Discover Taxes

As American Express offers bonus air miles to cardholders charging taxes on its ‘Delta’ co-branded cards, Discover is enticing consumers with a special, low, processing fee. Specialists in tax payments via credit card are typically charging a 2.5% convenience fee to process the payments. However, under a special deal with Quicken, Discover cardholders pay a 1.85% + $1.00 processing fee. For the third consecutive year, Discover Card is the exclusive credit card for paying taxes electronically via ‘Quicken TurboTax’ and ‘Quicken TurboTax for the Web’. Discover cardholders can also purchase ‘TurboTax Deluxe’ at a discounted price via Discover Card’s Web site. ‘TurboTax for the Web’ allows Discover cardholders to prepare and file federal 1040 income tax returns online for $14.95 before April 1 and $19.95 after April 1. State returns are only $9.95. Taxpayers with an adjusted gross income of $25,000 or less qualify to use the service free of charge. Cardholders can pay taxes electronically with their Discover Card immediately after filing online and earn a ‘Cashback Bonus’ award on federal taxes paid.

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ORGA & Leapfrog

Leapfrog Smart Products, Inc., an emerging leader in Smart card software development, and ORGA Card Systems, a global pioneer of integrated Smart card systems, announced they have agreed to develop and jointly promote Smart card and biometric solutions for the global healthcare community.

![][1] Under the terms of the agreement, both companies will play key roles in the joint marketing, development, integration and implementation of Smart card and biometric healthcare solutions. In order to better leverage each other’s areas of expertise, Leapfrog and ORGA will provide each other with preferred pricing and share/exchange select technologies. Leapfrog’s role will be primarily as an application developer and manager of installed solutions, while ORGA will mostly handle manufacturing duties, such as supplying Smart cards, readers and personalization equipment and providing management support.

Dr. Les Bromwell, Chief Executive Officer of Leapfrog, stated, “This agreement with such a high profile, elite company is a major achievement for Leapfrog, and a recognition of our outstanding capabilities in software development for healthcare applications. ORGA is a multi-national company that offers multiple complementary solutions to build upon our products targeted to the highly coveted Smart card and biometric markets. We believe this partnership further demonstrates our commitment to developing leading Smart card software applications and products and confirms that our management team is carrying forward a strong dedication to increase shareholder value by expanding product lines and increasing customer service.”

ORGA, founded near Frankfurt, Germany, in 1972, is a pioneer in the Smart card industry. The Company’s many breakthroughs include manufacturing the first multi-function chip-based card, the first chip-based telephone card in the UK and the first chip-based bank card in Germany. As the leading provider of Smart card solutions within the healthcare industry, ORGA has successfully implemented the national rollout of 80 million healthcare cards in Germany and is a technology provider for the French national healthcare card project, SESAM-Vitale. ORGA is a true global leader in the Smart card market, with solutions for telecommunications, banking, health, retail, Internet, identification systems, e-commerce and m-commerce applications. The Company maintains offices in 13 countries, and agents in more than 50 countries.

About Leapfrog Smart Products, Inc.

Leapfrog Smart Products, Inc. is a world-class leader in Smart card software development, biometrics and system solutions integration. Located in Maitland, Florida, Leapfrog is dedicated to creating innovative software applications for Smart cards and biometrics. Smart cards are credit card- sized pieces of plastic with a computer microprocessor embedded within. Current applications of Smart card software include personal identification, e-purse transactions, loyalty point storage, physical and logical access, as well as portable storage of medical records. Leapfrog, through its General Services Administration (GSA) master contract, is also certified as a contractor with the United States Federal government. Leapfrog Smart Products, Inc. is publicly traded on the Over-the-Counter Bulletin Board under the symbol “FROG.”

[1]: /graphic/orga/orga.gif

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Petrini Promoted

Providian Financial Corporation yesterday announced that effective April 2, 2001, David J. Petrini has been promoted to vice chairman from his previous position as chief financial officer. Joining Ellen Richey as vice chairman, Petrini will be responsible for overseeing finance, technology and administration.

Petrini, who joined Providian in 1986, was instrumental in spearheading the Company’s financial management initiatives significantly contributing to Providian’s strong track record of growth and profitability.

Jim Rowe, previously president, global e-commerce, has been promoted to chief financial officer, reporting to Petrini. Rowe, who was most recently responsible for building Providian’s online financial businesses, also played a key role in the spin-off of Providian Financial in 1997.

