TJX Hacker Pleads Guilty and to Serve 20 Years

The TJX hacker, Albert Gonzalez, who inflicted major payment card damage to Heartland Payment Systems, Hannaford Brothers, 7-Eleven and others is pleading guilty in federal court. He is expected to receive a sentence of between 15 and 25 years in prison. The latest agreement was filed in U.S. District Court in New Jersey, where the Heartland charges were filed in August. A federal judge transferred the case to Massachusetts, where Gonzalez is seeking to merge it with two other cases to which he has already pleaded guilty. Gonzalez was charged in August, accused of stealing more than 130 million debit and credit cards from card-processor Heartland and other companies. He had previously been charged in May 2008 and in August 2008 in Massachusetts with intrusions into TJX, OfficeMax, Dave & Busters, among other companies. He pleaded guilty to those charges in August and is scheduled to be sentenced in Massachusetts on Dec. 21 in both cases.

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Experian and Convoke Partner for Charge-Offs

Experian has partnered with Convoke Systems to offer the “Convoke Systems Platform” centralized repository used
to manage and provide real-time data on charged off accounts. The “Convoke Systems Platform” provides access to data, documents and chain of
title information for accounts that have been charged off and sold to
debt buyers or assigned to collection agencies and law firms. This
service provides quick and secure online access to information such as
the original application for credit, statement history and itemized
balance due, all of which are required or are becoming a requirement to
verify and validate legitimate consumer debt. Additionally,
the “Convoke” Platform benefits consumers by ensuring the
accuracy and integrity of their data and also helps in resolving and
validating account disputes. As charged-off debt and whole loans are
being bought and sold numerous times, the process of establishing the
chain of title generally has been complicated, making it difficult to
validate and resolve collection accounts.

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Noodles & Company Dishes Out a New Gift Card

Mac & Cheese, Pad Thai, Chinese Chop Salad and Pesto Cavatappi can now be facilitated for your loved ones with the new “Lunch Buddy Gift Card” says CardTrak.com. Noodles & Company has launched a gift card that sits on a tabletop easel and displays the giver’s photo. To personalize the card, the user can visit the “Lunch Buddy Support Center” to upload and print their photo. Or, select a photo of a stand-in “buddy” from a photo gallery provided on the site. Givers can even guarantee their buddy’s availability for the virtual lunch date by using a calendar blocker feature to choose a specific day and time for the lunch. “Lunch Buddy” cards are available in any amount at a Noodles location, or in $20 amounts if ordered online. And, like a buddy, the cards never expire. They can be reloaded at any Noodles location and reused for as many “lunch dates” as desired. Gift givers also are invited to participate in the “Lunch Buddy Photo Contest” launching in mid-December.

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Consumer Confidence Still Swings Wildly in Dec

Consumer confidence is again in a wishy-washy state. After faltering last month, consumers are now showing some signs of optimism.
The composite “RBC CASH” (Consumer Attitudes and Spending by Household) Index for December stands at 39.0, an eight point increase from November’s reading. The RBC “Investment Index” rose 10 points this month, to 46.9 from a 36.6 level in November. The RBC “Current Conditions Index” for December is standing at 37.0, up eight points from the November reading of 28.8. The RBC “Jobs Index” for December edged-up to 54.1, compared to 50.9 in November. The RBC “Expectations Index” for December jumped to 40.4, an 18 point rise from its 21.9 reading in November. RBC says overall consumer confidence remains low and susceptible to negative news, which could create more pointed
fluctuations in consumer confidence in the near- to medium-term period.

RBC CASH INDEX
Dec 08: 15.3
Jan 09: 13.3
Feb 09: 1.6
Mar 09: 8.2
Apr 09: 38.3
May 09: 43.0
Jun 09: 34.3
Jul 09: 22.4
Aug 09: 37.5
Sep 09: 40.0
Oct 09: 51.8
Nov 09: 30.2
Dec 09: 39.0
Source: RBC CASH

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CRL Slams the Credit Card Industry for Abuses

Credit card companies are at their drawing boards brainstorming ways to bypass Federal Reserve Board rules and a new federal law set to take full effect in late February 2010, as 80 million families with one or more credit cards continue to be hit with unfair interest rate hikes and fees. Issuers that hold over 400 million credit card accounts conduct practices the legislation is targeting, including manipulation of interest rates, padding of miscellaneous fees and a deceptive policy on late-payment fees. This, according to a new research report from the Center for Responsible Lending entitled “Dodging Reform: As Some Credit Card Abuses Are Outlawed, New Ones Proliferate,” show practices make it all but impossible for the average person to determine the real cost of credit card debt with issuers’ eagerness to exploit loopholes in the new federal rules underscores why lawmakers need to pass legislation to create the Consumer Financial Protection Agency. The report also spotlights the “pick-a-rate” practice, for which a card company tells cardholders their interest rate will be pegged to the prime rate, adding language to the issuer to pick the highest prime rate in a 90-day period – no longer a single day.

