One of the country’s largest credit-repair operations, which sold services to more than 183,000 consumers, taking in more than $53 million, has agreed to pay more than $1.15 million in consumer redress to settle FTC charges that it violated federal law. The settlement resolves charges leveled by the FTC against six Michigan-based defendants in a federal court complaint that was filed simultaneously with the settlement. The Commission’s complaint alleges that the defendants, who sell credit-repair services through a multilevel marketing organization, falsely claimed that they could remove derogatory information from consumers’ credit reports, even if that information was accurate and not obsolete. The defendants purported to do this through the use of a “one-of-a-kind” computer disk that they claimed could search and identify errors in the process used by the credit reporting agencies to enter negative items onto consumers’ credit reports.Details
Capital One reported Monday that charge-offs declined sharply during July as delinquency edged down slightly. With $62.4 billion in managed loans, and approximately $42.1 billion in U.S. credit card loans, the issuer reported that charge-offs dropped to 5.75% in July compared to 6.20% for June, and 6.40% in May. Delinquency declined to 4.92% in July, from 4.95% for June. At the end of second quarter, Cap One had 45.8 million accounts, including domestic and international credit cards and auto loans. For complete details on Capital One’s 2Q/03 performance visit CardData (www.carddata.com).
Capital One 2003
Month Charge-offs Delinquency
Apr 03 6.36% 4.86%
May 03 6.40% 4.82%
Jun 03 6.20% 4.95%
Jul 03 5.75% 4.92%
Source: CardData (www.carddata.com)
Giant Retail Stores Group has selected UT-based Q Comm’s “Qxpress 200” point of sale activation terminals and transaction processing services for the electronic distribution of prepaid and financial services throughout its convenience store chain in Arizona, New Mexico and Colorado. There are now 200 POSA terminals in 130 of Giant’s 132 stores located throughout Arizona, New Mexico and Colorado. The new POSA e-distribution technology deployed by Giant reduces or entirely eliminates product inventory costs, theft and stock outages of various prepaid and financial services.Details
VISA USA has launched a new unit to facilitate direct merchant connectivity to “VisaNet” via the “Direct Exchange” service. The new department will support the broad roll-out of the service, be responsible for working with acquirers to educate merchants on the value of a direct connection to “VisaNet,” as well as to gather acquirer and merchant input on future enhancements to the service. Initially launched in 2000, “Merchant Direct Exchange” is capable of processing all forms of electronic payments from credit and debit cards to check conversions to chip transactions. Later this year, VISA will add a file transfer capability enabling merchants to use a single “Direct Exchange” connection, rather than multiple connections, to send files to their acquiring financial institution. “Direct Exchange” is capable of processing $60 million in U.S. payments per hour.Details
Johannesburg-based Standard Bank has partnered with Barclays to form a new division to issue “Barclaycards” in South Africa.
“The Manchester United Barclaycard” is the first of four new credit card products to be introduced within the next six months.
The initial launch of the “Manchester United Barclaycard” will target the 3.8 million registered Manchester United supporters in South Africa, which also offers the “RedRewards” loyalty program. Under terms of the deal, Barclays has also granted Standard Bank preferential price access to Barclays ATM network for all Standard Bank and Stanbic cards issued in Africa under the VISA brand, as well as undertaking to issue cards on behalf of Standard Bank and Stanbic Bank in Botswana and Kenya. The new Barclaycard division will be run by a locally based eight-person Barclaycard Executive Management Committee, comprising the Managing Director, Financial Manager, and 6 representatives (3 from each party). The new joint venture will be equally owned by Standard Bank and Barclays.
Credit card balances currently account for just 7% of unsecured lending in South Africa.
