Check Washing

The National Automated Clearing House Association warned consumers yesterday to avoid being victims of check washing. NACHA says the best way to protect yourself is to switch to paying bills electronically. Check washing is an emerging crime in which thieves steal checks out of people’s mailboxes and use a chemical solution to erase the ink while leaving the pre-printed information intact. The checks are usually bill payments for utilities, insurance, mortgages and other services.  The criminals then make out the checks to themselves. Reportedly check washing losses will top $2 billion this year.


VeriSmart Mondex Approved

VeriFone, Inc., the leading global provider of secure electronic payment technology, announced Monday that its VeriSmart multi-application smart card architecture and Personal ATM appliance have received Mondex type approval for use in global Mondex Electronic Cash implementations. Mondex approval is an important milestone in establishing the VeriSmart architecture as a standards-based platform for organizations delivering multiple smart card services through a variety of smart card appliances.

“Through this approval, organizations that utilize the VeriSmart solution to deliver Mondex Electronic Cash are assured that it meets our requirements,” said Gillian Chard, Head of Procurement and Licensing at Mondex International Ltd. “With the VeriSmart architecture, Mondex franchisees can quickly implement consumer loading capabilities, while maintaining the flexibility to support the evolving technical requirements and new applications of tomorrow.”

“The VeriSmart system allows service providers to easily and seamlessly offer multiple smart card applications to consumers,” said Thomas J. Kilcoyne, vice president and general manager of VeriFone’s Consumer Systems Division. “Mondex is established as a leading solution for electronic cash, and this approval further confirms the value of the VeriSmart platform for companies deploying Mondex.”

Mondex type approval ensures that the VeriSmart System and the Personal ATM appliance adhere to the specifications required for Mondex transactions. The VeriSmart system is a flexible client/server software architecture that enables financial institutions, telecommunications companies and other service providers to centrally manage multiple smart card applications and host interfaces. The VeriSmart system also provides the flexibility for integrating future smart card capabilities into the existing architecture.

The Personal ATM appliance is a palm-sized smart card reader/writer that offers consumers the ability to access smart card-based services via phone lines in the convenience of their home or office. VeriFone also offers the PayPortTM appliance, which plugs into a personal computer’s serial port and provides functionality similar to that of the Personal ATM. The Personal ATM appliance has already been deployed to deliver electronic cash to consumers’ homes via phone lines, and the PayPort device is designed to add the security of smart cards into consumer Internet applications.

About Mondex International

Mondex International is a subsidiary of MasterCard International. MasterCard International acquired 51% of the company in February 1997 and has decided to adopt Mondex International’s technology as its future choice of strategic chip platform. Mondex International grants licences to franchisees to allow them to exploit the Mondex electronic cash technology in a given territory. Since its incorporation in 1996, Mondex has issued 30 licenses across 6 continents. Mondex is being developed by franchisees in over 50 countries.

Mondex is the only electronic cash system in the world to operate with a single global technology allowing for cross-border payments. It allows up to five different currencies to be carried on the card at any one time in separate electronic pockets. Mondex is currently being used in 23 implementations around the world including Australia, Canada, Hong Kong, Costa Rica, Philippines, UK and USA.

The following companies are shareholders (directly or indirectly) in Mondex International: MasterCard International, National Westminster Bank, Ulster Bank, Midland Bank, Scotiabank, Credit Union Central of Canada, The National Bank of Canada, Bank of Montreal, Canada Trust, Le Mouvement des caisses Desjardins, Toronto-Dominion Bank, Royal Bank of Canada, Canadian Imperial Bank of Commerce, The Hongkong and Shanghai Banking Corporation, Wells Fargo, Citibank NA, Chase Manhattan, First Chicago NBD, Australia and New Zealand Banking Group, Commonwealth Bank of Australia, National Australia Bank, Westpac Banking Corporation (Australia), ANZ Banking Group (New Zealand), Bank of New Zealand, Countrywide Banking Corporation, The National Bank of New Zealand, ASB Bank and Westpac Banking Corporation (New Zealand). Further Information regarding Mondex is available on their web site at:

About VeriFone

VeriFone, Inc. (), a wholly owned subsidiary of Hewlett-Packard Company, is the leading global provider of secure electronic payment solutions for financial institutions, merchants and consumers. VeriFone has shipped more than six million electronic payment systems, which are used in over 100 countries.


