National City Lands Co-Branded Golf Rewards VISA

The nation’s fastest-growing golf instruction and equipment company has teamed up with Ohio-based National City Bank to launch a rewards credit card. The new “Natural Golf VISA Platinum” offers cardholders 2% back on all purchases using the card, which then can be redeemed for Natural Golf products. Cardholders also receive a $50-value application gift. Under the program, cardholders earn a $25 Natural Golf certificate, which is included with their monthly VISA statement, for every $1,250 in VISA purchases. Natural Golf Corporation has more than 125 Certified Instructors teaching the Natural Golf System at schools that vary from half-day in length to four days at nearly 200 locations worldwide.

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EDS Lands Marmol to Lead BPO Unit

EDS has hired Gil Marmol, former CEO of Luminant Worldwide and a former senior partner at McKinsey and Company, to head up its newly created Business Process Outsourcing portfolio organization, which includes credit card process management. Marmol is EDS’ third key executive appointment this month, as the company accelerates the build-out of its leadership team. EDS pioneered the BPO industry more than 30 years ago when it introduced administrative process management capabilities to the nation’s largest Medicaid and Medicare programs and continues to support that business through its government services unit.

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Issuers Look for More Cash to Shore Ailing Card Business

Liquidity problems among the country’s credit card issuers have not improved as the overall economy picks up. This week LG Card confirmed it is looking for 1 trillion won by the first half of next year. Woori Bank and Kookmin Bank agreed to pump $1.7 billion of fresh loans and roll over maturing debt into LG Card. LG Card posted 1 trillion won in losses through the third quarter. Korea Exchange Bank says it is seeking to merge with KEB Credit Service to resolve liquidity problems with the credit card unit. KEB has lost 400 billion won so far this year. Other credit card issuers have posted significant losses as consumer credit defaults soar. Through the third quarter, Samsung Card has lost 1.03 trillion won; Woori Card 800 billion won; Hyundai 600 billion won, Shinhan 100 billion won; and Lotte cards 80 billion won. Fitch Ratings warned that the ailing credit card sector could damage the ratings of South Korean banks and corporations, even though 3.9 trillion won has been pumped into the credit card industry this year.

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Equifax Hires Big Gun for Communications Chief

Equifax has hired David Rubinger, former SVP for Ketchum and former editor of the Atlanta Business Chronicle, as VP of communications. Mr. Rubinger has had a distinguished career as both a business journalist and public relations executive. Since 1998, Mr. Rubinger served as senior vice president for the public relations firm Ketchum. He previously was editor of the Atlanta Business Chronicle. Equifax Inc. is a global leader in turning information into intelligence.

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TSYS Promotes Jardina in Sales

TSYS has promoted Matt Jardina, a 13-year TSYS veteran, to group executive of Sales. Jardina joined TSYS in 1990 in the Client Relations division serving as an account representative for various TSYS clients. He later joined TSYS Sales in 1993 as a regional sales manager and has since held numerous leadership positions in the sales division, including director and senior director. TSYS brings integrity and innovation to the world of electronic payment services as the integral link between buyers and sellers in is rapidly evolving universe.

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Axalto Goes Wi-Fi and Powers JCB’s New Smart Cards

Axalto, formerly Schlumberger Smart Cards and Terminals, is expanding its “MagIC X1000” with a Wi-Fi-enabled wireless POS terminal. The Company also announced this week at “Cartes 2003” that it has landed a contract to provide a “Dynamic Data Authentication” native operating system for JCB smart cards. The new Wi-Fi terminal will accept both off-line and on-line remote payments transactions up to 300 meters, from the docking station. Axalto says the new terminal is also faster than ones employing CDMA, GPRS, or GSM. The new terminals will be available in 2004. With its partnership with JCB, Axalto’s DDA native OS product will give JCB the next generation security in smart cards, especially for off-line transactions. Axalto says the DDA product also paves the way towards EMV migration.

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FTC Shuts Down Tampa Credit Card Marketer

A federal district court has shut-down Tampa-based Peoples Credit First, a/k/a Consumer Preferred and Consumer First, for offering VISA and MasterCards in exchange for a $45 advance fee payment. The Federal Trade Commission filed charges against the defendants citing that they violated the FTC Act by representing expressly or by implication that consumers were likely to receive unsecured, a major credit card, like a Visa or MasterCard, in exchange for an advance fee payment. The FTC obtained a temporary restraining order with an asset freeze and other equitable relief. The court appointed Mark Bernet as the receiver.

