Operation No-Credit

The Federal Trade Commission and 15 state and federal law enforcers, who yesterday announced “Operation No-Credit” – a joint law enforcement campaign targeting a wide range of credit-related frauds, said they have filed 43 actions against credit con artists. Among those caught were seven separate enterprises offering consumers VISA and MasterCards, for a one-time advance fee, but never produced the promised credit cards. In one case, consumers paid as much as $499 to receive the credit card, most consumers did not receive the promised credit cards. A few received a “temporary” or “dummy”card with the MasterCard logo and a non-magnetic black stripe on the back. When consumers called to activate the card, the defendants told them for the first time that they had a debit card and not a credit card. The defendants also told consumers that they had to pay an additional fee and deposit money for any purchases made on the account.

OPERATION NO-CREDIT DRAGNET
(Credit Card Firms Sued by the FTC)
FLORIDA – Bay Area Business Council, Inc.; Bay Area Business Council Customer
Service Corp.; America Leisure Card Corp. Premier Financial Services
International, Inc.; First Financial Debt Consolidation Inc.
TEXAS – Brent Shivers dba Credit Card Services; Destyni Enterprises
TORONTO – 1st Beneficial Credit Services LLC; First Beneficial Credit Services;
First Beneficial Credit Services, Inc.; American Capitol; Platinum
Express
TENNESSEE – Premier Financial Services of Tennessee, Inc.
UTAH – Westcal Equipment, Inc.; Pioneer First; PF Member Services., Inc.
NEW YORK – Star Credit Services Inc.
NEVADA – Tyme Lock 2000, Inc; United Family Services; USA Membership Services;
Total Resources, Inc.

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NFC TECHNOLOGY

Amsterdam-based Royal Philips Electronics and Japan’s Sony Corporation have teamed to jointly develop a new near field radio-frequency communication technology, which is fully compliant to both Philips’ existing “Mifare” and Sony’s “FeliCa” contactless smart card technologies. The “Near Field Communication” (NFC) technology will operate on 13.56 MHz and allow for the transfer of any kind of data between NFC enabled devices such as mobile phones, digital cameras and PDA’s as well as to PC’s, laptops, game consoles or PC Peripherals, across a distance of up to twenty centimeters and aiming at speeds fast enough to transfer high quality images. The aim is to build a ubiquitous open infrastructure of NFC-compliant devices which effectively incorporate smart-key and smart card reader functions, providing a convenient communication method for services such as payment (including credit card), ticketing, and accessing online entertainment content (e.g. gaming) through the devices. This can be done simply by holding devices or smart cards near each other. It is anticipated that the technology will play a key role in allowing content and service providers to offer various new ways of accessing their services. The consumer’s primary NFC device (e.g. mobile phone or PDA) acts as a smart-key to gain access to chosen services from any NFC device, anywhere, anytime.

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Discover GameDay

Discover has teamed with ESPN GameDay and Best Buy, for the second year, to offer the “Discover Card Gets You on GameDay Challenge” offering cardholders a chance to appear on the New Year’s Day broadcast of ESPN College GameDay. Discover Card will support the promotion with advertising across ABC and ESPN television and radio college football programming, as well as ESPN The Magazine. Best Buy shoppers will be alerted to the contest by in-store signage.

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SUN HEALTH CARDS

The Bureau of National Health Insurance of Taiwan has started to roll out 22 million “Java Card” technology-powered smart health cards, replacing its original paper-based system. The program is powered by Sun Microsystems’ network solutions. TECO Electric & Machinery Co. Ltd. implemented the US$115 million health smart card project mainly to reduce medical costs and to encourage usage of the card by
facilitating both card and reader production. In order to meet its business critical need to support 5,000 simultaneous users on a highly reliable and secure system, TECO selected the Sun Enterprise “10000,” “4500,” “3500” and “450” servers, and the “Solaris” operating environment.

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Holiday Outlook

One research firm went out on the limb yesterday predicting a significant jump in consumer spending during the upcoming holiday season. Deloitte Research says its index forecasts a rise in spending from 2.5% in the first half of 2002 to a more robust 5.5% to 6.0% by year end. The firm says consumers are coming into a great deal of cash, based on various economic factors, and historically when consumers find themselves with this much additional cash, they spend it. The index draws on four indicators, including initial unemployment claims, real wage gains, taxes (personal income burden) and real home prices.

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Clarity Change

NY-based Clarity Incentive Systems, Inc has changed its name to Clarity Payment Solutions, Inc. and has secured another round of funding. The second round of institutional funding of $6.4 million was led by two previous investors — Espirito Santo Tech Ventures, a subsidiary of Banco Espirito Santo, and Allfirst Financial Inc., a subsidiary of Allied Irish Banks. Clarity develops electronic payment solutions and processes payment transactions for emerging and specialty markets. The Company also provides solutions for companies in numerous vertical markets that include incentives, consumer promotions, healthcare, insurance, unbanked, teen payments and payroll, transforming their legacy, paper-based payment processes into efficient and cost-effective electronic systems.

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I-WEATHVIEW DEPLOYMENT

Vancouver-based Fincentric Corporation announced that Rainier Pacific Bank has launched its “i-Wealthview Wealth Management” system. The bank will be implementing Fincentric’s full suite of core banking and wealth management products to accommodate its converged offering of banking, insurance, and investment services. Modules of “i-Wealthview” to be implemented by Rainier Pacific in early 2003 include “i-Wealthview Banking,” i-Wealthview Data Aggregation,” and i-Wealthview Personal Portal,” which will provide Rainier Pacific customers a single-point-of access to their entire financial services portfolio. Based in Tacoma, WA, Rainier Pacific Bank serves over 43,000 customers in the Pacific Northwest and manages US $490 million in assets.

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Advanced Smart Card Course

The Educational Institute of the Smart Card Alliance will launch a new course, called “Advanced Business of Smart Cards” in conjunction with the “10th Annual Smart Card Alliance Conference” during October Arizona. In addition to business cases, EI 201 topics include implementation topics such as project management, card personalization and issuance, and standards as well as the latest developments in mobile e-commerce, transportation contactless technology, biometrics and PKI.

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Mosaik MasterCard

BMO Bank of Montreal yesterday raised the bar on customized bank credits with the introduction of the “Mosaik MasterCard.” The new card offers consumers 900 potential combinations of features and pricing. The “Mosaik MasterCard” not only enables Canadian consumers to build their own card, it also allows customers to re-build their cards by changing the features as their needs change without having to replace the card or apply for a new one. Some of the individual features offered include the “AIR MILES Reward Program,” “CashBack Reward Program,” “Travel Protection,” “Travel Medical,” “Concierge Service” and either a standard or low interest rate as well as the card’s design. Some of card’s modules have annual fees. Consumers select the card’s elements from the bank’s paper or online interactive “CardBuilder” tools. Once they become a cardholder, they will be able to make changes by telephone or online using the “CardManager” tool. Existing BMO Bank of Montreal MasterCard cardholders are currently being converted to the new “Mosaik MasterCard” program. BMO Bank of Montreal is offering a pricing choice between a no annual fee card with an 18.4% APR and a $15 annual fee card with a 12.9% interest rate on purchases and a 7.9% interest rate on cash advances.

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