Debit FraudWatch

Mellon Network Services said yesterday it is joining with Applied Communications and Nestor to provide ‘FraudWatch’, a debit card fraud monitoring system.  ‘FraudWatch’ utilizes ‘Predictive Risk Management’ technology from ACI and Nestor to monitor, predict and respond to fraud in off-line debit card portfolios. ‘FraudWatch’ employs neural network technology to learn usage patterns of individual cardholders and identifies potentially fraudulent debit card transactions within ten minutes.


Pager Promotion

Budget Rent a Car  and American Express have teamed up to offer a free $80 Motorola pager exclusively to American Express cardholders when they rent with Budget between now and the end of July. To receive the free Motorola pager, customers must dial the special toll-free number provided in their American Express statements following the month of their rental.  No activation fee is needed.  Advance purchase of a 12-month service contract is required.Cardholders are also invited to join Budget’s new frequent renter programs, ‘Perfect Drive’ and ‘Fastbreak’.


Fraud Catalog Available

The Fraud & Theft Information Bureau, the 15-year old Boynton Beach, Florida based, prize winning publishing and consulting company specializing in helping business and banks eliminate fraud and other losses, has just released its latest catalog.

The catalog contains the manuals and fraud-blocker data bases that help prevent losses from credit card and check fraud, chargebacks and termination of Visa/Mastercard merchant status.

The fraud & Theft Information Bureau was recently awarded the J. Edgar Hoover Memorial Award “for saving businesses, banks, and consumers millions of dollars with their publications and consulting services.”

The most popular of all the company’s manuals is Credit Card & Check Fraud: A Stop-Loss Manual, while the most popular of the data bases is the Directory of Mail Drop Addresses and Zip Codes, which identifies the addresses that are a popular shield for credit card and check criminals and their fraudulent purchases.

The company was founded by Larry Schwartz and Pearl Sax, publishers for 10 years of the Fraud & Theft Newsletter and authors for many years of a monthly column on direct marketing fraud prevention for DM News magazine. They are also founders and directors of CHECKS BY PHONE and CHECKS BY WEB, the worldwide instant payment by check services.

The entire catalog can be viewed at the company’s worldwide web site, . It is also available by phone at 561-737-5800; via their e-mail address, [][1], or by mail at Fraud & Theft Information Bureau, P.O. Box 400, Boynton Beach, FL 33487.



App Fraud Tool

Fair, Isaac and Trans Union of Canada announced Friday they have collaborated to develop ‘RAVEN’, a fraud detection system to help Canadian credit grantors detect fraud during application screening. RAVEN was developed on credit bureau data, Trans Union of Canada’s ‘HAWK’ fraud detection system data, and Canadian client application data. Fair, Isaac fused the strengths of multiple modeling technologies and techniques — its ‘ADVISE’ data mining tool and ‘INFORMPLUS’ along with neural networks — to optimize ‘RAVEN’s’ precision in recognizing application fraud.’RAVEN’ rank-orders the likelihood an application is fraudulent and focuses on identifying true-name fraud — those cases of stolen identity. RAVEN also helps detect other cases of application fraud, such as attempts to create or embellish an identity.


April Showers

After a strong March, revolving credit eased a bit in April as American consumers added 33% less debt this year than last year. According to April consumer credit figures released by the Federal Reserve Friday, Americans added $2.3 billion to total revolving debt during April. Revolving credit grew at a seasonally-adjusted rate of 5.2% this April compared to 6.9% one year ago. Overall consumer credit, exclusive of home mortgages, grew 5.3% for April 98 compared to 1.9% for March 98 and 9.0% for April 97.At the end of April American consumers were $1.250 trillion in debt.

                                 REVOLVING CREDIT HISTORICAL
       Apr98    Mar98  Feb98   Jan98   Dec97   Nov97  Oct97  Sep97  Aug97 Jul97      
%GRWTH: 5.2%    1.0%  8.4    4.7    2.3    -2.1   10.0    6.2    8.0 9.4             
$OWED: $539.4    537.1  536.6   532.9   530.8   529.8  530.7  526.4  523.7 520.2        
              Source: Federal Reserve; revised figures as of 06/05/98



VA-based Morph Technologies released its latest version of ‘DynaMorph’, a Web application engine.  The new release adds the ability to validate and authorize credit cards using CyberCash’s Internet merchant solution, and interact with Netscape’s LDAP server.  These new capabilities will enable designers of advanced Web sites to interface with corporate LDAP databases, and to construct fully e-commerce-enabled solutions. The company says it sees LDAP and TCP-based e-commerce solutions like CyberCash as critical to the next wave of business-to-business, membership oriented, and consumer Web systems.