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Credit Card Issuers Blamed for the Crisis in the CCA Industry

The FTC yesterday testified before the House Subcommittee on Oversight of the Committee on Ways and Means that the credit counseling industry has changed from small, community-based non-profit organizations to large, high-tech organizations that generate lucrative fees and provide little, if any, personalized credit counseling. In response, the credit counseling industry says the changes are the result of rigid creditor policies, new state regulations, and the control exerted over them by credit card companies. This week, the FTC filed a lawsuit against AmeriDebt/DebtWorks over its business practices. The FTC says the modern day credit counseling firm pushes all their clients into a “debt management plan” without consideration of their particular financial situation. In testimony yesterday, the FTC explained that “DMPs” generate revenue for CCAs in two ways: voluntary rebates from creditors to CCAs; and “contributions” or “donations” solicited by some CCAs from “DMP” enrollees, usually an up-front or monthly fee. The FTC accuses the credit counseling industry of abusing its non-profit status by convincing consumers to enroll in their “DMPs” and pay fees or make donations, claiming that the “donations” will be used to defray the CCA’s expenses, when instead the money may enable the CCA to make a substantial profit. MD-based Myvesta says credit card companies dictate the way all credit counseling organizations function. The CCA says card issuers have silently forced the counseling agencies to perform like paid collection agents. Some even offer collection bounties for certain types of payments. Counseling agencies, in an effort to maintain funding and provide assistance, have been left with no choice other than to comply with the wishes of credit card companies collection departments. Myvesta says credit card companies have gained this control because the current system does not require any funding or cooperation from other major creditors. In response to the FTC lawsuit filed this week, AmeriDebt/DebtWorks says consumers need help from independent organizations that are not an extension of the very credit card companies that have encouraged consumers to bury themselves under mountains of debt.

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Home Equity Lines & Loans Up 26% and 44%, Respectively

The average size of new home equity line commitments is running about $70,000, a 26% increase over last year’s average size according to statistics released at the “BAI Retail Delivery Conference”. The average size of new home equity loan commitments is approximately $58,000, a 44% increase over last year. The data are from the Consumer Bankers Association’s “2003 Home Equity Lending Study” showing statistics through mid-year 2003. The CBA says banks cut back significantly on lending to sub-prime line of credit borrowers. While 96% of study participants reported they had loans to customers with credit scores lower than 630, they reported those loans were 7% of line accounts, compared to 13% a year earlier. They were 16% of loan accounts, compared to 18% in 2002. Average credit scores have remained stable, at 729 for lines and 718 for loans, compared to 730 and 724 a year earlier. The CBA also noted that payments more than 30 days late have dropped for three years on lines, but risen on loans. The 2003 rate for lines is 0.61%, compared to 0.94% a year earlier and 1.02% in 2001. They rose to 1.55% on loans, from 1.00%.

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PRE Solutions Launches Miller Mart Gift Card

Atlanta-based PRE Solutions has rolled-out its first gift card launch in association with Valutec. The gift cards, branded with the Miller Mart logo, increase customer retention, create return traffic and give Miller Mart a competitive edge over other retail locations. The cards will be offered in $10, $25, $50 and $100 denominations as well as a reload option of the later denomination or an amount the customer chooses.

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Circuit City and FleetBoston Close Portfolio Sale

Circuit City Stores completed the sale of its $1.5 billion bank credit card portfolio to FleetBoston for $1.3 billion on November 18th, that will produce an after-tax loss of $89 million and net after-tax cash proceeds of $282 million. The company expects that it will incur closing adjustments following the completion date of the sale. The bankcard business will be classified as a discontinued operation beginning with the third fiscal quarter ending November 30, 2003. The sale agreement includes a transition services arrangement under which employees of Circuit City’s finance operation will continue to service the bankcard accounts until final conversion, which is expected to occur in the company’s first fiscal quarter ending May 31, 2004. Circuit City Stores, Inc. puts the customer first with high-quality service and more than 5,000 consumer electronics products available in its stores and online at .

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BabyMint Adds Miles/Points Transfer Program

Atlanta-based Vesdia says it is adding a new option to its “BabyMint” college savings accelerator program that will enable members to convert the value of their miles or points in multiple airline, hotel, and retailer rewards programs into the their “529” college savings plan or “Coverdell” educational savings account. The “BabyMint” program currently limits members to earning rebates via a network of more than 500 merchants. Vesdia also has a co-branded “BabyMint” credit card with MBNA that provides additional rebates. The new option for miles/points is the result of a deal with Toronto-based Points International. Through the new partnership “BabyMint” participants will have the ability to redeem miles and points from America West Airlines, Midwest Airlines, Alaska Airlines, Cathay Pacific and InterContinental Hotels into their “BabyMint” rebate point account. Vesdia also expects to provide the points conversion enhancement to participants in its “NestEggz” retirement savings program.

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