A lawsuit was filed yesterday against U.S. Bank by the Minnesota Attorney General for allegedly releasing customers’ private banking information to a telemarketing company in exchange for a fee of $4 million plus a 22% commission on each sale. The suit also alleges that some of commissions were generated through bogus, unauthorized charges by CT-based MemberWorks, the telemarketing company involved. Minnesota says U.S. Bank violated the federal Fair Credit Reporting Act and engaged in consumer fraud and deceptive advertising by providing the telemarketing vendor with such private information as: SSN numbers, account balances, transaction history, credit limits, credit insurance status, year to date finance charges, automated transactions authorized, credit card type/brand, number of credit cards, cash advance amount, behavior score, bankruptcy score, date of last payment, amount of last payment, date of last statement, and statement balance. The lawsuit also accuses U.S. Bank of approving telemarketing scripts that contained deceptive information. For example, if a customer asked a telemarketer if U.S. Bank had given the customer’s credit card or checking account number to the telemarketer, the script instructed the telemarketer to answer “No, I personally do not have your account number.” The MN AG’s office is asking that the court to prohibit the bank’s exchange of customers’ personal information and order the bank to pay civil penalties to consumers. They are also calling upon Congress to enact legislation to protect consumers’ rights to financial privacy.Details
CA- based software developer IMSI Thursday announced that a number of its top products are included on VISA International’s new Visa.com list of ten “World’s Best for Business” offers. VISA cardholders will receive a 20% discount when they use their ‘VISA Business Card’ to purchase ‘TurboCAD 2D’, ‘NetAccelerator 2.0’, ‘MasterClips 303,000’ or ‘FloorPlan 3D Design Suite’.Details
NextCard yesterday announced that its Affiliate Network has been named one of the top ten affiliate programs on the Web by Refer-it.com. With over 12,000 active affiliates, the NextCard Affiliate Network is the largest affiliate network for a financial institution. Refer-it.com, the leading search engine for affiliate programs, has awarded the NextCard Affiliate Network a perfect 3 star rating for excellence in every category, including efficient online reporting, customizeable content, superior customer service, easily navigated user interface and substantial revenue sharing. NextCard offers a minimum of $20 for each new account booked through an affiliate site, and provides a huge selection of banners and buttons to use in promoting the NextCard Internet Visa on Web sites.Details
TNB Card Services, a subsidiary of Dallas-based Town North National Bank, has contracted with EDS for image-based payment processing for its credit card receivable payments. The multiyear outsourcing agreement includes remittance processing through EDS’ ‘Remittance Network’ in addition to current services that include the ‘BMIS’ retail banking product, back-office operations and Internet banking, which EDS already provides for Town North. ‘Remittance Network’ is a client/server, Intel-based, Windows NT 4.0 system that processes 90 million remittance transactions on behalf of EDS clients each year. The processing services are enhanced by ‘EDS*PAY Concentration Services’. These services allow TNB Card Services to electronically receive payments originating from more than 6,000 home banking applications and credit counseling agencies.TNB Card Services was formed in 1975 by a group of credit unions and has more than 400 customer credit unions across the Southwest issuing VISA/MasterCards to three million members.Details
MerchantOnline.com Thursday announced that it has signed an agreement with NY-based Fine Point Technologies to be the exclusive provider of e-commerce services. MerchantOnline.com will market its e-commerce services to Fine Point’s Total Internet clients, which combined have purchased more than 1 million Total Internet end-user licenses. Services provided by MerchantOnline.com under the agreement include real-time credit-card processing and MOL-e-check transactions online, utilizing the MerchantOnline.com front- and back-end processing network.Details
FL-based Siemens Information and Communication Networks unveiled yesterday its largest-ever smart card pilot program to manage health information and simplify administration of the state’s health and food benefits. The ‘Health Passport Project’ will be rolled out over the next four months across three Western communities in ND, WY and NV. The first application of the ‘Health Passport’ will be initially targeted at pregnant women, mothers and children in the pilot communities who are eligible for a number of public health programs, including Medicaid; Immunization; WIC; Head Start; and Maternal and Child Health Services. Open Domain of San Ramon, CA is programming the smart cards and and Louisville, KY-based Stored Value Systems is responsible for the WIC EBT application. Computer chips from Siemens’ Infineon Technologies are being used in the smart card devices.The program will be formally presented to the governors of 11 other states next week.Details
Providian was hit with another lawsuit yesterday in the wake of widespread consumer complaints over its credit card practices. The Seattle office of the law firm of Cohen, Milstein, Hausfeld & Toll filed a lawsuit last week in the Superior Court of the State of California for the County of San Francisco on behalf of Providian credit card holders. Lieff, Cabraser, Heimann & Bernstein of San Francisco is also representing Providian credit cardholders. The suit alleges, among other things, that Providian has extracted unlawful, excessive late charges and other penalties from its credit card holders for unwanted “credit protection” insurance and other hidden fees. Last week shareholder litigation specialist Wolf Popper filed a class action lawsuit on behalf of Providian shareholders. All the suits are in reaction to an investigation by the San Francisco District Attorney’s Office into Providian’s credit card practices. News of the suit broke May 20 in the San Francisco Chronicle and CardTrak/CardFlash. Providian’s stock slid more than 40% since the news broke however it has moderated this week, closing yesterday at 83 1/8.Details
The Credit Store, Inc. announced that it completed its third securitization of performing credit card receivables. The transaction involved the sale of approximately $6.2 million in seasoned credit card receivables to a wholly-owned qualified special-purpose corporation, TSC Funding III, Inc., that was established for this transaction. The receivables were fully current and had been seasoned in excess of eight months.
