GE’s Fasoli to Head New Retail Sales Finance Company

GE Consumer Finance has named Dave Fasoli, who served in several roles in GE’s private label credit card and bankcard businesses, as president of the new Retail Sales Finance Servicing Company, which was created following the purchase of the Conseco Finance and Mill Creek Bank. Fasoli brings 22 years of business experience to the new position, and has worked with several units of GE, including aerospace, consumer electronics and corporate headquarters. Fasoli is a graduate of the State University of New York, Albany.

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Card Debt Increases in August But Sluggish

Revolving debt is growing about a third of last year’s rate, as Americans added $1.2 billion to total revolving debt during August. One year ago, U.S. consumers added $3.9 billion to revolving debt during the month of August. However, the August figures, released Tuesday by the Federal Reserve, represented a sharp increase over the prior two months. During June consumers reduced total revolving debt by a revised $2.0 billion, and in July revolving credit was up 80 basis points or by $500 million. Bank credit card debt (excluding store and gas credit cards) at the end of the second quarter was $646.2 billion, or roughly 90% of total revolving credit, according to CardData (www.carddata.com).

REVOLVING CREDIT HISTORICAL ($billions)
Aug03 Jul 03 Jun03 May 03 Apr 03 Mar 03 Feb 03
GRWTH: 2.1% 0.8 -2.4 7.7 3.4 4.1 5.9
$OWED: $727.6 726.4 725.9 727.9 722.8 720.7 718.6

Jan03 Dec 02 Nov 02 Oct 02 Sep 02 Aug 02 Jul 02
GRWTH: 5.2% -6.7 -1.4 1.6 3.0 6.2 6.0
$OWED: $715.5 712.4 716.8 717.9 721.3 719.5 715.6
Source: Federal Reserve; revised figures as of 10/07/03;
For complete historical data visit CardData (www.carddata.com).

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CIBC Launches New Card for Small Business

CIBC has launched a stripped-down small business credit card offering a super low interest rate in Canada. The new “CIBC bizline VISA,” available to firms with less than 10 employees, offers an interest rate as low as prime +1.5%. The card carries no annual fee and a credit limit between $5,000 and $50,000. The card does offer some built-in benefits, including access to a “Small Business Saving Program”; $1 million of travel accident insurance; and a year-end statement summary. The card offers optional benefits including “CIBC Hot Line Service”; extra travel insurance; and trip cancellation/trip interruption insurance. Business applicants must have been in business for 3 months or more and have annual revenue between $35,000 and $5 million. CIBC will issue up to 9 additional cards.

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10% More Cards Were Manufactured Last Year

Last year, approximately 10.7 billion cards were manufactured worldwide, a 10.3% increase over 2001, but, when measured in U.S. dollars, the global card market increased slightly from $4.7 billion to $4.8 billion over the same period. Traditional cards represented 84% of the units, while smart cards represent 16.4% of the units. However, smart cards, due to their high cost, represented 75% of the dollars on a global basis. The findings come from the International Card Manufacturers Association “Global Market Survey” which also found that financial hologram cards represent 11.9% of the global card unit market, an increase by 11.3%.

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VISA Partners with Enterprise Software/Services Company

ISA has signed a two-year alliance agreement with iRise to develop ways to quickly enhance business application development. As part of the alliance, Visa and iRise will explore opportunities to enhance Visa’s product platform and technology development processes as well as consider customization of iRise technology solutions to serve the unique needs of the payments and financial services industries. The iRise Application Simulator(TM) platform enables business analysts to create a functionally-rich, data-aware, interactive simulation of Web-based applications without a single line of code and can eliminate up to 40 percent of development costs overall.

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Offshore Telemarketing May Save Card Issuers

An outsourcing company in India is advising U.S. credit card companies to move their outbound telemarketing activity offshore to lower costs and compliance issues with the “National Do Not Call Registry.” ICICI OneSource North America, India’s largest third-party provider of contact center and transaction processing services to the U.S. and U.K. credit card industries, says the new telemarketing rules will change the way new credit card customers are acquired. ICICI says companies spend an average of $15,000 for every call center agent plus incur rising costs due to high staff turnover and predictive dialer restrictions at their call centers.

