the addition of Bhutan, the JCB brand is now accepted in 190 countries and territories around the world. Its merchant network includes 11.7 million merchants. Bhutan is located on the southern slopes of the Himalayas.

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OneBridge Hires a Former ACI Sales Executive

Indianapolis-based card processor, OneBridge, has hired Spencer Lewis, formerly of ACI Worldwide, as VP/Sales. Lewis will spearhead the effort to create and strengthen the infrastructure required to support a sales organization focused on customers. He will be responsible for the development and management of sales objectives along with the delivery of innovative solutions to OneBridge clients and prospects. Lewis will also serve on the organization’s leadership team. He brings over 18 years of experience providing EFT solutions to financial institutions. OneBridge provides financial institutions with comprehensive card processing solutions to maximize credit and debit card programs.

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Bobcards to Introduce Tiered Interest Rates

Bank of Baroda’s Bobcards subsidiary is gearing up to introduce tiered interest rates on their credit cards. The move is in retaliation to recent rate reductions by ICICI Bank and Standard Chartered Bank. The new rates charged will be adjusted by the age of the card purchases. The lowest rate would apply to purchases up to 90 days old. The next higher rate will apply to the 90-120 day period, and the highest rate would apply to purchases over 120 days old. Bobcards’ current interest rate is 2.25% per month. Bobcards indicated the new tiered rates would be less than the current flat rate. Standard Chartered Bank recently cut its credit card interest rate to 1.99% per month. ICICI Bank also lowered its interest rate to 0.99% per month for its secured credit card.

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Vecchione Replaces Retiring Wright as MBNA CFO

MBNA Corporation has named Kenneth Vecchione as the new CFO effective September 30th. He currently serves and will continue to serve as CFO of MBNA America Bank. Vecchione succeeds Vernon Wright, who is retiring December 15th. Wright will continue as a director of MBNA America Bank and will advise MBNA. Vecchione joined MBNA America Bank in 1998 as division head of finance, responsible for accounting and tax, corporate and strategic planning, and financial operations, and financial planning.

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Slow Rewards Programs Experience High Attrition

Credit card reward programs that take a long time to accumulate points do not work well according to a new report. The research showed that 70% of cardholders leave a loyalty/rewards program due to the length of time it takes to build up points. Maritz Loyalty Marketing says the number jumps to 79% in the 18-24 age group. The Maritz Poll also found that customer defection resulted from other perceived problems with rewards programs, such as: “not being rewarded properly” (23%), “disliked the fee” (22%), “disliked the reward options” (20%), “program rules kept changing” (17%), “poor customer service” (16%) and “other programs seemed better” (18%). More than a quarter of this high-income cardholders left a rewards program because “another company’s program seemed better” or they didn’t like the reward options.

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OCC Concerned About Unfair Credit Card Practices

The OCC has issued an advisory citing concerns over what it calls unacceptable credit card practices that may constitute unfair or deceptive acts, potentially exposing a national bank to compliance issues. The regulator specifically listed as problem areas, inadequate disclosure of penalty pricing policies, promotion of unrealistic “up to” credit limits, and, insufficient disclosure of the limitations of promotional rates. The OCC said banks should disclose fully and prominently in promotional materials the circumstances under which the credit card agreement permits the bank to increase the consumer?s cost, or that the issuer can make the changes unilaterally. The OCC also said banks should not advertise maximum credit limits to sub-prime consumers when most applicants receive a significantly lower default credit line. The OCC also criticized sub-prime issuers who advertise the possible uses of the card when the initial available credit line is likely to be so limited that the advertised possible uses are substantially illusory. Additionally, the OCC said that banks need to disclose fully and prominently any material limitations on the applicability of promotional rates, and not make representations that create the impression that material limitations regarding the applicability of the promotional rate do not exist. The OCC also suggested that some issuers have not properly disclosed fees connected to promotional pricing.

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Sharenet Selects Fiserv EFT/CNS to Operate its ATMs

Liverpool, NY-based Sharenet, a local cooperative of 28 credit unions, has selected Fiserv EFT/CNS to operate its 61 ATMs. The agreement calls for Sharenet credit unions to select their own transaction processor. Sharenet provides surcharge-free access for members and the lowest surcharge fees for non-members of any ATMs in Central New York. Sharenet ATMs can be used by non-credit union ATM users to save on surcharge fees. Non-credit union ATM users can also join a participating credit union to enjoy fee-free access. Fiserv EFT/CNS serves 3,000 client endpoints across the nation. EFT/CNS operates over 16,500 ATMs, processes an estimated 360 million ATM and debit transactions per month, and is one of the largest electronic funds transfer processors in the U.S. Fiserv, Inc. is a provider of information management systems and services to the financial industry. It serves over 15,000 clients worldwide. Fiserv reported $2.7 billion in processing and services revenues for 2003.

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