FTC Shuts Down a Nonprofit Debt Negotiation Network

The FTC has filed a lawsuit and obtained a asset freeze against a group of defendants allegedly masquerading as a nonprofit debt negotiation organization including National Consumer Council, London Financial Group; National Consumer Debt Council, Solidium Credit Recovery Services; J.P. Landis; Financial Rescue Services; Signature Equities; M&L Springfield Trust; PC Hailey Trust; and, Via Lido Trust. The FTC alleges that the defendants, operating a complex web of companies advertised as National Consumer Council, leave pre-recorded messages on consumers’ home answering machines claiming NCC is a nonprofit organization that will stop creditors’ collection efforts and significantly reduce consumers’ debt. According to the FTC, the defendants also violated the TSR by calling consumers who have registered their telephone numbers on the National Do Not Call Registry and by continuing to call consumers who previously have stated that they do not wish to receive calls from the defendants.

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Rewards Network Promotes Adel

Chicago-based Rewards Network has promoted Bryan Adel from general counsel to SVP. Adel joined the company in 2003 as general counsel. Adel brings to Rewards Network the benefit of more than 15 years’ experience in corporate law and SEC compliance. Rewards Network, headquartered in Chicago, provides loyalty and rewards programs for restaurants and hotels via its registered credit card platform.

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Viisage Lands DoD CAC Related Contract

Viisage announced Friday that it has received a $10 million order to support the production of secure, smart credentials as part of the U.S. DoD’s “Common Access Card” smart card program. As previously reported, Viisage will provide a solution to the DoD’s DMDC through Telos, the DMDC’s support contractor. The solution, which is expected to include 1,700 Toppan CP400 printers as the fixed-site desktop printers, as well as consumables and services, will be used for the production of secure identification cards throughout the RAPIDS. Viisage delivers advanced technology identity solutions for governments, law enforcement agencies and businesses concerned with enhancing security, reducing identity theft, providing access control, and protecting personal privacy.

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Givex Eyes British Gift Card Market

Canada-based gift card and loyalty transaction processor, Givex Corporation, has launched its card program in the United Kingdom. Givex clients can safely merchandise their gift cards since they have no value until purchased and activated at the point of purchase. Customers also prefer gift cards because they fit in their wallet just like a credit card and are easy to use. Givex Corporation () processes gift card and loyalty transactions and provides payment processing gateway services for a wide range of industries including hospitality, retail, grocery and petroleum.

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First Midwest Financial Eyes Prepaid Card Market

IA-based First Midwest Financial has formed First Federal Savings Bank of the Midwest as a subsidiary to enter the prepaid debit card and related payment systems and services market and has hired Brad Hanson to head the division. The new division will position the company to take advantage of opportunities in the growing area of prepaid debit cards and related payment systems and services. First Midwest Financial, Inc. is the holding company for First Federal Savings Bank of the Midwest, headquartered in Storm Lake, Iowa, and for Security State Bank, headquartered in Stuart, Iowa.

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Debit Eats Check and Cash Share at the POS

Debit cards are quickly and surely displacing checks and cash at the POS. A new survey, comparing 2001 and 2003, found that check use in the under $100 purchase category has declined by more than 50% and that cash use has dropped by approximately 15%. The “MasterCard International Attitude and Usage Study,” released yesterday, shows that users of ATM/debit cards report making debit payments for nearly a third of all their purchases under $20, a 61% gain over 2001. In the $20 to $50 category, debit payments account for more than half of all purchases, a 31% increase since 2001. In the same category the preference for checks and cash declined by 50% and 18%, respectively, during the same period. In the $50 to $100 category, debit payments capture 52% of all purchases, compared with 47% in 2001, as check use declined from 25% to 12%, and the use of cash remained unchanged. Credit cards continue to rule the over $100 category, capturing 46% of all purchases while debit remains unchanged at 36%. The MasterCard study was conducted in December in 26 geographically dispersed markets in the U.S. and included 750 respondents.

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Teens Embrace Gift Cards Big Time

A new study has revealed that 66% of American teenagers have purchased one or more gift cards during the last 12 months and that 90% of teens have received a gift card. The study of 1,600 college-bound teens, conducted by the Center for Teen Insight for Stored Value Systems, also found that 75% of teenagers report spending more than the face value of the gift card; this compares to 79% of adults who say they usually spend something more than the card’s value. Approximately 75% of surveyed college-bound teens indicate they plan to use gift cards for purchasing necessities once they reach campus. More than 60% of teen respondents indicated the appearance and having a choice of gift card designs is important in their purchase decision. Apparel and music retailers were the preferred retail categories where teens purchase gift cards (nearly 70% of purchases). The most popular average gift card values are between $10 and $24, and $25 to $49, the study found.

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Phishing Attacks Cost Issuers $1 Billion Annually

New research has concluded that U.S. banks and credit card issuers are shelled out $1.2 billion last year to combat phishing attacks by hackers against online consumers. The Gartner study estimates that 57 million Americans likely have received these fraudulent e-mails. Based on survey responses from 5,000 adult Internet users, Gartner analysts project that approximately 30 million adult Internet users believe they have definitely experienced a phishing attack, and another 27 million believe they have observed what looked like a phishing attack. Phishing attacks are not new, but they have become more pervasive in the past 12 months. According to the Gartner survey, 76% of the known or suspected attacks occurred within the past six months, and another 16% occurred during the six months before then. Thus the combined results suggest that 92% of these phishing attacks took place in the past year. The Gartner survey, completed in April, indicated a high rate of success for phishers. Based on survey data, Gartner estimates that about 19% of those attacked, or nearly 11 million U.S. adult Internet users, have clicked on the link in a phishing attack e-mail. Moreover, 3% of those attacked, or an estimated 1.78 million adults, report giving phishers their financial or personal information.

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Moneris to Offer ECHO’s VISA POS Check Service

Electronic Clearing House has signed a contract with Moneris Solutions to provide the VISA “POS Check Service” to Moneris customers. ECHO is one of only two third-party processors and one of five acquiring processors authorized for Visa’s POS Check Service. Under the agreement, Moneris will have an exclusive right to sell the Visa POS check product to its U.S.-based merchants, which constitute a portion of its total North American merchant base. Moneris Solutions ([www.monerisusa.com][1]) has a 30-year history as one of North America’s largest electronic transaction processors, delivering advanced payment card processing capabilities through point-of-sale hardware, payment processing software, e-commerce solutions and a gift and loyalty program. ECHO ([www.echo-inc.com][2]) provides a complete solution to the payment processing needs of merchants, banks and collection agencies.

[1]: http://www.monerisusa.com
[2]: http://www.echo-inc.com

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