IAC/InterActiveCorp, formerly USA Interactive, completed its acquisition of LendingTree at the close of market on Friday. So far this year, IAC has acquired Expedia, Ticketmaster, uDate.com, and Hotels.com. Rumors hit the street last week that IAC might be interested in acquiring DoubleClick. The IAC-Lending Tree transaction is valued between $626 million and $734 million, and was a stock-for-stock transaction. During the second quarter, LendingTree reported revenues of $45.0 million and net income of $7.6 million. LendingTree has more than 200 participant lenders and has facilitated nearly $55 billion in closed loans since 1996 including credit cards. The deal represents IAC’s entry into financial services and real estate verticals. IAC has an existing base of nearly 40 million unique monthly Internet users. Doug Lebda, Founder and CEO, and Tom Reddin, President and COO, will continue in their current positions, as will other key members of the senior management team. (CF Library 5/6/03; 7/25/03)Details
Carpatair has become an official merchant of Universal Air Travel Plan. Carpatair is a private Romanian-Swiss regional airline based in Bucharest. It also has commercial and operational offices in Bacau, Cluj, Sibiu, and Timisoara. UATP is owned by 21 shareholder airlines. UATP accounts are actively issued by 15 member airlines and accepted as a form of payment for corporate business travel by more than 200 airlines worldwide.Details
If U.S. merchants were permitted to charge an extra fee for using a credit card to make a purchase, the impact on domestic credit card volume could be enormous. More than 95% of Americans say they would switch back to checks and cash if merchants added a 1% to 3% fee to their credit card purchases, a practice now permitted under Australian law. The findings come from an informal poll of 1,038 participants, conducted during July on CardWeb.com’s home page. New credit card reforms that became effective in January permit merchants to recover their card costs from consumers. VISA and MasterCard have sought to overturn the new Reserve Bank of Australia regulations, and are now awaiting a decision from the Federal Court of Australia. VISA and MasterCard are also facing possible regulation of interchange fee practices in the UK, Poland, Switzerland, and New Zealand. According to data released by the Reserve Bank of Australia in July, Australians charged $11.7 billion during May, a weak 4.5% increase over the previous year. By comparison, credit card volume between May 2001 and May 2002 increased 41.3%, nearly ten times the current growth rate. (CF Library 7/2/03; 7/21/03)Details
Datacard Group’s flagship identity software is now available in French, German, Japanese and Spanish, in addition to English. Additional language options for the Datacard ID Works v4.1 identification software will allow multi-national organizations to tailor their ID and badging programs to meet regional needs and take advantage of the new vertical ID Works solutions to be released later this year.
Datacard ID Works software is used for a variety of identity applications worldwide, including corporate and government ID, membership, customer loyalty programs and more. Datacard sells the software separately and bundles it with card printers, cameras, biometrics devices and other peripherals to create fully integrated ID systems.
National Processing Company reported last week it has processed approximately $490 million of tickets purchased, but as yet unflown, for United Airlines, that could be subject to charge-back, if the airline liquidates. However, NPC says the risk of a material loss under the chargeback rules is not probable at this time. If United completely folds it is likely other airlines will honor the tickets. NPC also reported it also has processed approximately $441 million of tickets purchased, but as yet unflown, for another undisclosed airline, that could be subject to charge-back. Reportedly, the second airline is Continental. In May 2002, NPC announced its decision to discontinue processing debit and credit card transactions for the airline industry. The two remaining contracts currently in effect have expiration dates of April 2004 and November 2005. During the second quarter, the Company’s obligation to process card transactions for two other airline merchants, including U.S. Airways, ceased with these merchants transitioning to new processors. At the end of the second quarter, the estimated dollar value of tickets purchased, but as yet unflown, under these concluding contracts was approximately $151 million.Details
Bersenbrueck-based PCU Mefema and Leverkusen-based Bayer Polymers have joined the International Card Manufacturers Association as Associate Members – Suppliers. MK Smartcard Joint Venture Company of Hanoi, Vietnam has also joined a Principal Member – Card Manufacturers. Other new Principal Members – Card Manufacturers include Production Services Associates of Deerfield, Illinois and Sandia Imaging of Arlington, Texas. Schuster Flexible Packaging of Commerce, California and Coding Products of Kalkaska, Michigan have joined as Associate Members – Suppliers. ICMA is a non-profit association of plastic card manufacturers, personalizers and related industry participant more than 230 members globally.Details
Atlanta-based InterCept reported second quarter revenues of $64.1 million, a 16.3% increase compared with 2Q/02. However, net income for 2Q/03 totaled $3.0 million, compared to $5.1 million one year ago. The company took a $3.5 million charge during the quarter after SLMsoft Inc., which owed InterCept $7.2 million on a loan, filed bankruptcy. Revenues from Financial Institution Services increased 19.4% to $48.6 million. Revenue from Financial Institution Services increased due to the acquisition of item processing centers in July 2002 and internal growth. Total revenues from Merchant Services grew 7.6% to $15.5 million. Revenue from Merchant Services was higher in 2Q/03 than in the second quarter of last year as a result of the acquisitions of iBill in April 2002 and EPX in May 2002, offset by customer attrition in the merchant base. For complete details on InterCept’s 2Q/03 results visit CardData ([www.carddata.com]).