The Company also announced today that Lauri Kober, CEO of GetSmart.com, a Providian subsidiary that is one of the country’s leading online financial marketplaces, will be responsible for the Providian’s e-commerce initiatives reporting to chairman and CEO, Shailesh Mehta.

San Francisco-based Providian Financial ([www.providian.com][1]) is a leading provider of lending and deposit products to customers throughout the U.S. and the UK and offers credit cards in Argentina. Providian Financial has been named one of America’s Most Admired Companies by Fortune magazine, one of the nation’s top financial institutions by U.S. Banker magazine, and one of the most technologically innovative companies by InformationWeek magazine. The Company has more than $31 billion in assets under management and over 16 million customers.

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

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Sub-Prime Acquisitions

Equitex, Inc. has executed an extension agreement for its previously announced acquisitions of Key Financial Systems, Inc. and Nova Financial Systems, Inc., both of Clearwater, Florida. Pursuant to the extension, all parties have agreed to extend the transaction closing date to a date that is ninety days after the filing of a definitive proxy statement for a special meeting of Equitex’s stockholders provided the meeting is held on or before March 14, 2002.

Equitex filed on January 19, 2001 an amendment to the preliminary proxy statement for a special meeting of stockholders originally filed with the Securities and Exchange Commission on October 12, 2000. At the proposed meeting, to be held on a date to be determined, the Company’s stockholders will be asked to consider and vote upon several proposals related to Equitex’s previously announced merger with Key/Nova Financial Systems, Inc.

Key Financial Systems, Inc. and Nova Financial Systems, Inc. design, market and service credit card products aimed at the sub-prime credit market offering an innovative credit card product to customers with litter or poor credit called the Pay As You Go credit card. The companies market through direct mail, telemarketing for financial institutions and the Internet through alliances with a number of popular Internet web sites.

Equitex, Inc. is a holding company currently operating through its wholly owned subsidiaries The Meridian Residential Group, Inc. of Brooklyn, New York and First TeleServices Corp. of Atlanta, Georgia, and its majority-owned subsidiaries nMortgage, Inc. and Triumph Sports, Inc. of Palm Beach Gardens, Florida. Meridian and nMortgage offer mortgage loan products through the Internet and provide consulting services to the mortgage industry. First TeleServices Corp. is a development stage financial services marketing company developing various financial products targeted to the sub-prime consumer.

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Score Power

Equifax and Fair, Isaac this morning launched ‘Score Power’, which delivers Fair, Isaac’s ‘FICO®’ credit risk score directly to consumers via the Internet. The new service also includes an Equifax ‘Credit Profile’ and a personalized analysis of the score along with suggestions for improving and maintaining it. The introductory price for ‘Score Power’ is $12.95. Once consumers order ‘Score Power’ online and provide identifying information to ensure privacy, the information is delivered online within seconds and will remain available to the consumer online for 30 days from the order date. More than 75% of mortgage loan originations utilize the ‘FICO®’ score. More than 70 of the nation’s 100 largest financial institutions rely on the FICO® score to determine an individual’s credit worthiness, including applicants for credit cards.

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Bankruptcy Package

To speed a final package to President Bush, the supporters of the ‘Bankruptcy Reform Act’ now want the House to either approve the Senate version, or make changes in it and send it back to avoid having to negotiate the differences between the two versions. Issues discussed in this negotiation are likely to be the Lloyd’s of London provision, knocked out shortly before the Senate approved the bill, which would have prevented foreign courts from collecting judgments against any American investors if the investors could demonstrate that they were victims of misrepresentations or omissions from 1975 through 1993; and the homestead exemption, which would limit the amount of home equity that debtors can keep out of the reach of creditors in bankruptcy court to $125,000. President Bush has signaled that he would sign the bankruptcy bill into law, but he is opposed to national caps on homestead exemptions. The U.S. Senate overwhelmingly approved the bankruptcy reform bill last Thursday by a vote of 83-15. The U.S. House passed its version of the legislation on March 1. The House approved H.R.333 by a 306 – 108 vote.

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eCard Stock Deal

Inc.ubator Capital Inc. announced that eCard Solutions Inc., an Inc.ubator portfolio company, completed an investment in Junum.com, a financial services technology company.

eCard received $5.1 million in convertible preferred stock in consideration for the contribution of a portfolio of $352 million of non-performing consumer loans previously purchased at a discount, described below.

