FTC Nails a Debt Buyer Over FDCPA Violations

Debt buyer, Capital Acquisitions and Management Corp. and its subsidiary, RM Financial Services, has been ordered to pay a $300,000 civil penalty over violations of the “Fair Debt Collection Practices Act.” The FTC says most of the debts purchased by CAMCO were unenforceable in court and so old that they are beyond the reporting periods allowed under the “Fair Credit Reporting Act”. Some of the debts CAMCO allegedly attempted to collect were already discharged in bankruptcy or had been paid. The FTC charged that in their attempt to collect these debts, the companies engaged in abusive and deceptive collection practices. The FTC says the firms used obscene or profane language, misrepresented themselves as attorneys, and threatened imprisonment, seizure, garnishment, attachment or sale of property or wages, among other practices.

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McDonald’s Finally Takes Cards Seriously

McDonald’s announced it will more than double the number of its restaurants that accept payment cards by year-end. More than $25 billion of QSR spending is expected to be captured this year on payment cards as acceptance rapidly accelerates within the fast food industry. McDonald’s says it is planning to have more than 6,000 U.S. restaurants equipped to take VISA, MasterCard, Discover, and American Express cards by 2005. Besides credit cards, McDonald’s is taking PIN and signature debit cards. VISA recently reported that consumers used “VISA Check Cards” to spend $4.6 billion in quick service restaurants last year. During 2003, Americans charged an estimated $13 billion worth of fast food to their credit and debit cards, compared to $6.1 billion in 2002, and $3.7 billion in 2001. The figure is projected to double again this year as card acceptance among U.S. QSRs is expected to rise from 10% to 25%. Wendy’s currently has about 70% of its domestic restaurants accepting payment cards. Americans spend about $140 billion per year in QSRs. VISA, which has led the charge into fast food, found that the average payment card purchase runs about 30% higher than cash purchases in quick service restaurants. McDonald’s has 31,000 restaurants worldwide.

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RDM Released ITMS v1.4 a Web-Based Payments Processing System

Ontario-based RDM Corporation has released its newest version of ITMS, RDM’s “Image and Transaction Management System.” “ITMS” is a Web-based payments processing system that facilitates the electronic deposit and settlement of payments received by paper cheque. It provides billers and financial institutions with a complete payment platform that allows them to take advantage of the efficiencies and cost
savings of ECC for both point-of-purchase and accounts receivable conversion payments. “Version 1.4 of ITMS” gives customers enhanced capability for processing check. Features of the new version include; enhancements to the administrative center allowing easier access to add and edit users of the system, as well as enhanced settlement options for file transfers.

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Welcome XLS Now Supports VS3 Cards

Welcome announced that its smart transaction software now supports cards equipped with “Visa Smart Secure Storage” to access loyalty points, coupons, special promotions and other data stored in a chip card’s memory.
“XLS” already supports the existing proprietary data management methods built into cards including the lowest cost EMV cards as well as dynamic “GlobalPlatform” compliant multi-application smart cards. The new “VS3”-based cards will be able to coexist with “XLS”-based cards, providing a seamless migration during the transition. “VISA Smart Secure Storage” is designed to allow multiple programs to access and share data without requiring a distinct applet for each individual applicsation. Use of a single applet simplifies applet management for card issuers. For example, when Visa Smart Secure Storage is pre-loaded on cards, there is no need to invest in systems that manage the dynamic addition and deletion of multiple applets on cards.

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Capital One Reportedly Terminates Telephone Outsourcing Contract

London-based Amicus reports that Capital One has terminated its contract with Wipro Spectramind, India’s largest call center operator, after the staff offered US customers unauthorized credit limits. The Company says the move is the latest in a line of companies deserting India including Littlewoods, Dell and Lehman Bros. There are increasing fears around the safety of data being processed in India after the Evening Standard reported that criminal gangs are bribing Indian staff with a years wage to steal credit data from UK customers. Amicus says several unions have come recently together to launch an independent
commission of inquiry into offshoring.

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BB&T Extends its TSYS Processing Contract

TSYS and BB&T have extended their card processing relationship, which began in 1997, for another three years. Under the terms of the agreement, both companies, which are wholly-owned subsidiaries of Winston-Salem, N.C.-based BB&T Corporation, will utilize the TSYS credit, debit and commercial platforms, including TSYS’ subsidiary ProCard, which will provide technology support and services for BB&T’s commercial card accounts. BB&T Corporation and its subsidiaries offer full-service commercial and retail banking and additional financial services such as insurance, investments, retail brokerage, corporate finance, international banking, leasing and trust. TSYS (NYSE: TSS) (www.tsys.com) brings integrity and innovation to the world of electronic payment services as the integral link between buyers and sellers in this rapidly evolving universe.

