Holiday Buy Button Clicks Rise 28% in 2008

Since November 1st, online sales are ahead of last year by 15%, but the average ticket gap has begun to narrow during recent weeks, down 10% versus last year. The latest tracking also reveals that Tuesday, December 16th has staked its claim as the busiest online shopping day of this year in terms of transactions. The “Pulse Index” from Chase Paymentech shows that to-date, transaction count for the holiday shopping season remains ahead of last year by 28%. Friday, December 19th appears likely to be the last strong day for transactions due to shipping deadlines. Chase Paymentech monitors the daily activity of 25 of the largest 150 Internet retailers. The latest figures show a transaction count for December 16th of 3.96 million and sales of $210.0 million. However, the highest day this year for online sales dollars was Tuesday, December 2nd with $218.9 million. Chase Paymentech noted that the numbers for the holiday season are front-loaded, so current gains will be affected by this year’s shortened shopping season.

E-SALES
Dec 8: $138.7 million
Dec 9: $215.3 million
Dec 10: $177.7 million
Dec 11: $186.5 million
Dec 12: $169.6 million
Dec 13: $141.4 million
Dec 14: $110.2 million
Dec 15: $177.4 million
Dec 16: $210.0 million
Dec 17: $217.6 million
Dec 18: $199.5 million
Source: Chase Paymentech

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EXTRICATION INCARCERATION

The Competition Bureau announced that Lloyd Prudenza has been sentenced
to 15 years in
jail by The U.S. Federal Court in the Southern District of Illinois for
his part in a cross-border deceptive
telemarketing scheme that defrauded close to 40,000 consumers.
Prudenza, Dalglish and Anderson were the principal operators behind
First Capital Consumers Group, which defrauded vulnerable American
consumers who had poor credit histories.
Working out of boiler rooms in Toronto in 2001-2002, telemarketers
targeted U.S.
residents, claiming they had been approved for a MasterCard or Visa
credit card. The victims were required to pay a one-time processing fee
(approximately $200 U.S.) prior to receiving one or both cards, but
never received a valid credit card. This deceptive telemarketing
operation generated approximately $8 million U.S. Prudenza, Dalglish and
Anderson were arrested following an investigation
led by the Competition Bureau. They were charged with offences under the
Competition Act and the Criminal Code, including: deceptive
telemarketing; conspiracy to commit an indictable offence; fraud; and
possession of property obtained by crime. Earlier this year, Dalglish
was sentenced to 19 years and seven months
in prison, and Anderson was sentenced to 23 years and four months, for
their roles in this scheme. All three individuals were jointly ordered
to pay over $5 million U.S. in restitution to the victims.

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Paymo Takes Aim at the U.S. Market in 2009

A new payments platform that enables consumers globally to buy online and pay with their mobile phone has been introduced. San Francisco-based Paymo will offers its new service in 39 markets worldwide including the USA with a potential market of more than three billion mobile consumers. Paymo notes that 70% of the world’s online population does not have a credit card. With the new service users only need to enter their mobile phone number to initiate a transaction and confirm the purchase via a text message. The purchase will be billed directly to their mobile phone. The Company plans to start accepting payments from U.S. consumers in the first quarter. Paymo was founded by
Paul McGuire and Margaret Mackenzie. McGuire previously co-founded mBlox, a global mobile transaction network. Mackenzie was the former CFO for mBlox. Among countries participating with Paymo: Australia, Hong Kong, Russia, Saudi Arabia, Canada, South Africa, Egypt, United Kingdom,
France and Vietnam.

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QUATRRO RISK

Financial risk management service provider Quatrro Risk
has extended its payment fraud risk management services to the
Australian market. Quatrro Risk’s fraud management solutions have helped Banks around the
world save hundreds of millions of dollars in losses thereby providing a very high
ROI. Of special focus is ‘Card-Not-Present’ (CNP) fraud management which is contributing significantly to the frauds in the Australian
market. Quatrro provides an “end-to-end” solution — from risk
advisory, risk operations, risk analytics to expert systems is a large
differentiator for clients looking to make significant improvements to their risk
management framework in both operations and strategy areas.
Quatrro Risk also offers credit early warning services and anti-money
laundering operations services for retail banks and consumer finance companies.

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CompuCredit Settles with the FDIC and FTC

Atlanta-based sub-prime credit card specialist CompuCredit has agreed to shell out $120 million to settle FDIC and FTC concerns over its past marketing practices. Under terms of the deal, the issuer will credit $114 million to certain customer accounts that were opened between 2001 and 2005 and subsequently charged-off or were closed with no purchase activity. This amount involves mostly non-cash credits — in effect, reversals of amounts for which payments were never received. Cash refunds to consumers are estimated to be approximately $3.7 million, and the Company also agreed to pay $2.4 million to the U.S. Treasury. The settlement with the agencies relates to marketing practices from 2005 and prior years, does not require any change to CompuCredit’s existing marketing or servicing practices and does not have a material impact on CompuCredit’s financial condition. CompuCredit markets the “Aspire Visa” card series.

