Equifax’s Chapman to Retire Next Year

Equifax chairman and CEO, Tom Chapman, announced his plans to retire in late 2005 after a successor is named and the leadership transition is completed. Mr. Riddle further indicated that given today’s complex business environment and the demands of a public S&P 500 company, the Search Committee is seeking an experienced leader with a proven track record of performance.

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Issuers and Processors Want Reimbursed for BJ Losses

Despite the fact that merchants eat the lion’s share of credit card fraud losses, BJ’s Wholesale Club is being asked to cough up $16 million in costs and losses related to an alleged breach of its computerized customer database. BJ’s says its credit card processor and about a dozen card issuers want approximately $6 million to cover actual losses and $10 million for certain card replacement and account monitoring costs. In March, BJ’s was notified by credit card issuers that credit and debit card accounts used legitimately at BJ’s were subsequently used in fraudulent transactions at non-BJ’s locations. In response, the Company retained a computer security firm to conduct a forensic analysis of its information technology systems which found no conclusive evidence of a breach. BJ’s said any breach would have likely occurred in a more decentralized fashion involving club-level systems. BJ’s took a pretax charge of $6.0 million in the second quarter to establish a reserve to settle the potential claims. BJ’s says it will defend itself in any potential litigation. VISA, MasterCard, Discover, and American Express lost approximately $1 billion last year in U.S. fraud losses, about 5 basis points of total volume.

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Defunct Processor Says V/MC Rules Forced it to Shutdown

RI-based Internet card processor, PSW, has filed a lawsuit in federal district court against VISA, MasterCard, and First Data seeking damages under state and federal anti-trust laws after it was forced out of business ten months ago due to holdbacks for potential charge-backs. The complaint alleges that the defendants used monopoly power to employ policies and practices that unreasonably excluded competition and restrained trade in the credit card and credit card processing markets. PSW alleges that as a result of this conduct, it was forced to pay higher prices for network services, pay excessive fees, fines and penalties, and comply with unknown, continuously changing, and commercially unreasonable rules and directives of the defendants, at significant expense. As a consequence, PSW claims that the defendants usurped PSW’s profits and good will and forced it out of business. The twelve-count complaint also alleges claims for interference with contractual relations, breach of the covenant of good faith and fair dealing, conversion, embezzlement, and breach of contract. First Data’s First Financial Bank continues to hold back over $1.6 million in PSW’s reserve account and has refused to release the funds, according to PSW.

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Fujitsu and SonicWALL Partner for POS Networks

Fujitsu Transaction Solutions is now working with SonicWALL to deliver comprehensive security with remote management options for VPN-based wide-area and in-store wireless networks. To provide secure VPN capabilities to its customers, Fujitsu will offer SonicWALL appliances and software. These include SonicWALL’s TZ and PRO series security gateways, the SOHO TZW, an integrated firewall, VPN and secure wireless access point for smaller networks. SonicWALL’s newly launched distributed wireless solution scales to accommodate larger store deployments. This package comprises a gateway security device, SonicPoint intelligent access points, power-over-Ethernet injectors and long-range wireless cards. Fujitsu will also deploy SonicWALL’s Global Management System to provide retailers with remote management options including monitoring, reporting and automatic downloading of code and policy updates from retail headquarters to branches.

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Pay By Touch Lands a Midwest Grocer for Deployment

Roundy’s, which operates 120 retail grocery stores in the Midwest under the Pick ‘n Save, Copps and Rainbow Foods banners, announced it will deploy the Pay By Touch biometric payment system. The new Pick ‘n Save Metro Market is joining the walletless world today by introducing its customers to Pay By Touch, a new payment service that lets users purchase groceries with the touch of a finger. The Pay By Touch finger scanning technology does not store actual fingerprints; instead, it creates a set of 40 data points that cannot be reverse engineered back to a fingerprint. Once enrolled — no matter what store or state they are in — customers can simply scan their finger and select a preferred payment method every time they pay.

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FTC Levies TSR Fines on Three List Management Companies

Three list management companies that allegedly sell or rent lists of consumer information to telemarketers selling advance fee credit products have agreed to settle FTC charges that they violated the agency?s “Telemarketing Sales Rule.” The companies were ordered to pay nearly $200,000 combined, in consumer redress. The FTC says CA-based Guidestar Direct, FL-based ListData Computer Services, and, NC-based NeWorld Marketing, knew that some of the telemarketers they rented lists to were engaged in illegal practices because of the scripts the telemarketers provided them, and therefore knowingly aided in the unlawful marketing of advance fee credit products. Guidestar, ListData, and NeWorld were ordered to pay $25,000, $100,000, and $62,500, respectively, in consumer redress.

