U.S. Credit Card ABS to Get Further Scrutiny

The respected Fitch Ratings service has placed 13 of its U.S. Credit
Card ABS deals ‘Under Analysis’, indicating that Fitch will be issuing a
rating action within 30 days. However, of the 92 rated domestic ABS
transactions, 79 were designated with no in-depth review necessary. The
three-month average for charge-offs among U.S.credit card ABS remains at
6.3% while the monthly payment rate has declined to 19.1%. Among master
trusts, Washington Mutual posted a 12-month average charge-off rate of
11.76%, compared to Capital One’s 6.70% and Chase’s 5.12%. Washington
Mutual also posted a 12-month average monthly payment rate of 10.03%,
compared to Capital One’s 18.79% and Chase’s 17.78%. According to Fitch
Ratings’ new ‘U.S. Credit Card ABS Tear Sheet’, the three-month average
for portfolio yield was 17.7%, while delinquencies came in at 3.1% and
excess spread at 7.4%. (CF Library 9/4/08)

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PAYZONE/SCHLECKERPA GIFT CARD

Payzone is set to launch the countrys largest electronic gift card system for cosmetics and household retailer, Schlecker. The new gift card will be available for purchase from mid-September at more than 10,000 Schlecker stores. To support the launch a comprehensive advertising campaign will be launched in daily newspapers and across Schlecker shops. Payzone is the new company formed from the merger of alphyra Holdings Limited with Cardpoint. Schlecker has over 14,000 shops across Europe.

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Bankrate Acquires Bankaholic.com for $12MM

Bankrate has nailed another deal to expands its reach into the online banking and credit card channel. Bankrate paid $12.4 million for
bankaholic.com, a one person firm, with a $2.5 million earn-out. Bankaholic provides rate information on savings products, such as certificates of deposit, savings accounts, and money market accounts, as well as insurance quotes and a comparison of the best credit card offers, which are currently powered by Bankrate. In addition, Bankaholic offers consumers advice and information that allows consumers to comment and rate banks and their promotions through social networking features.
Earlier this month, Bankrate announced a deal to acquire the one-full-time employee Web site of CreditCardGuide.com for $32 million in cash, plus $10 million in earn-outs. Bankrate previously acquired Memphis-based NCS for $26.4 million in cash with a $7.0 million earn-out. (CF Library 9/12/08)

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Capital One Raises a New Bar in Giving

Capital One announced the launch of the “No Hassle Giving” site. COF will cover the transaction costs for every donation, ensuring that 100% of the donation is delivered to charity. In partnership with the non-profit “Network for Good,” the “No Hassle Giving” site offers a comprehensive database of more than 1.2 million verified U.S charities as provided by GuideStar, the major source of information on U.S. non-profit organizations. Cap One notes that only 18% of respondents report that they have cut back on other spending in order to make regular contributions during the past 12 months.

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Heartland Certifies VeriFone’s ON THE SPOT

Heartland Payment Systems has certified VeriFone’s “ON THE SPOT”
pay-at-the-table managed services solution and is marketing the POS
technology to restaurant customers under the Heartland “Tableside”
brand. Tableside utilizes the VeriFone “Vx 670” handheld system with Wi-Fi and
the managed services model that VeriFone developed.
The “Vx 670” improves the customer experience by reducing the time and
number of steps to complete the payment transaction while virtually
eliminating the potential for card skimming or tip alteration. In
addition, Heartland Tableside enables restaurant operators to comply
with Payment Card Industry Data Security Standards (PCI DSS)
requirements by storing card transaction information on a secure remote
IP gateway.

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U.S. Credit Card Marketing Stalls in 2Q/08

Advertising expenditures in the first six months of this year declined
by 1.6% as compared to the same period in 2007. TNS Media Intelligence
says ad spending during the second quarter was
off 3.7% versus last year, the steepest quarterly drop since 2001.
Financial services advertising remained stalled and finished the half
year flat at $4.5 billion. Credit card marketers pulled back on
spending toward the end of the period, while retail bank advertising
picked up momentum, an outcome of the need to attract consumer deposits
in the face of widening liquidity concerns.

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MySpace IMPACT/PayPal Widget is Introduced

PayPal and MySpace have introduced the “MySpace IMPACT/PayPal” fundraising widget. The new tool enables consumers to collect donations from their friends and family for non-profit organizations. To celebrate the new widget, PayPal and MySpace are announcing a contest for customers and non-profits, featuring weekly prizes and $20,000 cash. Currently there care more than 100,000 non-profit organizations that use PayPal. Between now and October 13th, PayPal and MySpace will award the person who raises the most money through the fundraising widget two tickets to the “Grammys,” and will offer non-profits the chance to win $20,000 in cash.