In February of 2000, Inc.ubator acquired Series A Convertible Preferred Stock in eCard Solutions (f/k/a Brunswick Capital Partners) from Thesseus International Asset Fund in exchange for 2 million restricted common shares. The preferred stock held by Inc.ubator in eCard entitles Inc.ubator to convert its holdings at its option into 40 percent of eCard common shares.

The Junum preferred stock now held by eCard is convertible into no less than 5.1 million Junum common shares. As described above, Inc.ubator has a $6.1 million preferred interest in the assets of eCard, or 40 percent of the company if converted. eCard’s primary material asset is now the Junum convertible preferred stock described herein, which, if converted to common stock, would represent a significant gain based on the current trading price of Junum common shares. There are certain performance representations made in connection with the portfolio and a 24 month restriction. If certain customer acquisition targets are not met, Junum has the right to redeem substantially all of the preferred stock after 24 months, which would materially affect the economic benefit to eCard and its shareholder, Inc.ubator.

“We are pleased to have a relationship with dynamic innovators such as Junum and are excited to see them offering new credit facilities to customers in the portfolio, including a new unsecured credit card,” said Harry Weitzel, chairman of Inc.ubator. “We are equally pleased that the Junum.com range of membership services fulfills virtually all product and technology development objectives that Inc.ubator sought to accomplish with its CASA investment, as described in our past SEC filings.”

CASA is a distinct investment from eCard made by Inc.ubator. The CASA business plan generally intends to deliver niche financial services via the Internet to middle American consumers.

Inc.ubator is also seeking ways to maximize the value of this investment for its shareholders, which may include certain spin-off or other disposition of the eCard minority share holding in the near future in connection with its anticipated reorganization.

About JUNUM Inc.

JUNUM is a financial technology company engaged in Credit Management, Debt Exchange and Financial Services. Credit Management works to improve a member’s credit rating and protect their credit identity through the removal of inaccurate, outdated and unverifiable information from their credit reports. This membership service is for individuals, small business and corporations with reoccurring monthly charges. Debt Exchange offers consumers and small businesses who may have become delinquent on a debt the opportunity to regain their credit standing. Financial Services uses the company’s patent-pending Analysis Engine to match its members’ credit status with loans, leases and other credit offers from the company’s lending partners. The company has filed nine applications for patents surrounding its three main business components. More information is available through the company and its Website: [http://www.junum.com][1].

About eCard

Ecard is a niche consumer financial services organization specializing in credit card programs, including the Balance Transfer Program used for restoring financial performance for debt portfolios. The debt portfolio which is the subject of this announcement contains 189,000 individual accounts of non-performing debt originated from GE Capital Services Inc., a member of General Electric Co. (NYSE : GE); CitiFinancial, a unit of Citigroup Inc. (NYSE : C); Bank of America (NYSE : BAC); American General Finance Group, a division of American General Corp. (NYSE : AGC); Discover Financial Services, a business unit of Morgan Stanley Dean Witter (NYSE : MWD); FirstUSA, a subsidiary of Bank One Corporation (NYSE : ONE); Household Finance Corp., a unit of Household International Inc. (NYSE : HI), and the Credit Card Services division of Chase Manhattan Corp., which recently merged with J.P. Morgan Co. to form J.P. Morgan Chase & Co. (NYSE : JPM). Due to the difficulty and inability of these companies to collect such non-performing credit card debt, portfolios are generally sold for a small percentage of their face value.

About Inc.ubator

Inc.ubator is an Internet oriented company that invests in businesses (“Network Companies”), that use (or will use) the Internet to provide Internet-related support and access services to the novice computer user or “Newbies”, and to the small business/home office market. This segment of the population has been shown by government studies to be underutilizing the benefits of the Internet (“The Digital Divide”). The existing Network Companies, and ThemeWare intend to offer consumers and small businesses various bundled packages of services and technology which include access devices, support services, affinity discounts on non-discretionary purchases, as well as offering important financial services through Visa/MasterCard and other financing programs Inc.ubator is developing.

For a Complete Investment Profile, please contact 1-800/773-7317.

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

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ACH Debits

Operating rules for the ACH Network become effective today that permit companies to originate ACH debits that have been authorized by consumers over the Internet. A new ACH transaction code, ‘WEB’, specifically identifies consumer ACH debit transactions authorized over the Internet. The new rules in their entirety, as well as additional guidance from NACHA, are contained in both the ‘2001 ACH Rules’ and the ‘Corporate Edition of the 2001 ACH Rules’. Under the new rules, a company offering an ACH debit as a payment method is required to perform the following actions: implement commercially reasonable fraudulent transaction detection systems; verify the validity of routing numbers provided by consumers; establish a secure Internet session prior to the consumer key entering any banking information; and, conduct an annual audit to ensure that financial information obtained from consumers is protected by adequate levels of network and physical security as well as personnel and access controls.

