The Federal Reserve Board announced Friday it is amending Regulation Z, which implements the Truth in Lending Act, to revise the disclosure requirements for credit and charge card solicitations and applications. Under the final rule, the APR for purchase transactions must be in 18-point type. Cash advance and balance transfer APRs must be included in the table. Balance transfer fees must be disclosed either in or outside of the table. The FRB also said it has also included specific requirements on the “prominent” location of the disclosure table and the level of detail about cost information required or permitted in the table. The revisions are effective immediately; compliance is mandatory as of October 1, 2001. In May of this year, the Federal Reserve asked for public comment on a number of proposed amendments to Reg. Z including a requirement for disclosure on the specific events that trigger a punitive interest rate. The Fed also asked for public comment on requirements for disclosures made using electronic communication. (See CF Library 5/22/00)Details
The premium for performing credit card portfolio sales is running about 800 basis points above the 1999 average sales price. Super prime portfolios, with chargeoffs of 3.50% or less, are now producing average premiums of 22%. The year-to-date results come from Thousand Oaks, CA-based R.K. Hammer Investment Bankers. According to the study, the number of deals completed so far this year has significantly exceeded the total deals completed in 1999. The data are based on portfolio sales with at least $15 million in assets.
PERFORMING CARD SALES
3Q/00 2Q/00 1Q/00 1999
# Card Deals 10 9 10 21
Card Assets Sold $12.2b $1.2b $3.7b $19.4b
Avg. Portfolio $ 1.2b $138m $370m $923m
Avg. Premium 17.20% 17.00% 17.50% 16.42%
Source: R.K. Hammer Investment Bankers
Red Lion Hotels & Inns Friday announced the addition of Alaska Airlines as its newest travel partner.
Alaska Airlines Mileage Plan members are now eligible to receive 250 or 500 miles for each qualifying stay, in addition to receiving Red Lion Club credits earned for each night’s qualifying stay at nearly 35 Red Lion Hotels & Inns across the Western U.S.
“Our new partnership with Alaska Airlines provides another ‘reward-winning’ choice for our business and leisure guests who stay at Red Lion Hotels and Inns across the Western U.S.,” said Tom Murray, chief operating officer of Red Lion Hotels & Inns and senior vice president — hotel division for Hilton Hotels Corporation. “This is just another way for us to say ‘thank you’ to our frequent guests for choosing to stay with us.” Alaska Airlines is a dominant carrier in the Western U.S. Along with Horizon Air, Alaska’s regional carrier in the Pacific Northwest, the Alaska Airlines network serves 73 cities — all in areas where Red Lion Hotels & Inns has the strongest brand recognition.
Alaska Airlines is equally enthusiastic about its relationship with one of the premier names in the hospitality industry. “Red Lion exemplifies the quality that we look for in a Mileage Plan partner,” said Gregg Saretsky, Alaska Airlines, senior vice president/marketing and planning. “This partnership is good for Alaska Airlines and Red Lion, and most important, it is good for our customers.”
The partnership includes the Red Lion Club program, which provides frequent guests with special discounts, complimentary late checkout times, and Red Lion Club Rewards. After staying the required number of nights, and then being eligible for a reward, guests may choose either a free night, a $50 U.S. Savings Bond, or 1000 bonus miles from participating airline partners. Alaska Airlines Mileage Plan now joins Northwest Airlines(R) WorldPerks(R) and American Airlines(R) AAdvantage(R) Program as travel partners of Red Lion, rewarding guests with program miles for specified room rates and with bonus miles in Red Lion Club Rewards.
Red Lion Hotels & Inns was founded in 1959 and is part of Hilton Hotels Corporation, recognized internationally as a preeminent hospitality company. The company develops, owns, manages or franchises approximately 1,800 hotels, resorts and vacation ownership properties. Its portfolio includes many of the world’s best known and most highly regarded hotel brands, including Hilton(R), Doubletree(R), Embassy Suites(R), Hampton Inn(R), Hampton Inn & Suites(R), Harrison Conference Centers(R), Hilton Garden Inn(R), Homewood Suites(R) by Hilton, Red Lion Hotels & Inns(R), and Conrad International(R).Details
BannerDirect, a direct marketing agency, announced this week it has formed a partnership with Digital Impact, Inc., San Mateo, CA, the leading provider of integrated eMarketing. Together the companies will create, design and implement national and regional eMessaging programs for BannerDirect’s clients. The eMarketing programs are expected to encompass customer acquisition, retention and analysis initiatives. “This alliance will expand BannerDirect’s stable of services offered to clients to make us even more of a one-stop campaign coordinator,” says Christine Fontana, president of BannerDirect.