This transaction was funded, in part, by a $4.0 million term loan from Miller & Schroeder Investments Corporation of Minneapolis, MN. The excess of the purchase price for the receivables over the cash proceeds will be retained by The Credit Store as a capital contribution to TCS Funding III. The Credit Store will continue to service the credit-card receivables sold to TSC Funding III on a fee basis. The Credit Store completed similar securitizations in Sept. and Dec. 1998, for approximately $6.5 million and $7.8 million in credit card receivables respectively.
Martin J. Burke III, chairman and chief executive officer commented: “We are pleased with this, our third transaction, which demonstrates a growing market for our performing credit card assets. Our first two securitized transactions continue to perform well within modeling parameters. We believe we are demonstrating the continued saliency of our business plan and are well on our way defining a new niche in the consumer credit marketplace.” The Credit Store, Inc. is a nationwide financial services company engaged in the acquisition and collection of non-performing consumer receivables and the origination and servicing of credit cards. The Company acquires portfolios of non-performing consumer debt at substantial discounts, and then uses its direct marketing expertise to contact and negotiate settlements with consumers, most of the time placing settlement on new unsecured credit cards offered through The Credit Store.Details
Twenty-three workshops, keynote addresses and breakout sessions highlight this year’s EBT–The Next Generation, a three-day national conference on the future of Electronic Benefits Transfer Systems. The EBT Industry Council of the Electronic Funds Transfer Association hosts the annual conference.
In announcing this year’s agenda, EFTA Executive Director H. Kurt Helwig said, “EBT–The next generation may be the most thorough compendium of information on EBT ever presented at one time.”
The conference scheduled for November 7-9 in Washington, DC, will include two tracks of workshops for both beginning and advanced EBT practitioners, said Helwig. These include sessions on retail technology and the art of marketing high-technology projects.
Breakout session topics include government electronic commerce, non-US EBT applications, a debate on online v. offline EBT applications, and separate biometrics sessions covering both technology and applications for EBT. Helwig noted that this year’s conference will include a number of sessions on EBT and retailing, such as Retailers and Technology, Retailers’ Views on the Next Generation of EBT, Point-of-Service Integration, Advanced Transaction Technology, and Advanced Card Technology.
About EBT–The Next Generation
EBT-The Next Generation is an annual conference devoted to the business, technology and policy issues of using advanced electronic technology for the delivery of government funds and services. This year’s conference, to beheld at Washington’s Madison Hotel, is expected to attract several hundred people.
About the EBT Industry Council
The EBT Industry Council is the nation’s longest standing trade group dedicated to the business and policy issues of Electronic Benefits Transfer systems and technology. Its members include Citicorp Services, Inc., Deluxe Electronic Payment Systems, Concord EFS, and Network Decisions, Inc.
About the Electronic Funds Transfer Association
Now in its third decade, the Electronic Funds Transfer Association provides inter-industry leadership for the advancement of electronic payments systems and commerce. Its members include Visa, MasterCard, American Express, Discover, and virtually all shared ATM systems in the country. Its Web site, efta.org, contains a full list of members and more information.Details
The market for chips for contactless smart cards is expected to grow at an average 80% per year, leading to a 15% share of the total smart card chip market after 2000, according to a survey of the smart card chip market published today by SJB Research. And, after last year’s growth slowdown and overcapacity problems in the smart card chip market, manufacturers are looking forward to an upturn that will see chip prices stabilising and even increasing.
The survey, in the June edition of SJB’s card industry newsletter, Card Technology Today, includes leading smart card chip manufacturers’ views on emerging trends in the industry, as well as providing detailed tabulated information on the product offerings and status of 15 major smart card chip manufacturers around the world. A demand for phone cards will spur the market for security memories (both contact and contactless), resulting in an average annual growth rate of 10% through to 2003 reports the Ctt survey. Card Technology Today is an industry newsletter, published ten times each year, and available by paid subscription only from SJB Research.Details
Toronto-based Oasis Technology has installed a high-performance payment gateway to handle millions of bank and credit card authorization transactions for France’s Carte Bleue. The gateway is enabled by Oasis Technology’s ‘IST/Switch’ E-commerce payment system and was installed in less than four months. Carte Bleue holds the VISA licenses for France and operates a gateway between France and the 200 other countries in which ‘VISA’ cards are used for payments. Last year 74 million authorization transactions were processed through the Carte Bleue VISA gateway. VISA authorization transactions passing through the Carte Bleue gateway have been increasing at a compounded annual growth rate of 36%.Details
Diebold has been awarded a $6.5 million contract by the Co-Operative Bank to supply ATMs in the Co-Operative Retail Societies’ convenience stores throughout the UK. The contract marks the first committed roll out of ATMs into retail locations in the UK. Diebold is providing a combination of models, which will include the small counter top ‘1060i’ cash dispenser, the ‘1071ix’ through-the-wall unit and the ‘CashSource Plus 400’. The Co-Operative has 2,500 retail sites in the UK and the order for 350 ATMs represents the initial part of the program.Details