Stocks Crash

The stock market headed straight down at the opening bell with all major indices significantly down. The Dow Jones Industrial Average sunk more than 600 points in the first hour of trading and the Nasdaq has dropped more than 100 points. Internet connections to trading firms bogged down, preventing personal retail investors from trading or getting current information. However, the easing of SEC rules pertaining to stock buy backs should smooth out some of the roughing sailing expected today in stock trading as the markets open. Morgan Stanley said it expects to utilize some or all of its remaining $1 billion authorization under its capital management and equity anti-dilution repurchase programs. As expected American Express was the hardest hit as it opened for trading at 10:30am at $29.00.

CARD STOCKS
9/17 9/10
COMPANY OPEN CLOSE 52wk Lo
Providian $25.60 $26.30 $25.55
MBNA $30.00 $31.24 $27.30
Metris $22.65 $23.20 $19.15
Capital One $48.10 $50.37 $45.88
Household $55.04 $56.31 $43.88
Amer Express $29.00 $35.01 $33.70
NextCard $ 7.80 $ 7.85 $ 4.56
Source: CardData (www.carddata.com)

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Experian CreditCommander

Experian, a leading global information solutions company, announced it has signed an agreement with MicroBilt Corporation, a provider of credit access software via the Internet. Experian’s Fast Start suite of applicant scoring models is now available to the financial services industry through MicroBilt’s CreditCommander.com interactive Web site.

“We are very pleased that MicroBilt has added our industry-leading Fast Start scorecards to CreditCommander.com,” said Rob Fite, director of strategic initiatives for Experian’s decision solutions business unit. “With access to these industry specific semi-custom scorecards, MicroBilt’s customers, such as credit unions and banks, can improve the efficiency and effectiveness of the new credit evaluation process.

Experian’s Fast Start suite of empirically derived scorecards makes use of account credit bureau data as well as industry- and product-specific data to help banks and credit unions improve the efficiency and speed of the credit decisioning process. For each industry model, pooled data is analyzed, predictive characteristics are selected, point values are assigned, and the model is validated against a subpopulation of the original pooled data. This provides a flexible alternative to the development of a custom model.

“We are delighted to begin offering Experian’s Fast Start scoring models to existing and prospective customers,” states Mike Garretson, senior vice president and general manager of MicroBilt Corporation. “For example, integrating the Credit Union model into CreditCommander.com gives lenders the ability to quickly and accurately zero in on the right decision and product to offer their potential clients.”

Experian has developed a comprehensive suite of industry specific models including automobile, bankcard, credit union, home equity, and direct and subprime loans.

About Experian

Experian enables organizations to find the best prospects and make fast, informed decisions to improve and personalize relationships with their customers. It does this by combining sophisticated and intelligent decision-making software and systems with some of the world’s most comprehensive databases of information on consumers, businesses, motor vehicles and property. Through multi-channel delivery of its Web-based products and services, Experian enables its clients to conduct secure and profitable e-business and develop state-of-the-art Customer Relationship Management (CRM) systems for communicating and building relationships with customers. Experian is a subsidiary of GUS plc and has headquarters in Nottingham, UK, and Orange, Calif. Its 12,000 people support clients in more than 50 countries. Annual sales are approximately $1.5 billion.

For more information, visit the company’s Web site at .

About MicroBilt:

MicroBilt, a division of Bristol is a nationwide leader in credit bureau data access and retrieval, providing credit solutions to the Financial (banking, mortgages, home equity, credit union, collections), Rental or Leasing, Health Care, Insurance, Law Enforcement, Educational (Universities, Colleges and institutions of higher learning) and Utilities (gas, electric, cellular, cable, residential phones) industries. MicroBilt provides interfaces with the three consumer bureaus, Equifax, Experian and Trans Union and the two commercial bureaus, Dun & Bradstreet and Experian Business. Bureau data is available via dial-up software, Internet website access (), or through an integrated custom interface utilizing the Software Developers Kit. The company also enables web sites to enhance their content offerings by delivering a CreditCommander.com co-branded site to their established online communities. MicroBilt services over 30,000 customers throughout the United States and Canada. MicroBilt (), formerly a First Data Corporation subsidiary, is headquartered in Kennesaw, Georgia with offices in Princeton, New Jersey, South Carolina, Arizona and California.

