The U.S. Senate Committee on Banking, Housing, and Urban Affairs heard an earful yesterday from consumer advocates, regulators and Senators as it opened hearings on credit card practices. Most of the criticism centered on penalty/default pricing and disclosure with a strong call for the industry to clean up its act before Congress does. Acting Comptroller of the Currency Julie Williams told the panel that there is room for improvement in credit card disclosure. However, she pointed out that the OCC does not have statutory authority to issue regulations defining particular credit card or practices or regulations setting standards for disclosures. The OCC has asked Congress to change this. Federal Reserve Governor Edward Gramlich yesterday testified that since the FRB began a review of “Reg Z” in December it has received a strong response during the public comment period. He said consumers believe there is not enough advance notice for changes in terms, and believe a much longer time period is needed to find alternative credit sources. For rate (and other) changes not involving a consumer’s default, a number of creditors support a thirty-day notice rule and a few support a consumer “opt-out” right under “Reg Z.” He also said the Board received suggestions for standardizing payment cut-off hours in ranges, such as between 3 p.m. and 5 p.m. for mail delivery and 6 p.m. and 8 p.m. for electronic payments. Gramlich noted that 39% of the 2,300 complaints against state member banks processed by the Board last year were complaints about credit cards.Details
American Express has launched a prepaid, reloadable card version of its popular paper-based “Travelers Cheques.” The new “Travelers Cheque Card” is being pitted against bank-issued debit cards as a safer travel alternative since it is not linked to a bank account and can be refunded in 24 hours. Furthermore, AmEx says a recent survey showed that 42% of consumers fear a lost or stolen debit card could also put them at risk for identity theft. The card is available in U.S. Dollar, Euro and British Pound Sterling, enabling consumers to lock in exchange rates, unlike debit cards that are subject to each bank’s exchange rates. The new “Travelers Cheque Card” requires a minimum initial load of $300 and a maximum of $2,750 and carries a $14.95 issuance fee per card. Reloads can be added in $50 increments with a $100 minimum. There is a $5 reload fee. A maximum of $400 daily can be withdrawn by ATM but a $2.50 fee applies, plus any applicable surcharges, for each transaction. To kick-off the new product AmEx is offering a free companion air ticket to customers purchasing the card before October 15thDetails
FreeStar Technology has named Angel Pacheco to the position of Chief Technical Officer. Prior to FreeStar, Pacheco was the CIO for Blackstone Calling Cards and a specialist in prepaid product distribution. Helsinki-based FreeStar Technology is a payment processing and technology company operating a robust Northern European “BASE24” credit card processing platform. The Company currently processes
approximately 1,000,000 card payments per month for an established
client base that comprises companies such as Finnair, Ikea and Stockman.
Hypercom announced that its Board of Directors has reaffirmed its previously authorized share repurchase program of up to $10 million of the Company’s common stock. The company has $9.7 million available for repurchase under the previously announced share repurchase program. Hypercom is a global payment technology provider.Details
Atlanta-based RBS Lynk has promoted Nerino Mayer to VP/Indirect Sales and has hired Lori Breitzke, formerly with Ingenico and VeriFone, as VP/Prepaid Products. Mayer will be responsible for developing RBS Lynk’s indirect sales strategy to increase strategic partnerships and referral programs. Prior to joining RBS Lynk, Mayer worked in business development roles for Hewlett Packard, VeriFone, and Hypercom, leaders in payment processing equipment and technologies. His industry background includes development of eCommerce payment platforms. Prior to joining RBS Lynk, Lori Breitzke worked in a variety of business development and marketing positions at leading terminal and card products companies, including VeriFone and Ingenico. Breitzke brings substantial experience in a variety of prepaid products. RBS Lynk is a single-source provider of electronic payment processing services and is a member of The Royal Bank of Scotland Group.Details