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OPC Ad Campaign

Official Payments Corporation announced the company has launched a concentrated national consumer advertising campaign that will run between now and the April 16 tax deadline. The campaign has been designed to build consumer awareness of the company’s credit-card payment service for federal and state income taxes, which is available over the telephone and Internet. The media campaign, which is budgeted for up to $4 million, will run on national radio networks, major market metro radio stations and in national newspapers including the Wall Street Journal. New to this year’s efforts will be a series of commercials on network and cable television.

The theme of the campaign builds on the previous year’s highly successful radio and newspaper campaign and publicizes the convenience, cash management and credit card rewards attributes of the company’s service. In addition to the consumer campaign, Official Payments is also targeting accountants and tax preparation professionals in separate print executions in several accounting trade publications.

Official Payments is authorized by a contract with the Internal Revenue Service to accept Form 1040 Balance Due Payments, filing and payments with Form 4868 Extension of Time to File, and 2001 Form 1040ES Estimated Payments on the Internet at [www.officialpayments.com][1] or by telephone at 1-800-2PAY-TAX. The company has similar agreements with 18 state governments.

The campaign’s creative executions were developed internally at the company in consultation with Bruce S. Nelson, who serves on the Board of Directors of Official Payments. Mr. Nelson, who is a renowned brand strategy executive, is also Executive Vice President and Chief Marketing Officer of The Interpublic Group of Companies, Inc. (NYSE: IPG). “From a marketing perspective, Official Payments is in a highly desirable position. The company has the advantage of a concentrated selling season during tax time, which allows us to leverage an intense awareness campaign with a highly efficient budget,” said Mr. Nelson. “Another impressive advantage is that the credit card companies and the IRS are conducting unilateral marketing efforts to drive awareness of the credit card payment option. When you combine the efforts of Official Payments, the IRS and the credit card companies, it generates a truly impressive frequency and reach,” Mr. Nelson added.

In 2001, taxpayers can use the American Express(R) Card, Discover(R) Card, and MasterCard(R) to make their tax year 2000 balance due, tax year 2000 extension, and tax year 2001 estimated payments by calling 1-800-2PAY-TAX or by visiting [www.officialpayments.com][2] on the Internet. Official Payments will charge taxpayers a convenience fee of 2.5% of their tax payment for the service. For example, a taxpayer who makes a $500 tax payment would be charged a total of $512.50; $500 for the tax payment, and a 2.5% fee, or $12.50, to cover the cost of the service.

About Official Payments Corporation

Official Payments Corporation (Nasdaq: OPAY) is the leading provider of electronic payment options to government entities. The company’s principal business is enabling consumers to pay their government taxes, fees, fines, and utility bills by credit card, via Internet and telephone. The company is unequaled in market penetration and national footprint. Official Payments is the incumbent in contracts with the Internal Revenue Service, 18 state governments, and well over 700 county and municipal governments in 43 states across the United States. In 2000, Official Payments collected and processed over $925 million in federal, state, and local government payments.

Official Payments was founded in the San Francisco Bay area in 1996. Thomas R. Evans, the former President & CEO of the Internet company GeoCities, became Chairman & CEO of Official Payments in the summer of 1999. Mr. Evans brought Official Payments public in November of 1999, raising $80 million in its IPO on the NASDAQ national market. The company has experienced rapid and sustained growth over the past six reported quarters in revenue, new client acquisition, and addition of incremental services to existing clients. The company’s success can be attributed to the combination of an enormous market opportunity with a highly skilled and experienced management and staff, aggressive sales and marketing, and a core competency in developing and implementing leading-edge technical systems.

[1]: http://www.officialpayments.com/
[2]: http://www.officialpayments.com/

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New ECHO Service

Electronic Clearing House, Inc. announced that it has created a joint marketing alliance with Provident Bank to offer Consolidated Returns Services to ECHO’s customers and prospects nationwide. Consolidated Returns service is an effective method of consolidating a company’s returned checks into one bank, even if the company has multiple depository banks nationwide. This allows a company to better control their collection process by speeding the collection of returned checks through electronic re-presentment and provides significant cost savings on banking fees usually associated with NSF items.