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The Consumer to be Largely Absent in 2009

A credit ratings firm projects unemployment may reach 8.3% in 2009,
credit losses will likely rise above historical peaks and overall demand
for credit will be extremely weak as consumer spending declines by 1.6%.
Fitch Ratings says the U.S. consumer will be largely absent next year,
significantly impacting the profitability for all consumer-oriented
finance companies. Therefore, the 2009 outlook for the U.S. Finance and
Leasing sector remains negative and incorporates negative rating
outlooks for both the consumer and the commercial finance segments.
Fitch expects companies within the sector will face difficult business
conditions and operating performance will weaken further in 2009. The
risks of market illiquidity will continue to cast a broad negative
shadow until capital market conditions stabilize and companies are able
to raise debt and equity capital on a cost effective basis. However,
Fitch notes that its recent analysis indicates credit card ABS ratings
can likely withstand the impact of a severe recession in 2009. As part
of its deterministic stress testing analysis, Fitch factored in a 50%
increase in charge-offs, a 15% decline in yield and a drop in monthly
payment rates by 20% over the next 12 months. Results of the analysis
reveal that ‘AAA’ ratings would be unaffected while certain subordinate
bond ratings could drop by up to three notches. (CF Library 12/16/08)

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Bukoo Offers a Personalized Catalogue

KY-based BukooGifts.com has launched a gift-giving service that bypasses
the use of gift cards.
Consumers choose the amount they want to spend, the recipient’s email,
and when
they want it to be sent. The recipient will receive an email with
redemption details, and can go online immediately to choose from
hundreds of products in the gift catalog. Recipients never see the
actual dollar amount of the
gift, they only see a catalogue of products they can choose from.
BukooGifts.com
also features a gift and incentive program for companies geared toward
increasing company sales and
employee retention through unique gifting and incentive programs.

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Goozex Cards Access Video Game Library

MD-based Goozex has released new gift cards for the video gamer. Goozex
Gift Cards are sold in several different Goozex points and tradecredit
combinations. Goozex points are the virtual currency used on the game
trading site
and trade credits are the fees paid to receive games. The cards are
given to
recipients either electronically via email or can be printed. Gift card
values range from $5.00 to $270.00. Goozex.com is the leading video
game trading service
based on an automated point system. Games are assigned a point value
based on several
factors including supply and demand, and users earn points when trading
their games with other users. Points can then be redeemed for other
video games. The
system offers its users a fair market value for their games and
guarantees all
trades. On average, members can save $16.50 per game trade as compared to
traditional used game retail stores.

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Lower Gas Prices Offset Higher Food Prices

Survey results from retail analytics frim Precima indicate that 48% of
respondents are spending gas savings on groceries,
42% are saving and 37% are buying holiday gifts. Another 30% is using
the lowered gas prices toward the pay down of credit cards.
Among those survey respondents who said they’ve suffered a direct financial
loss during the recession, 55% said they’re spending gas savings on
groceries, and for those whose annual income is under $35,000 the number
is 59%. Conversely, 34% of retirees said they’re spending gas savings on
groceries. The number fell to 29% for those whose annual income exceeds
$100,000. In another significant finding from the survey, nearly
two-thirds of
respondents said the recession is changing the way they plan their
grocery trips, particularly in regards to pantry-loading, with
27% of consumers stating they can no longer afford to stock up on food and
now buy only what they need week to week and another 35% said they stock up
more than they used to, but only when items are on sale. Of the 65% of
respondents who said their stocking habits have changed,
5% said they stock up more, 54% said they stock up only when items are
on sale, and 41% no longer stock up at all.

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CyberMonday.com Supports the Greenly Fund

Shop.org.’s website CyberMonday.com has raised $400,000 for the “Ray
M.Greenly Scholarship Fund”. The Scholarship Fund was established to provide
financial support to students pursuing careers in the e-commerce
industry and commemorates the life of Ray Greenly, a valued online
retail industry veteran who passed away in 2005. Ray served as the Vice
President of Research and Member Services of Shop.org for almost seven
years and was responsible for the management of The State of Retailing
Online, and Shop.org’s membership. According to Mall Networks, which powers the website, shoppers have
spent more than $12 million through CyberMonday.com this holiday season
and more than $23 million since the website was launched in November
2006. The website had 2.4 million unique visitors on Cyber Monday alone,
up from 1.5 million on Cyber Monday 2007.
Shop.org’s 700 members include the 10 largest retailers in the U.S. and
more than 60 percent of the Internet Retailer Top 100 E-Retailers.

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HOLIDAY SPENDING

Payment processor Paymark reports that New Zealanders have spent a
total of $1.76 billion across the network in the first two weeks of the
month, up just 1.7 percent compared to the same fortnight in 2007.
Paymark has processed more than 33 million transactions during the month
to date, which is up 6.7% on last year. Paymark processes more than
three quarters of all in store electronic
transactions in New Zealand. Last year Kiwis spent more than $4 billion
through the Paymark network in the weeks before Christmas. Paymark will
be working hard to ensure these transactions are processed as smoothly
and efficiently as possible.

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