Top Telemarketing Frauds

The National Consumers League yesterday released its 1999 list of the ‘Top Ten Telemarketing Fraud Complaints’. Credit card offers placed #7 on the list and credit card loss protection was ranked #9. The NCL says phony promises of credit cards requiring the payment of fees in advance is the primary credit card compliant. The loss protection complaints centers around the use of scare tactics and misrepresentations to sell unnecessary insurance to cardholders. The top NCL fraud complaint: work-at-home schemes.


Big 3 Responds

Following yesterday’s FTC settlement Trans Union insisted FCRA does not contain any specific standards for telephone service levels. TU says it requires only that national consumer reporting companies include a statement on credit report disclosures sent to consumers that the company has a toll-free number at which personnel are accessible to consumers during normal business hours. TU further insisted the law does not define what constitutes “accessible.” Experian says it has already adopted new service level standards to handle the 1 million calls it receives each month. Equifax also says it has taken steps to improve compliance with FCRA. However, Equifax noted it created the credit reporting industry’s first world-class consumer call center in 1991 and also was the first to provide consumers with toll-free numbers that same year, long before it was addressed by the FCRA.


Big 3 FCRA Sins

The big three, national consumer reporting agencies agreed to pay $2.5 million to settle charges that they each violated provisions of the Fair Credit Reporting Act by failing to maintain a toll-free telephone number at which personnel are accessible to consumers during normal business hours. According to the FTC’s complaints, Equifax, Trans Union and Experian blocked millions of calls from consumers who wanted to discuss the contents and possible errors in their credit reports and kept some of those consumers on hold for unreasonably long periods of time. The FTC also alleges that Equifax and Trans Union blocked certain incoming telephone calls based upon the location of the call, including, but not limited to, area code. Each of the proposed settlements would require that the CRAs maintain a blocked call rate of no greater than 10% and an average hold time of no greater than three minutes and thirty seconds. The CRAs will be required to conduct regular audits to monitor compliance. Under the financial terms of yesterday’s settlement, Equifax has agreed to pay $500,000, and Experian and Trans Union both have agreed to pay $1 million.


MBNA & Pirates Renew

MBNA announced Thursday the renewed endorsement of the Pittsburgh Pirates for MBNA’s credit card services through 2004.

MBNA has the endorsement of 15 Major League Baseball teams with the Pirates’ renewal, and is the Official Credit Card Issuer of Major League Baseball along with more than 130 other baseball related endorsements.

The endorsements of the 15 Major League Baseball teams are an important component of MBNA’s Sports sector, one of MBNA’s fastest growing areas, with more than 550 relationships with sports organizations. Among the endorsements received by MBNA are Major League Baseball, the National Baseball Hall of Fame, the National Football League, the National Hockey League, and the National Association for Stock Car Auto Racing (NASCAR).

MBNA Corporation (NYSE: KRB), a bank holding company and parent of MBNA America, N.A., a national bank, has $72.3 billion in managed loans. MBNA, the largest independent credit card lender in the world, also provides retail deposit, consumer loan, and insurance products.


CardBASE CEPS System

CardBASE Technologies (formerly CSI) and VISA International announce their collaboration in the development of advanced software solutions that will enable VISA member banks to issue multi-application chip cards. The system, based on the recently announced Common Electronic Purse Specifications, will support the Visa Cash electronic purse product. “CEPS is seen by the global smart card industry as being the unifying standard in an industry where there are various proprietary smart card schemes already in existence and is the logical evolution for the rapidly expanding smart card market”.

With CardBASE’s expertise in multi-application chip technology, Visa expects to be in a position to offer its member banks (21,000 world-wide) a competitive solution for issuing multi-application smart cards.

The CEPS product solution is being built on the proven card technology framework of CardBASE, the world-leading, distributed and secure software system which delivers a flexible and scaleable smart card e-commerce solution to member banks. The initial components offered are CardBASE Visa Cash Issuer, Acquirer and Clearing, Settlement and Administration. In addition, CardBASE will deliver a suite of CEPS Internet modules to support merchant payment and value load.

Visa is providing CardBASE with direct technical input into the design phase and will work in tandem through the development, test and certification phases of the project. The multi-application aspect of the developments will include support for the full suite of Visa Smart products including credit, debit and electronic purse. Uniquely, the CardBASE solution will support both CEPS and non-CEPS Visa Cash implementations as well as provide backward compatibility with Visa Cash cards already in circulation today.

Speaking on behalf of CardBASE, Aonghus Geraghty CEO, commented “CardBASE has believed for some time that the adoption by the card payments industry of a global standard for electronic purse would propel products like Visa Cash into a totally new and exciting dimension. The opportunity to further develop our relationship with Visa, the world’s leading organisation in card payments, is very exciting and helps ensure that CardBASE maintains its leadership position in the rapidly developing chip card market. The use of multi-application chip cards for cross-border, multi-currency payments is an area in which CardBASE has developed considerable technical expertise. The software products developed as the output of this joint project, will reflect this level of expertise in the speed, efficiency and scalability of the products.”