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Intl Payments Corp Hires Verus Exec as President

Merchant service provider International Payments Corporation has tapped Ron Carter, previously with Verus Financial Management,
as President. Carter served as President and COO of Verus Financial Management, where under his leadership the company’s revenues grew from zero to approximately $30 million in EBITDA before it was sold in a $325 million transaction to Sage Payment Solutions. At Vital Processing Services, then a partnership between TSYS and Visa, Carter served as Executive Vice President. Carter served as President of Network Systems at Alliance Data, where he led the acquisition and integration of Sears Payment Systems and Harmonic Systems. These acquisitions and others were part of strategy implemented just prior to the IPO of Alliance Data. Prior to ADS,Carter was the President of Buypass Corporation, now a wholly-owned subsidiary of First Data Corporation (FDC). Carter’s extensive experience in both operations and acquisitions will accelerate IPC’s recently announced $150 million strategic plan to acquire Independent Sales Organizations and merchant credit card portfolios.

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Aite Group Analyzes Healthcare Payments

A new report from Aite focuses on the opportunities for card networks to expand their presence in healthcare payments.
The Impact report provides a high-level market overview
of each market opportunity, organized by amount of potential dollars
gleaned, and based on qualitative interviews with decision-makers at
card networks. The healthcare industry recognizes the advantages that card industry
infrastructure can bring to the healthcare payments process. As demand
for such programs grows, card networks that aggressively pursue
partnering with payments solution vendors will benefit tremendously from
transaction-based revenue opportunities. In fact, Aite Group estimates
that the revenue opportunity from consumer directed healthcare (CDH),
patient-to-provider and payer-to-provider payments will amount to
US$10.5 million in 2012.

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OCT ABS

Charge-offs amongst credit card-backed securities remained in double digits for the fourth consecutive month in October. However, delinquency edged upward after four straight months of decline and after surging to a record 5.5% in May. The 60-to-180 day delinquency rose by 10 basis points in October to 4.9%. But, the Fitch “Charge-Off Index” stayed level at 11.4%. The Fitch “Monthly Payment Rate Index” dropped again in October to 16.2% from 16.9% in September. Month-on-month, the Fitch “Yield Index” dropped 20 basis points in October to 21.2% from 21.4% the previous month, although on a quarterly and annual basis, the Fitch “YI” registered an increase of 40 bps and 50 bps, respectively. Fitch noted that major blow was dealt to millions of bank customers, after a Supreme Court judgment overruled earlier court rulings that would have allowed the Office of Fair Trading to investigate the fairness of bank charges on overdrafts.

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Solveras Payment Solutions Adds a Portfolio

E-payment provider Solveras Payment Solutions has completed a merchant portfolio purchase
and integration. On a broader scale, Solveras Payment Solutions is seeking enterprise,
product line and/or portfolio acquisitions that will help accelerate the
company’s growth. Special interest will be paid to acquisitions that
will drive potential cross sell opportunities, introduce new
sales/product lines and open new distribution markets or channels. As
part of this strategy, Solveras Payment Solutions is actively pursuing
all payment and credit card processing portfolios from ISOs and
financial institutions nationwide.

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XOOM.COM

Xoom Corporation internet-based global money transfer company has
expended service to South Korea, allowing customers to send money online
directly to any bank account in the country. This expands on Xoom.com’s
initiative to provide immigrant communities fast, easy, convenient and
affordable alternative money transfer options. Founded in 2001, Xoom.com
allows customers to send money to 41 countries around the world, from
any internet-enabled computer using a credit card or checking account.
It’s availability in South Korea is in addition to availability in
China, India, Philippines, United Kingdom, South Africa, Mexico, and
Brazil, among others.

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Credit Card ABS Metrics Improve Tepidly in Oct

Fitch Ratings has published ‘Credit Card Movers & Shakers’ containing October 2009 performance.

Late payments on outstanding U.S. credit card balances rose again in October, falling just shy of record highs as U.S. consumers continue to struggle with debt loads amid the weak employment situation.

Detailed in Fitch’s latest Credit Card Performance Indexes, the results show late payments rising to their highest levels in five months and indicate higher chargeoffs in the months to come.

However, during October, Fitch’s Credit Card Chargeoff Index declined 66 bps to 10.09%, marking the third consecutive improvement. The three-month average excess spread also showed further improvement, increasing by 50 bps to 6.25% for the fourth consecutive month to its highest level since October 2008.

Despite the ongoing unfavorable trends, Fitch expects continued stability for current ratings of senior credit card ABS tranches given available credit enhancement and structural protections afforded to investors. The outlook for subordinate tranches remains negative. Fitch expects U.S. unemployment will peak at 10.3% in second-quarter 2010 and remain above 10% throughout 2010.

‘Credit Card Movers & Shakers’ is available on the Fitch Ratings web site at ‘www.fitchratings.com’ under the following headers:

Structured Finance then ABS then Newsletters

Additional information is available at ‘www.fitchratings.com’.

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