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FTC Sells a Mercedes for Consumer Redress

The Federal Trade Commission announced a court order that will
force FL-based Financial Advisors and Associates to pay $1 million in redress to defrauded consumers.
In May 2008, as part of the joint federal, state, and local ‘Operation
Tele-PHONEY’ law enforcement sweep, the Commission charged Financial
Advisors & Associates Inc. and its principal James Sweet, doing business
as Freedom Financial, with fraudulently telemarketing consumers in an
attempt to sell them advance-fee “credit cards.” According to the FTC,
Freedom Financial called consumers pitching an
advance-fee “credit card” that could be used just like a traditional
Visa or MasterCard, but which in reality only could be used to buy goods
from Freedom Financial’s own catalog or Web site. Before receiving the
cards, consumers had to pay 10 percent of the “credit line” as a down
payment – typically between $200 and $300 – that was debited from the
consumers’ bank accounts. The defendants also told consumers that they
would repair consumers’ credit scores by reporting payment histories to
the major credit bureaus, but never did so.

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Affinion Group Unveils the AD Silver Product

Loyalty marketer Affinion Group has announced the addition of the “AD
Silver” insurance program to help protect their families against the
financial hardships associated with accidental injury and death. AD
Silver’s basic coverage is generally offered as a benefit provided
though Affinion Group’s banking and credit card partners. Enrollment
for the primary insured is guaranteed (for those 40 years of age or
older) and there is no physical required or medical questions to
answer. In addition, there is no minimum age requirement for the
insured’s spouse. There is no termination age and no age reduction in
order to qualify, and no reduction in benefits as policy holders age.
Additional features of the AD Silver insurance plan include an
anti-inflation benefit with stepped increases up to 125%of originating
amount of insurance, with continuous coverage for each two-year anniversary;
doubling of the benefit amount for a fare-paid Common Carrier accident
resulting in loss of life of insured; income benefits (up to $1,500 a
month) for hospital stays lasting longer than seven days, and up to one
year due to a covered accident with an increase of benefits by 50% if
loss of life occurs while riding or driving an automobile and a seat
belt is worn at the time of a covered accident. AD Silver is
administered through The Hartford.

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Maine State CU Partners with Pemco

Payment solution provider Pemco has been selected by Maine State Credit
Union for credit card processing and the “Pemco Extra Awards” loyalty
program. Maine State CU holds $240 million in assets. Pemco Technologies
provides payment solutions to the financial industry including credit
signature processing, debit signature and PIN-based processing, ATM
services including one of the largest surcharge-free ATM networks,
cardholder award programs, portfolio-growth programs, fraud
management/detection/prevention, prepaid card services, and personalized
photo cards.

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Cap One Projects 7% Charge-Offs in 4Q/08

VA-based Capital One projects that its charge-off rate for its U.S.
Card line of business to be in the low 6% range for the third quarter,
rising to around 7% in the fourth quarter. The company also expects a
low single-digit decline in year-end managed loans, and double-digit
growth in year-end deposits. The company expects low to mid-single digit
revenue growth. If revenue margins remain at or near second quarter
levels, COF expects to be toward the lower end of this range for full
year 2008. The Company also expects to build its allowance for loan
losses by approximately $200 million in the third quarter, consistent
with the company’s expectation of continuing weakness in the U.S.
economy, as observed in recent trends in economic indicators, including
home prices and the unemployment rate.

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Hypercom Names a New Engineering Exec

Hypercom has appointed Robert J. Miklosko, previously with Magellan Navigation,
as Vice President of Global Engineering, Research and Development.
Miklosko has more than 20 years experience in wireless and consumer
electronic planning, design and development and project and product
management. As Vice President, Worldwide Engineering at Magellan
Navigation, Miklosko directed all aspects of
the company’s research and development, including a cross-functional
engineering team of more than 100 engineers across three global
development sites. He transitioned a vertically structured engineering
organization into a leveraged and scalable open development model using
ODM (original design manufacturer) and third party outsourcing, and
reduced R&D investment while more than tripling the number of annual
product launches. Miklosko holds a M.S. in Technical Management from
Johns Hopkins University, a M.S. in Electrical Engineering
from Polytechnic University and a B.S. in Electrical
Engineering from Pennsylvania State University.

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