BannerDirect chose to work with Digital Impact because of their strict advocacy of consumer rights and superior expertise in permission-based online messaging to platforms including email, set-top box and wireless. In addition, Digital Impact’s client-focus compliments BannerDirect’s client services mission statement.
“One advantage of eMarketing is that our clients can get a read on responses within hours,” says Susan Lasley, Senior Vice President for BannerDirect. Price, product or creative elements can be tested, analyzed and reworked within days instead of months. “Plus the level of responsiveness and personalization email messaging makes possible is much higher. It can truly become a one to one communication,” she says.
BannerDirect is a full-service direct marketing agency recognized for the development and execution of direct response marketing programs for clients in the financial, entertainment, telecommunications, association, retail and medical industries. Its service and expertise include: comprehensive marketing strategy and planning, creative development, production management, list procurement list processing and data analysis. A recognized leader in card marketing, BannerDirect is headquartered in New York City; Production, creative coordination and fulfillment are managed from BannerDirect’s Wilmington (NC) office, with sales offices in New York City, Milwaukee (WI), Carson City (NV), Charlotte (NC) and Brightwaters (NY).
Digital Impact is the leading provider of integrated eMarketing solutions that enable businesses to acquire, retain and analyze their customers. Through its combination of industry leading technology and world-class service, Digital Impact helps its clients maximize their marketing investment with campaign results that average double-digit click-through and triple-digit ROI’s. The Digital Impact technology platform is comprised of a web-based eMarketing Dashboard for campaign management, execution, reporting and analysis. On the back-end, the Mass Personalization Engine (MPE) targets, delivers and tracks billions of unique digital messages across a variety of media, including email, set top box, and wireless devices. Each message is personalized to contain offers based on the customer’s unique transaction data, demographic data, web logs, and external site browsing behavior. These campaigns are delivered only to customers who have specifically requested to receive them, a practice known as permission-based marketing. Digital Impact is a member of the TRUSTe Privacy Program and works only with companies that are advocates of strict consumer privacy guidelines.Details
The FTC’s Bureau of Consumer Protection is concerned about privacy and identity theft issues raised by the collection and use of personal financial and other information in personal bankruptcy proceedings. The BCB says that, in light of the highly sensitive nature of the collected data, and the technological ease with which it can be used to facilitate identity theft, the Government should consider to what extent highly sensitive information, such as a consumer’s social security number, must be included in public record data. The BCP also recommends that the commercial use of personal bankruptcy non-public data be prohibited. Reportedly bankruptcy trustees are contemplating compiling such non-public data into centralized databases for commercial sale or use. The BCP says that use of such data would be outside the scope of the trustee’s responsibilities, and may also breach the trustee’s fiduciary duty. Also the sale of detailed financial information may have implications under the FCRA.Details
Schlumberger Test & Transactions and Baltimore Technologies announced Friday they intend to develop and deliver solutions aimed at enabling wireless handset subscribers to digitally sign transactions using a mobile phone. The cooperation will involve integration between the Schlumberger regional data processing hubs and Baltimore ‘UniCERT’ to enable the bulk issuance of SIM/WIM smart cards containing digital certificates. Specifically, the solutions will be based on Baltimore’s certificate management system, ‘Telepathy’ and ‘Simera e-motion’, and Schlumberger’s ‘WAP 1.2’ compliant SIM/WIM card.Details
Equifax confirmed this morning it wants to dissect itself into two independent public companies. The Company’s Board of Directors approved a plan Friday to create an ‘Information Services’ company and a ‘Payment Services’ company. The Company intends to accomplish the separation through a spinoff of Payment Services to its shareholders. Equifax says it believes that spinning off Payment Services will help unlock the value of these businesses and provide the financial community with a more focused investment decision. Equifax stock price has been sagging since late 1998 and closed at approximately $27 per share on Friday. Equifax also noted this morning that its earnings for 2000 are on track and it expects to achieve EPS in the range of $1.67 to $1.71, consistent with current analyst estimates. For 2001, Equifax expects total revenue from both businesses in the aggregate to increase by 10-12%. For ‘Information Services’, the increase in revenue is expected to be in the range of 8-10% and, for ‘Payment Services’, revenue is expected to grow approximately 13-15% in 2001. The name for the new ‘Payment Services’ company will be selected later.Details