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Universal Money 2Q

Universal Money reported revenues for the second quarter ended July 31, 2001 of $ 2.4 million as compared to $2.1 million for the second quarter ended July 31, 2000. The Company reported net income of $76,186 for the second quarter ended July 31, 2001, compared to net income of $60,488 for the second quarter ended July 31, 2000. The number of ATMs in the Company’s network increased to 615 ATMs in the second quarter ended July 31, 2001, from 549 in the second quarter ended July 31, 2000. Additional information is contained in the Company’s Form 10-QSB for the second quarter ended July 31, 2001 filed today with the Securities and Exchange Commission.

Universal Money is engaged in the business of operating a network of automated teller machines (ATMs), as well as providing network management and switching services for banks and third party ATM owners. The ATMs provide holders of debit and credit cards access to cash, account information and other services at convenient locations and times.

Universal Money and Universal Money Center are registered trademarks of Universal Money Centers, Inc., and are the property of the owner herein.

SELECTED FINANCIAL DATA
(unaudited)
SECOND QUARTER ENDED JULY 31
2001 2000
Revenues $2,416,768 2,074,234
Net Income $76,186 60,488
Earnings per share $.019 .031
Total assets $3,777,432 3,481,426
Stockholders’ equity $2,000,939 1,138,464

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Intelli-Check Acquires IDentiScan

Intelli-Check, Inc., a developer of advanced document verification systems, announced has signed a letter of intent to purchase all of the assets of The IDentiScan Company, LLC, for $1 million of restricted common stock, plus additional incentives upon meeting specific objectives over the next three years.

The purchase is subject to the satisfactory completion of due diligence and execution of a definitive agreement expected in the fourth quarter.

IDentiScan, a privately held company based in Ellington, Conn., designs and sells age verification terminals, which assist merchants of age-restricted products such as alcohol and tobacco in determining whether the purchaser of these products is of legal age for their purchase.

“The natural synergies and the combination of the two companies’ patented technologies, will substantially strengthen our already sophisticated intellectual property portfolio,” stated Frank Mandelbaum, Chairman and Chief Executive Officer of Intelli-Check. “The acquisition will allow us to effectively provide a more cost effective alternative to that segment of the market requiring only age-verification.”

Mr. Mandelbaum noted that both companies have had the distraction and expense of a costly and complex patent infringement litigation proceeding through the courts. The litigation between the parties will cease upon closing of the transaction and the ability of Intelli-Check to enforce its patents will be further enhanced. Mr. Mandelbaum further noted that, in light of the recent terrorist attacks, its ID-Check technology is fully capable of increasing security and deterring terrorism at high profile buildings, car rental agencies and airports by verifying the validity of drivers licenses, state issued ID’s and military identification presented to gain entry, rent vehicles or board airplanes. The recent purchase of our ID-Check units by the Department of Defense for the purpose of increasing security at the entrances to the Pentagon by deploying these units in the near future is proof of this capability. Intelli-Check(R), Inc. designs, develops, and markets an advanced document verification system to enable retailers to prevent economic loss caused by various frauds utilizing fake ID’s and to determine whether purchasers of age restricted products meet the minimum age requirements for their sale. Fake ID’s of the highest quality are easily obtainable and have become a major tool in “identity theft,” the fastest growing crime in the U.S. The ID Check(R) terminal, with its patented software, analyzes and displays information encoded in magnetic stripes and barcodes found on driver licenses, military identification and other forms of government-issued identification issued by over 50 jurisdictions.

IDentiScan’s patented terminals read machine encoded information on driver’s licenses, state issued ID cards and display whether the encoded information from that document supports a claim of legal age by the purchaser. In view of legislation passed or proposed in many states, the use of IDentiScan’s terminals demonstrate the retailer’s compliance with regulation and due diligence.