![][1] Another major benefit of utilizing the Consolidated Returns Services is reducing the return check process to as little as 72 hours. This gets the bad check writer into ECHO’s NCIS negative database faster and eliminates the chances that any additional checks written by the same bad check writer will be approved.

“We are pleased to work with Provident Bank in offering Consolidated Returns Services. This alliance will enhance our ability to offer merchants the most comprehensive check services in the country and also continue to strengthen our NCIS database,” stated Joel M. Barry, CEO of ECHO.

About Provident Bank. The Provident Bank is the main subsidiary of Provident Financial Group, Inc. (Nasdaq:PFGI), a Cincinnati-based company with $13.9 billion in on-balance sheet assets and $19.6 billion in managed assets. The Provident Bank provides full-service retail and commercial banking operations regionally and nationally. Additional company information is available at [http://www.provident-bank.com][2].

About ECHO. Electronic Clearing House, Inc. provides debit and credit card processing, check guarantee, check verification, check conversion, check re-presentment, check collection, and inventory tracking to over 58,000 retail merchants and U-Haul dealers across the nation.

[1]: /graphic/providentbank/providentbank.gif
[2]: http://www.provident-bank.com/

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CollectionsX COO

CollectionsX, the leading online exchange for the debt collections industry, announced the addition of Gregory M. Shelton, as Chief Operating Officer. Mr. Shelton joins CollectionsX, as part of a reassignment within the CyberStarts family of companies. Mr. Shelton will provide strategic management expertise, assist with business development efforts, and oversee CollectionsX’s day to day operations.

“We are thrilled to add an individual with the stature and experience of Greg Shelton to our management team,” said Alec Smythe, CEO of CollectionsX. “Greg’s experience and knowledge of the receivables management space will greatly assist us in delivering leading debt sales and contingency placement solutions to the industry.”

Mr. Shelton has over 30 years of collections industry expertise. Prior to joining the CyberStarts family of companies, Mr. Shelton founded AMO and served as its President and CEO. In 1995, Mr. Shelton co-founded OSI, today the nation’s largest receivables management company, where he served as EVP and COO. From 1992-1995, he headed First Financial Management’s banking and retail divisions as EVP, leading the combined sales and marketing efforts. >From 1986-1992, Mr. Shelton worked with CitiBank, as VP of the U.S. Card Products Group and National Recoveries Director for Visa and MasterCard Products.

About CollectionsX

CollectionsX is the leading online B2B exchange for the debt collections industry, making it easier, faster, and more convenient for collection agencies and credit grantors to interact with each other. CollectionsX utilizes advanced, custom auction capabilities to help companies buy and sell debt portfolios more easily. The company also assists creditors in placing debt portfolios for contingency collection by leveraging proprietary information, analytics and cutting edge technology. CollectionsX is based in Atlanta and has offices in New York, Chicago and Miami. For more information, visit [http://www.CollectionsX.com][1].

About CyberStarts

CyberStarts is a technology holding company that focuses on opportunities in the financial services sector. Its mission is to invest in and operate technology companies in under-served markets with financial services; currently, CyberStarts focuses on collections, insurance, payments, and investments sectors. CyberStarts’ strategic investors and partners include Marsh & McLennan Capital, NCO Group, iXL, Guyton Partners, Wachovia Capital, and First Data.

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

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Card Response

Response rates to direct mail credit card solicitations continue to stagnate. Meanwhile, 5% of consumers now use the Internet to shop for a new credit card compared to 2% in 1999. The latest data from BAIGlobal shows the response rate to direct mail credit card offers have dropped to 0.60% compared to 1.6% in 1Q/99. The mail volume of credit card offers exceeded 3 billion between 3Q/99 and 3Q/00.

DIRECT MAIL CREDIT CARD OFFERS
PERIOD MAIL VOLUME RESPONSE RATES
3Q/00 888.0m 0.6%
2Q/00 991.8m 0.4%
1Q/00 629.4m 0.7%
4Q/99 510.2m 0.7%
3Q/99 710.3m 0.9%
3Q/98 811.3m 1.3%
3Q/97 748.1m 1.3%
3Q/96 562.8m 1.4%
3Q/95 662.7m 1.6%
3Q/94 550.0m 1.6%
3Q/93 380.5m 2.6%
3Q/92 223.9m 3.3%

m-millions Source: BAIGlobal, Inc.

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