Ho Chunk Nation, Wisconsin’s largest casino operator, has renewed its contract with Cash Systems for check cashing, ATM and credit and debit card cash advance services. Cash Systems also provide wireless cash access services to remote areas of the casinos. The Ho-Chunk Nation operates the Ho-Chunk Casino,Rainbow Casino, Majestic Pines and DeJope casinos. Cash Systems, Inc.is a provider of cash access and related services to the retail and gaming industries.Details
CIT Brazil will implement the Experian-Scorex Transact application processing and decision support solution with its new business management environment. Managed and hosted by Experian-Scorex, the Web-based solution will manage CIT’s application process, accessing both internal and external data sources, such as credit bureau, to enrich the new applicant data. “Transact” supports multi-bureau connections, centralized operational workflow with Web-based distribution, the deployment of credit scorecards, customer segmentation, credit decisioning, terms settings and champion/challenger testing. Experian-Scorex maintains connectivity with over 70 credit bureaus worldwide.Details
A new study has found that credit card issuer Web sites have poorer than expected reliability and performance. The research by Keynote said it appears that many issuer Web sites were designed with only high-speed users in mind, creating very poor performance for customers using a dial up connection. Keynote says about 43% of U.S. households are still using dial up. However, the report showed that two-thirds of the sites studied showed a good ability to handle load indicating that the industry has paid attention to developing its infrastructure and adding capacity to handle peak loads. Keynote’s analysis of nine sites showed that Bank of America, Capital One and MBNA were the best overall performers garnering 77, 66 and 63 points out of 100 possible points respectively, although Bank of America dominated the overall rankings a full 11 points ahead of its nearest competitor, Capital One.Details
Bank of America and Choice Hotels are launching a promotion June 1st offering two free hotel nights for new cardholders making their first purchase by November 1st. The two nights are equal to 16,000 Choice Privileges reward points. In addition to no annual fee, cardholders earn bonus points at almost 3,000 Comfort Inn brand hotels throughout the U.S., as well as points for purchases with merchants that accept Visa credit cards. Choice Privileges Visa cardholders will automatically be enrolled in the rewards program. Choice Hotels International markets more than 5,000 hotels in over 40 countries. Bank of America is one of the world’s largest financial institutions, serving 33 million consumer relationships with more than 5,800 retail banking offices.Details
Colorado-based Communication Transaction Solutions has introduced “TableSwipe,” an encrypted payment card terminal for “paying at the table” in restaurants. TableSwipe is a handheld, wireless device the size of TV remote that transmits personal charge card information directly to the cash register for electronic card-company approval and prints a receipt without credit card information. It is a secure transmitter with no built-in memory, so credit card information is not retained in the machine. CTS is a privately-held company dedicated to creating solutions for security and operational efficiency issues in the hospitality industry.Details
HDFC Bank has joined the Cashnet shared ATM network. HDFC Bank operates the fourth largest ATM network in the country with 1,167 ATMs, serving approximately 3 million cardholders. Cashnet is operated by Euronet and is the largest nationwide multilateral shared ATM
network in the country. HDFC Bank is the tenth member bank to join the network. Euronet plans to have the HDFC Bank ATMs live on the Cashnet network by the end of May, with the establishment of an online connection between the Bank and its operations center in Mumbai.
A new survey has found that as many as 54 million Americans may have been the victims of ID-related fraud, now primarily driven by phishing attacks. The survey from First Data’s STAR network, reveals that 37% of consumers have received a phishing e-mail, while 19% said they have received a phishing phone call. Of those consumers who said they were contacted by phishers, 5% trusted the phishers enough to provide the requested personal information. Of those who said they provided information, 45% reported that the information was used to make an unauthorized transaction, open an account, or commit another type of identity theft. First Data says that in the past year, this contributed to the approximately two million new identity theft victims from phishing alone. Nearly one-third of consumers contacted said that the phisher had posed as a financial institution, while one in 10 reported that the phisher had impersonated a credit card company.Details