NCO Group Shells-Out the Largest FCRA Fine

PA-based NCO Group, one of the nation’s largest debt-collection firms, this week agreed to pay $1.5 million to settle FTC charges that it violated the FCRA by reporting inaccurate information about consumer accounts to credit bureaus. It is the largest civil penalty ever obtained in a FCRA case. The FTC charges that NCO reported accounts using later-than-actual delinquency dates. “Section 623(a)(5)” of the FCRA requires the actual month and year the account first became delinquent to be noted, in order to measure the maximum seven-year reporting period the FCRA mandates. Violations of this provision are subject to civil penalties of $2,500 per violation. Under terms of the settlement, NCO is also required to implement a program to monitor all complaints received to ensure that reporting errors are corrected quickly.

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Catuity Seeks Strategic Partners after its Target Loss

Australia and Detroit-based Catuity yesterday confirmed it will begin to either sell or exclusively license its patented off-line smart card loyalty technology as the company focuses solely on the growing market for online loyalty and other retail POS software and service solutions. The developer of loyalty software for retailers and their partners was significantly affected by Target’s recent decision to phase-out its smart card loyalty feature on its VISA program. Despite the setback, Catuity expects to achieve profitability by 2006 or sooner, if a merger occurs. Catuity plans to leverage its experience in developing POS-focused applications to tap into existing budgets of retailers for loyalty and other applications which are managed from the point of sale. For the first quarter, the company reported revenue of $479,000, compared to first quarter revenue in 2003 of $1,475,000. The Company posted a net loss of $604,000 for the first quarter, compared to a profit of $305,000 for 1Q/03. For complete details on Catuity’s 1Q/04 performance visit CardData (www.carddata.com).

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Canadian Tire’s Options MasterCard Up 26% in Q1

Since surpassing the $1.4 billion in credit card outstandings milestone in the second quarter of last year, Canadian Tire Financial Services reported that card loans were up 26% year-on-year to $1.7 billion for the first quarter of this year, and up 64% since the first quarter of 2002. More than 95% of CTFS’ card portfolio is now comprised of “Options MasterCard” accounts. Financial Services’ goal for 2004 is to achieve gross ending credit charge receivables of $2.0 billion. CTFS reports it had $19 million in adjusted earnings before income taxes for the first quarter, a 22.6% increase over 1Q/03. CTFS says that increasing average balances represents the most significant opportunity to improve Financial Services’ earnings this year. The industry average balance at the end of 2003 for standard bank credit cards was $1,347. The average CTFS balance is running at $970 for the first quarter of 2004, compared with $789 for the first quarter of 2003, and $598 for the first quarter of 2002. In the first quarter of 2004, the average number of credit card accounts with a balance increased by 2.4% and average balances per account were 23% higher compared with the same period of 2003. For complete details on Canadian Tire Financial Services’ 1Q/04 performance visit CardData (www.carddata.com).

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Fifth Third Lands Wendy’s Processing Contract

Wendy’s International has chosen Fifth Third Bank Processing Solutions as its preferred credit card processor for its corporate and franchise locations throughout the USA with Hypercom also offering its terminals to Wendy’s business locations. Fifth Third Bank Processing Solutions is currently processing Visa(R), MasterCard(R), American Express(R) and Discover(R) credit card transactions for more than 4,200 Wendy’s restaurants in the United States. Fifth Third Bank Processing Solutions processes over nine billion ATM and POS transactions per year for more than 200,000 retail locations and 1,550 financial institutions worldwide, including The Kroger Co., AutoZone, Abercrombie & Fitch, Nordstrom, Inc., and The Finish Line. Wendy’s International operates and franchises more than 6,300 Wendy’s restaurants worldwide.

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Target’s Card Yield Continues to Rise in Q1

Target reported that the pretax yield for its credit card segment rose to 11.2% for the quarter ending May 3rd, compared to 11.0% in the prior quarter, and 10.4% one-year ago. The retailer’s credit card pre-tax profits were up 10% to $166 million for the first quarter year-on-year, but $2 million lower than the fourth quarter, due to the seasonal contraction in outstandings. Target’s “smart VISA” portfolio posted 1Q/04 outstandings of $3.99 billion, a 6% increase over 1Q/03. At the end of the first quarter, Target’s private label outstandings were $698 million, compared to $783 million for the fourth quarter, and $734 million one-year ago. Target’s net charge-off rate for its VISA program was 9.4%, compared to 9.2% in the previous quarter and, compared to 8.5% one-year ago. Net write-offs for its store credit card program were 6.9% for 1Q/04, compared to 7.3% for the fourth quarter, and compared to 8.1% for 1Q/03. The 90-day+ delinquency rate for the “smart VISA” was 3.4% for 1Q/04, compared to 3.6% for the fourth quarter, and 3.3% for 1Q/03. For its “Guest Card” program the figure dropped to 4.5%, compared to 4.7% for 4Q/03, and compared to one-year ago’s 5.1%. In March, Target announced it plans to remove the smart card feature from all of its VISA cards over the next twelve months. Target was the first major retailer to embrace smart cards on a national basis, launching its “smart VISA” card in November 2001 with plans to deploy smart card terminals in its stores nationwide. For complete details on Target’s 1Q/04 performance visit CardData ([www.carddata.com][1]). (CF Library 3/1/04)

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

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COO Towe also Becomes Certegy President

Certegy has promoted Larry Towe from EVP/COO to President/COO. Towe has served as Certegy’s Executive Vice President and Chief Operating Officer since June 2001. He previously held the positions of Executive Vice President/Group Executive of Equifax Payment Services and Senior Vice President/General Manager of Equifax Card Solutions, International. Certegy provides credit and debit processing, check risk management and check cashing services, merchant processing and e-banking services to over 6,500 financial institutions, 117,000 retailers and 100 million consumers worldwide.

