EFG and the FTC Battle it Out in Court

TX-based credit card processor EFG Card Services was barred yesterday from processing transactions through the ACH Network for numerous fraudulent telemarketers and to halt the alleged deceptive marketing of their own advance-fee debit cards. The FTC obtained the temporary restraining order on July 8th, which also set up a temporary monitor over the defendants to review their business practices. In its complaint, the FTC alleged that EFG assisted and facilitated at least four client telemarketers engaged in deceptively selling advance-fee credit cards, and a fifth client engaged in deceptively selling a lottery scam. The FTC complaint also alleges that in April 2000, the defendants engaged in the marketing and sale of their own advance-fee stored-value debit cards ­ first the “First Freedom Financial” card and then the “AmeriOne” card. According to the FTC, the defendants charged consumers a one-time advance fee of between $80 to $100, as well as a $9.95 monthly service fee for these card. In May of this year, the FTC alleges, the defendants began marketing a new advance-fee card product, known as the “United USA Card,” making many of the same misrepresentations used in previous advance-fee stored-value debit cards. The FTC noted that EFG allegedly misrepresented the cards as credit cards, and that the “AmeriOne” card was affiliated with MasterCard.

Details

CATUITY & MARITZ

Catuity has signed a three-year licensing agreement with Maritz to operate the Catuity software through Maritz Loyalty Marketing. Missouri-based Maritz Loyalty Marketing offers a full-service mix of loyalty marketing capabilities including program strategy, program management, customer communications, rewards and fulfillment, creative execution and loyalty analytics through their proprietary VAULT platform. Catuity provides application software that allows merchants, transaction processors and payment card issuers to establish and administer customer incentive and loyalty programs integrated to the payment system at the point of sale. The patented Catuity system can be utilized via mag stripe, smart card, RFID or contactless tokens and to date, Catuity’s applet has been included on millions of chip-based credit cards.

Details

bcgi Signs Three for Payment Card-Enabled Prepaid Airtime

Boston Communications Group has signed new carrier implementations of its “Payment Agent Service” with Cellular One of Northeast Arizona, Cellular One of East-Central Illinois, and MI-based Thumb Cellular. The new service enables them to offer their prepaid wireless subscribers the ability to purchase airtime using their payment cards anytime, anywhere. In addition, bcgi enables carriers to bring the offering to market quickly through its TOTALsource implementation model.

Details

ASIA-PACIFIC RECOVERY

Thailand and India manifested the largest increases in consumer confidence from six months ago, while China and New Zealand remained optimistic, albeit at slightly reduced levels, while consumers in Japan, Korea, Taiwan and Hong Kong remained pessimistic. The Asia/Pacific region has been hard hit this year with the outbreak of SARS and the spillover effects of the war in Iraq and the threat of terrorism. The findings come from MasterCard’s “MasterIndex of Consumer Confidence” survey which studies 13 markets in Asia/Pacific. MasterCard International previously reported that its gross dollar volume declined in the Asia/Pacific region for the first time. During the first quarter of this year, MasterCard’s gross dollar volume dipped 6.8% to $54.2 billion. Card volume in South Korea particularly declined for all card issuers as the country continues to deal with huge charge-offs. MasterCard said Thailand’s rise to the top place in consumer optimism in Asia/Pacific is a direct reflection of the economy’s ability to generate strong income and employment growth from its domestic sector, especially in consumption related activities.

Details

SCM FINEREAD

SCM Microsystems has become the third company worldwide to achieve “FINREAD” compliance. A “FINREAD” compliant card reader, like the “STR-FINREAD,” is a universal PC peripheral device that can reliably secure smart card initiated transactions on the Internet in a non-trusted environment, such as a home PC. The “FINREAD” standard also guarantees interoperability between different smart card issuing entities and across multiple reader manufacturers. Carried out under the auspices of the European Commission, the multi-organization “FINREAD” program involves Banksys, Groupement des Cartes Bancaires, MasterCard Europe, Ingenico, Interpay Nederland, SIZ, VISA, France Telecom, Canal Plus Technologies, Sagem, Orga, OMNIKEY, and GTA.

Details

PAYSPOT DEALS

Euronet Worldwide announced that U.S. ATM processor Innobeta and ATM manufacturer NexTran have joined the “PaySpot”
program. “PaySpot” is a new U.S.-based top-up service that enables consumers to purchase prepaid wireless airtime and long-distance calling plans from ATM and POS devices. Consumers can recharge prepaid accounts from all major wireless carriers as well as more than 20 other regional wireless carriers. The program processes PIN-based debit/credit card transactions at the ATM, and immediately credits the consumers’ prepaid accounts. Cash-based purchases using a POS terminal are also accepted at “PaySpot” locations. “PaySpot” services are supported by
several ATM processors, including Concord EFS and Genpass, ATM manufacturers such as Triton and Tidel and more than 20 independent sales organizations, including Financial Technologies, ATM America, ATM USA, The Bailey Group and Welch Systems.

Details

Cap One Aims for Super-Prime Market with 4.99% Card

Seeking to establish itself as a market leader in the super-prime market, sub- prime specialist Capital One announced today a fixed on-going interest rate of 4.99% to its best customers. Capital One’s new “Platinum MasterCard” will offer the 4.99% fixed APR on new purchases and balance transfers. The new card comes in a market where a growing number of consumers understand that the majority of so-called “fixed” rates have little if any credibility, subject to change upon fifteen days notice. Cap One dubbed the card “the lowest long-term fixed rate in the nation.” The issuer was unable to define the length of “long-term” used in direct mail solicitations for the card. The new card also offers no balance transfer or cash advance fees and no annual fee.

Details

Chiles’ Santander Hires Former MasterCard Regional President

Santander Central Hispano in Chile has hired Fernando Canas as Managing Director in charge of Grupo Santander’s credit and debit card payment systems in Latin America. Currently, he is CEO of Banco Santander Chile. Mr. Canas has also been the President of MasterCard International for Latin America and the Caribbean. Santander Chile has 346 branches and 1,104 ATMs.

Details

United Awards Sweet Spots and Free International Tickets

United Airlines has launched a special promotion to retain its most elite flyers and also announced a new promotion to reward international business flyers. Last week, United awarded “1K Flyers” four “Sweet Spot Certificates” enabling them to upgrade any fare, worldwide, on United’s system between July 15th, 2003 and February 29, 2004. United also announced this morning that “United First” and “United Business” class passengers who purchase a qualifying international roundtrip ticket on United for travel between July 9, 2003 and September 14, 2003 will earn a free award ticket valid for travel to any of over 650 destinations around the world served by United and the Star Alliance carriers. Last month, United launched a promotion offering a free domestic roundtrip for flying three paid, qualifying roundtrip trips on United or United Express between June 5 and September 30, 2003. The new offers are expected to revitalize the “Bank One/United Mileage Plus” credit card program which has been experiencing a drop-off in consumer response. (CF Library 6/10/03)

Details

HSBC Opts for Strategy Science for Fraud Referral

HSBC Bank has signed as the first client to implement Fair Isaac’s new “Strategy Science for Fraud Referral. The strategy development solution will provide the global financial services organization with unprecedented fraud control for its credit card portfolio while increasing approved transactions and improving cardholder experience. A typical fraud referral strategy today impacts more than $60 in non-fraudulent transactions for every $1 of fraud captured.

Details