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MU MASTERCARD

Barclaycard International has teamed with the Public Bank of
Malaysia to introduce the first Manchester United credit card in the Asia-Pacific region. The new “Public Bank Manchester United MasterCard” is targeted at an estimated 5 million United football fans in Malaysia. The card is linked to the “RedRewards” loyalty program and “Bonus Accumulator” team performance discount program. Cardholders also receive free “One United” membership for a year. Public Bank is launching a major TV and radio advertising campaign to support the launch, featuring Ryan Giggs. One year ago South Africa’s Standard Bank partnered with Barclays to form a new division to issue “Barclaycards.” The “Manchester United Barclaycard” was the first credit card product introduced from the alliance. There are approximately 3.8 million registered Manchester United supporters in South Africa. Earlier this year. Barclaycard took its Manchester United credit card into Ireland. Barclaycard has the global rights to issue “ManU” cards, except in Britain and Singapore.
MBNA also has a tie-up with Manchester United.

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Consumer Credit Cycle Conference to be Held

A three-day survey course on “Consumer Credit: Managing Risk and Reward” is scheduled for September 21-23, in New York City. Managing Risk and Reward is a three-day survey course which teaches the basics of the consumer credit cycle….planning products, acquiring and maintaining accounts, and sometimes collecting them. The program uses case studies, exercises, and a computer-based profit model to reinforce the subject matter and ensure active involvement.

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[1]: http://www.cardweb.com/images/s/solomon/solomonad.gif

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Payment Data Systems Gets $10MM in Financing

San Antonio-based Payment Data Systems has received financing up to $10 million in an equity line of credit from Dutchess Advisors, a private equity capital firm. Dutchess Advisors, a private equity capital firm, has committed to financing up to $10 million in an equity line of credit for Payment Data Systems, available to the Company after completion of its SB-2 Stock Registration.

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FTC Gets Two Houses in Card Scam Settlement

A man involved in a fraudulent pre-approved credit card scam based in Toronto has agreed to give the FTC two houses and various bank accounts, worth an estimated $1.8 million. Paul Schroeder, the last of seven defendants to face FTC litigation in conjunction with First Capital Consumers Group, settled yesterday. Previous settlements with other defendants produced monetary judgments of more than $8.27 million in restitution. According to the FTC’s complaint, First Capital Consumers Group, also operating as US Guardian United Consumers, Trans America United Benefits Group, Transglobal National Consumers Group, and First Guardian National Benefits, targeted U.S. consumers with poor credit histories. It advertised a pre-approved credit card, from MasterCard or VISA, with no annual fee and a credit limit as high as $2,500. A one-time processing and membership fee of between $189 and $219 dollars was deducted electronically from the customer’s bank account. Consumers who applied never received a credit card, according to the FTC.

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Providian ABS Charge-Offs Fall to 13.17%

Providian’s metrics for its securitized card loans continue to improve as charge-offs marched south for the fourth consecutive month, dropping to 13.17% in July. However, delinquency edged up 2 basis points during July after dropping dramatically in the first quarter. For July, Providian’s securitized delinquency ratio was 8.42%, compared to 8.40% in June. One-year ago Providian’s securitized delinquency ratio stood at 11.96%. Charge-offs edged down to 13.17% in July, compared to 14.44% in June. One-year ago Providian’s securitized charge-off ratio stood at 17.39%. Providian’s managed charge-offs for July were 10.88% and its managed delinquency ratio was 6.35%. For complete details on Providian’s latest performance visit CardData ([www.carddata.com][1]).

[Click here for the 8K filing from the SEC in PDF format.][2]

PROVIDIAN MONTHLY ABS METRICS
Month Charge-Offs Delinquency
Jan 04 17.36% 11.48%
Feb 04 16.08% 11.07%
Mar 04 17.17% 9.56%
Apr 04 15.84% 9.09%
May 04 14.82% 8.68%
Jun 04 14.44% 8.40%
Jul 04 13.17% 8.42%
Source: CardData (www.carddata.com)

[1]: http://www.carddata.com
[2]: http://www.cardweb.com/cardflash/2004/august/providian.pdf

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Pipeline Data Hits Profitability

MA-based Pipeline Data posted its first-ever net profit during the second quarter. Second quarter revenues were $4.0 million a 42% increase over the prior quarter, and a 63% increase over the second quarter of 2003. Net profit for the quarter was $165,078. During the second quarter Pipeline announced plans to expand its Northern Merchant Services call center in St. Lawrence County, NY. The Company also hired Debbie Hoch, formerly with Mellon Bank and Concord EFS, as VP of East Coast Sales for Pipeline’s wholesale merchant processing division. Pipeline says it plans to reinvest its profits towards the growth of Pipeline Data Processing, its wholesale division. Therefore,investors should expect a close to break even cash flow status with considerable top line revenue increases going forward. Pipeline Data currently serves over 10,000 merchant customers. For complete details on Pipeline’s latest performance visit CardData ([www.carddata.com][1]).

[1]: http://www.carddata.com

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