Diebold Layoffs

While NCR and other ATM manufacturers are experiencing strong growth Diebold says the business is off. As a result the company announced Friday it will eliminate 500-600 jobs corporate-wide to keep costs in line with revenue expectations. Diebold said its customers in the banking industry are focusing on other issues such as bank mega-mergers and the year 2000 problem, which is taking resources away from ATM deployment, thereby impacting Diebold’s near-term business.


Sims Comm Turnaround

Emerging Company Report, the nationally syndicated television program that profiles emerging-growth companies featured an interview Sunday with the people behind Sims Communications Inc. Sims Communications provides low-cost, turnkey, point-of-sale transaction automation solutions to retailers. Such applications include credit-card processing, ATM card payments and cash-backs, activating prepaid phone cards, even obtaining medical insurance approvals or prepaid cellular-phone service.

“For years, people have been taking about a cashless society,” explained Chief Executive Officer Mark Bennett. “With our point-of- sale terminals, merchants are not only able to offer an increased benefit to consumers by being able to process their credit card or ATM plastic, but research at a McDonald’s restaurant showed customers will increase actual spending by as much as 53 percent.”

Bennett, along with Vice President of Finance David Markowski, have engineered a Phoenix of a turnaround for the company in the last 210 days. “We have converted previous company debt to equity status,” said Markowski. “We have realigned our vendor relationships and product line. We are now poised, over the next 36 months, to have our terminals in 63,000 storefronts, with gross profits exceeding $40 million and annual net income of $15 million. All of this comes at a time when Sims’ stock is trading near its all-time low.”

Other companies discussed this week include:

Internet-based companies like America Online and Excite have been the talk of Wall Street lately. Likewise, Maxnet Inc. and their Internet directory has company officials enthusiastic about competing with Yahoo!. Steroidogenesis Inhibitors International and Gene-Cell Inc. are two companies whose medical breakthroughs and procedures have joined companies like Genentech, Entremed and Abbott Labs in making news within the medical and financial communities. Emerging Company Report is seen Friday evenings at 11 p.m. ET, 8 p.m. PT, and again on Sunday morning at 11:30 a.m. ET, 8:30 a.m. PT on 140 cable TV systems nationwide. The program is also broadcast “On-Demand” at its Web site, [][1]



SmarTalk Sheds Unit

SmarTalkSM TeleServices, Inc. today announced that it has signed a definitive agreement to sell its operator services business to New Millennium Communications Corporation. SmarTalk had acquired the operator services center, located in Butler, PA, as part of the December 31, 1997 acquisition of Conquest Telecommunication Services Corp. SmarTalk has previously stated that the operator services center was not key to its core business and had classified it as a discontinued operation as of January 1st.

In exchange for the contracts and assets relating to the operator services (O+), long distance (1+) and enhanced call services businesses of ConQuest Operator Services Corp., SmarTalk will receive $18 million in a combination of cash and notes less assumed liabilities.

We’re pleased with the terms of the call center sale, stated SmarTalk CFO, Andy Folck. This is a fair price for the facility and allows us to get the discontinued operations off our books.

The call center is a viable operation staffed by a group of outstanding employees it simply was not core to the SmarTalk plan. New Millennium is acquiring an important strategic asset that complements its business strategy, added SmarTalk CEO Erich Spangenberg. There will be ongoing synergies between SmarTalk and the new owners of the call center, and we look forward to working together with New Millennium.

Miami based New Millennium Communications Corporation, founded in 1997, designs, operates and manages low-cost, high-quality communications services for its partners and customers around the world. Its new ATM data-centric network architecture will provide traditional local, long distance and international telephone services as well as frame-relay services, voice/video/data-over-Internet, International Toll Free Services (ITFS), Universal International Free Phone Service (UIFPS) and various Operator Services.

The transaction between SmarTalk and New Millennium has created the optimum business relationship, stated New Millennium President and CEO Edward St. Croix. This acquisition enables New Millennium to integrate another key ingredient in our quest to become a full network service provider.

SmarTalk TeleServices, Inc. currently maintains distribution agreements with the U.S. Postal Service and leading mass merchandisers, consumer electronics retailers, supermarkets, hotels, home office superstores and convenience stores throughout North America and the U.K. The Company also creates promotional phone card programs for advertisers and corporate clients. Visit the SmarTalk website at [ ][1]