Canada’s Royal Bank began offering wireless transactional banking services including access to VISA account information this week. Royal has teamed up with Microcell Solutions to jointly offer the services. Microcell is a national provider of ‘Fido’ Personal Communications Services. The new service provides customers with the ability to access information on their bank accounts through their Fido wireless handsets, as well as perform a range of transactions, such as: check available credit lines and the last five transactions on VISA credit card accounts. Other options include: checking checking and savings account balances; paying bills; and transferring funds between accounts. Royal Bank Mobile Banking is the only wireless banking service in Canada to use Fido’s smart card technology to protect customer passwords. The handset’s smart card is also used to store the customer’s account and bill payee list. This allows customers to quickly initiate functions such as bill payment before connecting to the wireless network to execute the transaction. To activate ‘Access Finances’, current Fido customers must purchase a kit at the cost of CN$25. New customers can take advantage of this service by purchasing ‘Royal Bank/Fido In-a-Box’ for CN$75, which includes a Nokia ‘5190’ handset. ‘Access Finances’ is offered to Fido customers who subscribe to a monthly airtime package and can be accessed in all areas covered by Microcell’s PCS network in Canada. The service will be billed at 20 cents per request, starting December 16. Royal Bank’s Mobile Banking is offered to customers who subscribe to telephone or online banking service. The service is included free of charge with those services.Details
The world’s largest issuer of VISA corporate and purchasing cards unveiled a ‘VISA eProcurement Card’ yesterday. U.S. Bancorp said the new card helps companies fully capitalize on the potential of their electronic procurement engine implementations. U.S. Bank has alliances with six of the leading EPE providers: Ariba, Clarus, Concur Technologies, Extensity, Remedy and Valu.net. The new ‘eProcurement Card’ differs from traditional purchasing cards in that it: automatically reconciles transactions with all leading EPEs from the time the order is taken to when it is billed; enables a company to instantly set up a purchasing card account online that will track purchases from a specific supplier; tracks detailed data for sales tax reporting purposes; and offers suppliers pricing discounts for large ticket and large volume transactions. U.S. Bank’s Corporate Payment Systems customer base of more than 1,800 corporations currently include 169 ‘Fortune 500’ companies.Details
Providian Financial stepped up the pressure in the UK this week by signing a co-branded credit card agreement with the Argos Retail Group. ARG is a multi-channel general merchandise retailer with operations in the UK, where it is the largest catalogue retailer distributing millions of home shopping catalogues to consumers throughout the country each year. It also operates 460 retail stores under the name of Argos. Providian Financial has had a presence in the UK since April 1999, when the company established a branch of Providian National Bank in London. (See CF Library 4/30/99 and 9/1/99)Details
It’s deja vu all over again as the owners of the Discover Card filed suit against VISA International over VISA’s exclusionary membership rules. The issue between the direct competitors was settled in 1993 after winding its way through U.S. courts. However this time, Morgan Stanley Dean Witter has filed a lawsuit in the UK. MSDW alleges that VISA prevented it from acquiring the VISA card portfolio of Bank One’s UK and Canada credit card operations. MSDW issues MasterCards in the UK. MSDW says the dispute in the 1991-1993 litigation was different since it owns the Discover credit card network which covers the US. However Discover is a US domestic card only and MSDW does not own a competing network in the UK. In May of this year, Royal Bank of Canada purchased the Canadian retail credit card business of Bank One which included 30 affinity card programs. (See CF Library 5/19/00) FULL STORY:
ACI Worldwide said the licensing of its PRISM risk management solution to National Australia Bank for its operations in Australia and New Zealand to monitor ATM and POS transactions for credit card fraud has bee successful.
Since its inception in June, PRISM has already saved the National roughly A$2 million through the early detection of credit card fraud. Credit card fraud in Australia is growing at more than 30 percent per year and is expected to be on the increase throughout the Sydney Olympic Games.
! According to National Australia Bank’s George Beatty, General Manager Global Cards – Australia, the response from customers has been positive. “PRISM offers the National an advanced fraud-detection system that identifies subtle patterns of fraudulent behavior by comparing individual card and account usage with known patterns of fraud. When a suspicious transaction is found, the transaction is flagged for prompt and appropriate action. This allows the bank to block cards and save credit lines before they are lost,” he said.
“With the explosive growth in online and e-commerce transactions worldwide, it is imperative to put in place effective systems and strategies to deter fraudulent activity,” said Jim Bhujoharry, Managing Director of ACI Worldwide (Pacific). “Because PRISM learns from every transaction, it equips the National with the most effective defense against transaction fraud.”
PRISM employs neural network technology that works with existing authorization systems, operates on a wide range of hardware platforms and includes patented technology provided by Nestor, Inc. (OTC: NEST).
About ACI Worldwide
ACI Worldwide (Nasdaq: TSAI) is helping customers change the way the world works with solutions designed to improve the way we live, work and shop. Every minute of every day, financial institutions, retailers and networking industries rely on ACI solutions and services to smoothly move money and information. As a leading international provider of solutions for e-payments, ACI maintains operations in the Americas, Europe/Middle East/Africa and Asia/Pacific. More than 2,300 customers in 79 countries use ACI distributed solutions. Visit ACI Worldwide on the Internet at [www.aciworldwide.com].