Mary Buckley, Senior Vice President, Electronic Purse, Visa International, said: “Our work with CardBASE will help to provide our members with more choice and flexibility when looking to implement a Visa Cash program on a multi-application smart card. By using Visa’s version of the Common Electronic Purse Specifications, CardBASE will provide products whih will be totally interoperable, offering greater convenience and utility to cardholders and strengthening the bank’s customer relationship.”


CardBASE Technologies® (formerly CSI) is a European company serving world markets from offices in Ireland, the United States and Africa. Since its foundation in 1993, CardBASE Technologies has positioned itself at the forefront of eCommerce software solutions, providing innovative smart card management systems for the Internet, Banking, Oil Distribution and Airline Treasury Management.

The CardBASE solution supports Multiple Application Smart Cards, Card Personalisation, Card Management, Transaction Processing and Settlement. CardBASE solutions have been specifically designed to support the Visa International led Common Electronic Purse Specification (CEPS), EMV and emerging Public Key Infrastructure (PKI) standards. CardBASE Technologies web address is [][1].


As the “World’s Best Way to Pay,” Visa is the leading payment brand and the largest payment system in the world with more volume than all other major payment cards combined. Visa plays a pivotal role in advancing new payment products and technologies to benefit its 21,000 member financial institutions and their cardholders. Visa has more than 70 smart card programs in 33 countries and on the Internet, with 23 million Visa chip cards, including eight million Visa Cash cards. Visa is pioneering SET Secure Electronic Transaction(tm) programs to enable and advance Internet commerce. There are over 850 million Visa, Visa Electron, Interlink, PLUS and Visa Cash cards, which generate more than US$1.4 trillion in annual volume. Visa-branded cards are accepted at over 17 million worldwide locations, including at more than 500,000 ATMs in the Visa Global ATM Network. Visa International’s web address is [][2].



Gemplus SIM Card

Gemplus and Sonera SmartTrust announced this morning they will enter the market with a ‘GSM SIM’ card, featuring digital signature and Public Key encryption. This is enabled by Sonera SmartTrust technology embedded in the Gemplus SIM card. Mobile operators using this technology with advanced SIM cards will be able to offer their customers a whole new set of secure wireless e-commerce solutions. Analysts predict explosive growth for the mobile device market in the next few years, with most predicting one billion mobile phones in use within the next three to four years.


Casino Cash Biometrics

Patrons may have to show their face to get cash at some casinos. Global Cash Access and Infonox, a Silicon Valley Internet company that develops web-based software for the financial services industry, have entered into an agreement to use Viisage Technology’s patented facial recognition technology in GCA’s new automated cashier machine. GCA’s ‘ACM’ system fully integrates ATM, credit card cash advance, check-cashing, POS debit, Western Union, patron credit markers, and one-to-one marketing opportunities. Infonox develops Internet appliances which provide transaction processing, transaction management and transaction reporting services using its proprietary middleware product, ‘Infonox Active Layer’. GCA and Infonox have also entered into an agreement with Diebold to supply the ‘ACM’ kiosk.


Mondex Originator System

The world’s first full-function ‘Mondex Originator’ system to support smart card electronic cash has been introduced. ACI Worldwide and Mondex Australia announced yesterday the successful installation of the ‘Originator Territory Management System’. The management and control of Mondex e-cash in circulation in any particular currency territory is the responsibility of an ‘Originator’-set up by the local Mondex franchisee. The ‘Mondex Originator’ in each currency territory plays a role similar to that of a central bank in relation to traditional cash, by creating and distributing Mondex electronic value and ensuring the integrity of the system. ACI says the ‘Originator Territory Management System’ completes its set of Mondex products, with ACI now providing end-to-end solutions to support the spectrum of relationships for card issuers including cardholders, merchants, Originator, card manufacturers and other service providers. Mondex says it is now the most market-ready e-cash scheme in Australia.


Providian Opens Austin Center

Providian Financial announced Thursday that it will open a new operations center in Austin, Texas, to accommodate growth in the Company’s consumer lending businesses. Providian plans to hire approximately 600 employees to staff the facility, which is expected to open in March.

The new Austin facility will be Providian’s third in Texas. The company has had a presence in Arlington since June 1999 when it opened a credit card operations center there that now employs over 1,000 people, and it announced in December that it will open an additional operations center in San Antonio by mid-February.

“The tremendous growth in new customers we’ve been experiencing has created the need for additional facilities,” said David Alvarez, president of Providian’s credit card division. “We are happy to be part of the Austin business community and are eager to have area residents join our talented and growing employee population.”

Providian will lease 60,000 square feet at 6500 Tracor Lane. Because the facility was most recently used as a call center, minimal remodeling will be required, enabling Providian to open the center quickly. Recruiting will begin later this month to hire customer representatives and managers.