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Americans Pull Back on Credit, Due to Job Insecurity

A survey by Cambridge Consumer Credit has found that one third of Americans have decreased their use of credit or their willingness to take on new debt because of their feelings of job insecurity. More than half of Americans (57%) say their current employment situation is having no impact on their credit usage. While those with higher incomes of over $75,000 a year. feel the most secure about their jobs (63%), while only 26% of those earning under $25,000 a year feel secure in their jobs. In conjunction with the Index, the Cambridge Credit Counseling Corp. is releasing its monthly survey of people who have called in for credit counseling services over the past month. Cambridge representatives ask callers for the primary reason that they found it necessary to get help with their debts now.

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Peeble’s Card Portfolio to be Acquired and Sold

Stage Stores is acquiring VA-retailer Peebles and its $34 million credit card portfolio, and plans to sell the portfolio shortly after it closes the acquisition. Under the terms of the agreement, the total amount to be paid for the outstanding shares and options, as well as for certain transaction related costs, will be approximately $167 million in cash. The anticipated consolidation of Stage and Peebles, which are in contiguous markets, will create a leading retailer of branded family apparel in small town America, with approximately 520 stores in 27 states and annual sales of approximately $1.2 billion.

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FTC is Cleared to Enforce Do Not Call Registry

The Federal Trade Commission was cleared yesterday to begin enforcement of the new “National Do Not Call Registry” pending appeals. The federal appeals court in Denver granted the FTC’s request to stay the order of the U.S. District Court for the District of Colorado enjoining enforcement of the Do-Not-Call Rule. However, the FTC will be unable to add new phone numbers to the database until the legal challenges are settled. The U.S. District Court for the District of Colorado ruled two weeks ago that the registry was unconstitutional. The appeal court will hear oral arguments on November 10th on the unconstitutional issue.

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Marks & Spencer Emerging as a Major Card Player

The largest credit card launch ever in Europe got underway this week. Marks & Spencer Financial Services and MasterCard rolled-out the “&more MasterCard” which aims to become the 7th largest credit card issuer in the UK by year end. More than 2.6 million existing Marks & Spencer charge card users have already been upgraded to the “&more” credit card, with new customers able to apply as of this morning. Alongside the credit card launch, Marks & Spencer Financial Services, the MasterCard member and issuer of the card, is being re-branded as “Marks & Spencer Money.” Prior to the national roll-out, Marks & Spencer completed a pilot phase in nine stores in South Wales with 40,000 charge card holders migrating to the new credit card. The new “&more” card offers 1 loyalty point per 1 GBP spent with Marks & Spencer and 1 loyalty point per 2 GBP spent elsewhere. The “&more” points can be converted into vouchers to spend exclusively at Marks & Spencer UK stores. The new card offers an APR of 14.9% and no annual fee.

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FTC Clips Some Texas Card Spammers

The Federal Trade Commission has reached a settlement with a group of Texas-based Internet scammers and deceptive spammers. The group allegedly sent spam e-mail telling consumers they were approved and guaranteed to receive major, unsecured credit cards with credit limits up to $5,000 for an advance fee of $49.95, which was debited from the consumer’s personal checking account. According to the FTC, however, consumers who paid the fee did not receive the promised card. Instead, they allegedly received access to a set of hyperlinks to companies where consumers could apply for credit cards, and even then those were generally for secured credit cards, stored-value cards, or catalog charge cards. The defendants, ClickForMail.com, Inc., doing business as AllPreApproved.com, and Harvey B. Vaughn, III, agreed to pay $815,000 in consumer redress to settle the FTC charges.

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Hardee’s Signs Processing Deal with NPC

Hardee’s Food Systems has inked a multi-year credit card processing deal with National Processing for all its corporate-owned locations and participating franchise locations. Hardee’s Food Systems, Inc., is a wholly owned subsidiary of CKE Restaurants, Inc., through its subsidiaries, franchisees and licensees, operates over 3,200 restaurants, including 1,000 Carl’s Jr. restaurants, 2,154 Hardee’s restaurants, and 100 La Salsa Fresh Mexican Grills in 44 states and 14 foreign countries. National Processing, Inc. through its wholly owned operating subsidiary, National Processing Company, LLC (R) is a leading provider of merchant credit and debit card processing.

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