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MasterCard Establishes Co-Brand Hall of Fame

MasterCard has created a “Co-Brand Hall of Fame” to honor excellence and innovation among its 9,500 North American co-brand payment card programs. The first year winners are the “Marathon Platinum MasterCard,” the “Universal Entertainment MasterCard Card from Chase,” and the “Citi/AAdvantage Card” program. The “Marathon Platinum MasterCard” received the “Best Launch in 2003.” Launched by Marathon Ashland Petroleum and Chase in August, the card allows card members to earn rebates for purchases at more than 3,900 Marathon brand locations. MasterCard says the launch fully engaged its dealers and employees in efforts to inform consumers about the new card, including targeted direct mail, comprehensive signage kits, employee sales training and contests, and television spots. The “Best Usage/Expansion Program in 2003′ was awarded to the “Universal Entertainment MasterCard Card from Chase.” Cardholders earn one point per dollar on all everyday purchases and two points per dollar on select Universal Parks and Resorts purchases. Points can be redeemed for movie and concert tickets, DVDs and CDs, Hollywood experiences, and online auctions of unique movie memorabilia. Chase also recently added instant card issuance in Universal Studios Theme Parks. The “Long Term Achievement Award” was given to the “Citi/AAdvantage Card.” The card, launched in 1987, was among the first co-branded airline programs and today is one of the largest co-brand programs in the world. The card offers a network of more than 1500 participating companies where cardholders can earn rewards. The awards were judged and selected by author Jack Trout; John Grund, a partner, general manager of Retail Services at First Annapolis; and, Michael Capizzi, general manager and executive editor of Colloquy, a periodical serving the loyalty marketing industry since 1990.

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Cash Technologies Acquires Heuristic Technologies

Los Angeles-based Cash Technologies has executed a definitive asset purchase agreement for Heuristic Technologies, a financial data processor. Closing of the transaction is subject to several items, including but not limited to the assignment of various customer and trade agreements, the completion of necessary funding, final approval of the Board of Directors of Cash Technologies, the completion by Cash Technologies of its due diligence investigation and other customary closing conditions. Cash Technologies, Inc. develops and markets innovative data processing systems, including the BONUS(TM) and MFS(TM) financial services systems, EMMA(TM) transaction processing software and PrISM(TM) security system.

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LaGarde and ClearCommerce Team

LaGarde and ClearCommerce Corporation have partnered to provide SMB merchants with a fully certified infrastructure that ensures compliance with security requirements established by card associations. Most SMB merchants are struggling with how to bring their online operations into compliance. The majority of shopping cart and gateway services are not currently compliant, and the implementation process is often complex. LaGarde is a leading global provider of e-business solutions for the small and medium-sized business market. ClearCommerce is the leading provider of fraud prevention and payment processing solutions to merchants and service providers in the United States and Europe.

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Comet Group Opts for Dione’s Xtreme Payment Terminal

Electrical retailer Comet Group has chosen Dione’s “Xtreme” payment terminal and PIN pad as part of its “Chip & PIN” implementation program. Installation will take place between May and July equipping over 245 stores with 2,200 “Xtreme” terminals each linked to an IBM EPoS using “Retail Logic” software. The popular “Xtreme” handset has already become the most widely deployed PIN pad in the UK, connecting to existing EPoS systems and EFTPoS devices and operating both as an EMV level 1 card reader and PIN pad. Compact and comfortable in the hand, it can read magstripe and chip cards, is fully PIN enabled and approved to the VISA PED (offline PIN) standard. Dione has a unique range of EMV solutions and is currently involved in over 50 “Chip & PIN” implementation program throughout the UK. Comet has more than 245 stores throughout the UK.

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NOVA Upshifts Shift4 Clients by 12 Seconds

Atlanta-based NOVA Information Systems announced that all Shift4 merchants, POS vendors and VARs, including Trump Plaza in Atlantic City and JFK International Airport, previously connecting to NOVA via dial-up have been successfully migrated to a direct high-speed connection, cutting average authorization transaction times to less than 3 seconds on the new interface. Shift4’s community of more than 75 POS vendors and VARs serving the restaurant, lodging and hospitality markets now have access to the NOVA Network, rated number one in speed and reliability by MasterCard. NOVA Information Systems, a leader in the payment processing industry, is a wholly owned subsidiary of U.S. Bancorp. Shift4, a leading developer of financial transaction processing software and services, provides web-based, real-time enterprise payment solutions for leaders in the hospitality, retail, foodservices and e-commerce markets.

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UTI & DIEBOLD

UTI Bank has placed a minimum order for 600 ATMs from Diebold including turnkey auxiliary services such as site preparation, ATM managed services and ATM upgrades on a contract
basis. It is Diebold’s third consecutive order from UTI Bank. Diebold ATMs now comprise 85% of the 1,250 ATMs owned by UTI. In addition to providing 600 new ATMs, Diebold Systems will also upgrade UTI Bank’s existing ATMs to the new “EPP4.0” standards. The company also secured a managed services contract from UTI Bank for remote electronic journaling and content distribution for the bank’s current
and new ATMs. The electronic journal solution will provide daily uploads of data to the central server online. The managed services contract also encompasses remote content distribution
for services such as delivering new screens and icons to ATMs in the network, as well as managing deployment of these services from the central server instead of service engineers working manually at the ATM.

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