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Coinstar Donations

Coinstar has mobilized its network of supermarket-based consumer coin counting machines to accept donations on behalf of the American Red Cross. The company says if just half of the Americans who live within two miles of a Coinstar machine donate a handful of change, it can raise $65 million for the American Red Cross. Coinstar machines located in financial institutions, as well as in Farmer Jack, Food Lion, Harris Teeter, Meijer and Weis stores are not enabled with the Red Cross donation feature. Linked by a sophisticated interactive network, the company has more than 8,800 machines throughout North America, as well as in the United Kingdom. In the second quarter, Coinstar began selling prepaid ‘MasterCards’ through five of its machines, making Coinstar the only self-service machine to distribute a major cash card.

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Cardholder Behavior

Americans will not spend less and won’t necessarily change their personal behavior apart from cutting down on their flying, particularly over the next few days in the wake of Tuesday’s terrorist attacks. Harris Interactive conducted an Internet poll of more than 4600 U.S. adults since Tuesday, which found that only 23% of consumers will spend less and only 19% will keep more cash on hand as a result of Tuesday’s terrorist attacks. Harris did find that 64% would be afraid to fly on an airplane in the next few days and that 37% would avoid flying for the next few months. Only 15% said they would cancel or reduce overseas travel.

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Late Fees

Major credit card issuers have indicated they will waive late fee charges due to the disruption in the mail service caused by Tuesday’s tragic events in New York and Washington. Discover, MBNA, and Bank One are among the first to relax the policies regarding late fees. Discover announced late Thursday that it is eliminating all late fee charges effective immediately until normal mail service is restored. Discover Card said it is also providing additional assistance to its cardholders with special services including necessary emergency credit line increases and the issuance of replacement Discover Cards. MBNA and Bank One confirmed yesterday they will reverse late fees if customers call. However other issuers have indicated this morning they are reviewing the issue and may follow Discover’s decision to waive all late fees until full mail service resumes. CardWeb.com received a significant number of calls yesterday from consumers concerned about the impact of slow mail service on their credit card payments.

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Fed Response

There is a growing consensus that the Federal Reserve will chop interest rates by 50 basis points, sooner, rather than later. The next scheduled policy meeting is October 2. Bond prices rose in London as speculation mounted the Fed will cut rates to protect the U.S. economy in the wake of this week’s terrorists attacks. A 50 bps cut would drive the prime rate down to 6.00%, the lowest level in ten years.

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Travel Restrictions

The days of walking to the gate with only a credit card to check-in, are over. The US Department of Transportation now requires travelers to present a printed airline ticket on the designated airline OR a printed e-ticket confirmation or e-mail itinerary which includes passenger name, identification number, flight number, date and either a confirmation number or ticket number OR a printout of a Web site confirmation, if the flight was booked via an airline Internet site. If a confirmed passenger is not in receipt of one of these documents, they can request a printed confirmation at the appropriate airline’s check in counter. Passengers without one of these documents will not be allowed to board their flights. Only ticketed passengers will be allowed to proceed past airport screeners to boarding areas under the new heightened security procedures.

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Investor Behavior

Stock market analysts are encouraging investors to hold onto stocks next week and not react in fear. Analysts are pointing to past declines in market indexes that occurred in reaction to events, that reversed themselves within days or weeks. The NAIC says immediately following the Japanese attack on Pearl Harbor in 1941, the DJIA dipped 5.9%, but it recovered to its previous level within two days. The Dow dropped 6.5% following Iraq’s 1990 invasion of Kuwait but recovered within two days. One of the largest market reactions to a national crisis, a 17.9% drop in the Dow following announcement of the 1973 Arab oil embargo, also was short-lived. Credit card stocks may be impacted by lower charge volume but there is evidence that more consumers are revolving balances this year than last year. This is the first time since 1991 that the number of revolvers has increased, according to CardData’s mid-year issuer data. Rising interest revenue and declining merchant revenue could be off-setting trends that stabilize credit card related stocks for the remainder of 2001.

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