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BannerDirect Hires a New Regional Director

NYC-based BannerDirect has hired James Saftich, formerly with Deutsche Post Global Mail, as a Regional Director. James has over twelve years of diverse marketing experience which makes him an essential facet in BannerDirect s continued growth and progress, says Ms. Kelly. Mr. Saftich will be responsible for generating new client relationships and managing existing client interaction within a range of business categories. BannerDirect is a full-service direct marketing agency recognized for the development and execution of direct response marketing programs for clients in the financial, entertainment, telecommunications, associations, retail, medical and publishing industries.

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DEFAULTS RISE

The number of consumers who are 90+ days overdue on bank debt grew to 3.8 million in February, the 16th consecutive monthly increase, and a 1.5% gain over January. About 2.5 million of the defaulters were credit card related, a 2.5% increase over the previous month. According to the Korea Federation of Banks the biggest increase in defaulters were women in their 30s followed by women in their 40s. According to the Financial Supervisory Service, credit card issuers lost 10.47 trillion won last year, a 31% increase over 2002. LG Card accounted for 53% of the total loss with a 2003 deficit of 5.59 trillion won compared to a 350.3 billion won profit in the prior year. The Korea Exchange Bank Credit Card Service posted the second highest losses of 1.43 trillion won, nearly triple its 2002 losses. The Finance Minister is in the process of setting up a special bank to absorb the bad loans.

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Convenience Usage Drops for the Third Year

The number of Americans paying-off credit card balances in-full each month has edged down for the third consecutive year. After peaking at 44.4% in 2000, the number of convenience users has slipped to 38.3%, about the same level as 1995. Throughout the 1990s, the number of convenience users steadily increased, rising from 28.6% in 1990, to 43.4% in 1999, according to CardTrak (www.cardtrak.com).

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InfiCorp Launches the ANA Co-Branded Card

Atlanta-based InfiCorp Holdings has teamed with a Japanese airline to launch a co-branded frequent flyer VISA card. The new “ANA CARD U.S.A. VISA” is a U.S.-based, dollar-denominated card program as opposed to a Japanese-based, yen-denominated card thus avoiding currency exchange disadvantages. Cardholders earn one mile for every dollar they spend using the card and will be awarded 5,000 bonus miles for the first purchase they make using the card, plus an additional 5,000 bonus miles if the first purchase is made before Sept. 30th. The card offers a 1.9% introductory interest rate for the first five billing cycles, and then goes to a 13.99% variable rate. The card also carries a $70 annual fee. Members also receive discounts for in-flight purchases, and discounts at ANA hotels and duty-free shops. As part of the “ANA CARD U.S.A” program, InfiCorp also provides both English and Japanese versions of a Web site, as well as Japanese-language customer service through Tokyo-based Prestige International’s multi-lingual call centers. ANA, a.k.a All Nippon Airways, is Japan’s top carrier and the world’s eighth largest airline. InfiCorp will issue and administer the card through its InfiBank affiliate.

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Coinstar Links Up to a Forthcoming Movie

Coinstar is set to launch a major sweepstakes next month in conjunction with the upcoming release of the “New York Minute” movie starring the Olsen twins. The two companies are teaming up to launch a sweepstakes this Spring for fans of Mary-Kate and Ashley to win a trip to New York City and experience the “Big Apple” in style. New York Minute, a new action comedy, follows 17-year-old sisters Jane and Roxanne Ryan on a wild romp through the streets, subways and sewers of Manhattan during one unforgettable day. Coinstar uses technology to deliver time and money saving services to consumers in their local supermarkets.

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Euronet Signs a New Credit Facility

Euronet has signed a $10 million credit agreement with Bank of America and repurchased $5 million in senior discount bonds. The proceeds from the facility can be used for working capital needs, acquisitions and other corporate purposes. As a result of the cash collateral release, on March 24, 2004, Euronet acquired at par $5.0 million of its $43.5 million in outstanding 12 3/8 % senior discount bonds. Euronet Worldwide is an industry leader in processing secure electronic financial transactions.

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