“Texas offers a very hospitable business climate and, by establishing offices throughout the state, Providian can also benefit from efficiencies in technology, recruiting, and management,” said Providian Vice President Dan Barnard, who is in charge of the company’s facilities. “Equally important is the fact that Austin offers a fast-growing, highly qualified labor force that will support our commitment to growth and 100% customer satisfaction.”

Today, San Francisco-based Providian Financial employs more than 11,000 people nationwide and in the United Kingdom, with facilities in Arlington, Texas, as well as Fairfield, Oakland, Pleasanton, Sacramento, and San Francisco, California; Salt Lake City, Utah; Louisville, Kentucky; Concord and Tilton, New Hampshire; and London, England.

About Providian Financial

San Francisco-based Providian Financial Corporation ([][1]) is a leading provider of lending and deposit products to customers nationwide and also offers credit cards in the United Kingdom. Providian serves a broad, diversified market with loan products that include credit cards, home equity loans, secured cards and membership services.

With a commitment to 100% customer satisfaction, Providian’s mission is to help its customers build or rebuild, protect and responsibly use credit by providing a quality borrowing experience that leads to active and lasting customer relationships. Providian has $20 billion in assets under management and over 11 million customers.



Card-Activated Business Centers

The pioneer of credit card activated business centers got a shot in the arm yesterday from Big Blue. Wayne, PA-based USA Technologies announced Thursday its flagship product, ‘Business Express’ will be added to IBM’s offering portfolio and sold through IBM’s national call center. ‘Business Express’ is the world’s first 24-hour credit card-activated business center each offering business travelers and consumers fast access to desktop workstations, laptop PCs, printers, copiers and fax machines. ‘Business Express’ and ‘Mail Boxes Etc. Business Express’ are currently located in approximately 400 US hotels. USTT has formed an alliance with IBM Global Services that could lead to the installation of up to 5,000 ‘Business Express’ facilities throughout North America. IBM also agreed assist USA Technologies with migrating its proprietary ‘TransAct’ credit card authorization and payment system to the Internet. IBM will also manufacture USTT’s new ‘e-Port’ swipe card technology.


NextCard CIO

NextCard, Inc.,, creator of The First True Internet Visa, announced it has appointed industry veteran Steven Rubinow to the position of chief information officer.

Rubinow brings two decades of technology and information services experience from leading companies such as AdKnowledge, Fidelity Investments, Budget Rent a Car and the Quaker Oaks Company. In this new position at NextCard, Rubinow will be responsible for continuing to build NextCard’s industry leadership position through technology. He will drive all aspects of NextCard’s technology organization.

“This key appointment of Steve Rubinow to NextCard’s senior management team will help us evolve from the leading credit card provider over the Internet to our vision of defining the Internet transaction experience for the consumer,” said Jeremy Lent, chairman and CEO of NextCard. “Steve’s proven business and technology expertise, as well as his knowledge of the Internet and database marketing arena, will be a tremendous asset to our strategic development.”

Rubinow was most recently the CIO at Palo Alto-based AdKnowledge, a leading provider of web advertising management products for advertisers and their agencies, where he was responsible for operations, internal MIS, engineering for database-centric products and database marketing.

Prior to AdKnowledge, Rubinow served as vice president of corporate management information systems at Fidelity Investments in Boston, where he developed systems that combine the numerous sources of data from the investment industry and developed them into actionable recommendations for the management of the company.

Prior to Fidelity, Rubinow was vice president of market planning at Budget Rent a Car, where he managed worldwide marketing research and product development. Earlier, Rubinow served as director of decision support services at the Quaker Oats Company, where he was responsible for the development of analysis and systems to aid decision making in many areas of the company.

Rubinow has an M.S. in Computer Science from DePaul University and a Ph.D. in Chemistry from the University of Illinois, as well as a M.B.A. in Marketing and Finance from the University of Illinois.

NextCard, Inc.

NextCard, Inc. ([][1]), creator of The First True Internet Visa in 1997, is considered the industry’s leading issuer of consumer credit on the Internet. The Company has continued to innovate with its complete GoShopping!(SM) Web site, NextCard Concierge(SM), personalized PictureCard(SM) design and exceptional online customer service.

NextCard is consistently a top 10 online advertiser, operates a network of over 25,000 affiliates and has exclusive card relationships with leading brands including and DILBERT.

The Company publishes the NextCard eCommerce Index(SM), the premier source of online transaction activity and was named a “HOT 100 Company” by Upside magazine and one of “The Standard 100” most important and influential companies in the Internet economy by The Industry Standard magazine. NextCard was ranked the No. 1 credit card brand Internet consumers would consider for use according to ZDNet’s 1999 BrandIQ research study.



Killer E-Mail

A new study says e-mail is rapidly reaching “killer application” status with financial services institutions. MA-based Meridien Research says delivering real-time product information and materials to active and high net-worth individuals is highly effective due to email’s low-cost. The report examines over 40 vendor solutions and the features they offer. Meridien estimates that spending on email solutions now exceeds $200 million and will grow by over 40% per year at large FSIs.