EDS Jobs

The ‘Year 2000’ or ‘Y2K’ business is so red hot EDS’ CIO Services announced Friday it will hire an additional 500 programmer analysts as ‘Year 2000’ consultants. A key component to the EDS compensation package is a “Millennium Bonus” which returns a percentage of profits to each employee in the Year 2000, based on tenure. EDS signed more than $125 million in new business last year to fix the millennium bug. The firm’s financial services group recently signed Sumitomo Bank and Philips Semiconductors.


Capturing $16 Trillion of US Payments

Despite huge expectations surrounding electronic commerce, major financial and security challenges remain to be addressed before e-commerce takes off, according to David Readerman, an Internet software analyst for NationsBanc Montgomery Securities.

“We are watching closely to see if the Internet is up to the task of taking on true electronic commerce,” Readerman said. He defined electronic commerce as an “online exchange of payments,” rather than simply the exchange of data.

Readerman made his comments to investors attending NationsBanc Montgomery Securities’ 15th Annual Technology Week investment conference, which has run since January 27 and ends today. The conference has attracted more than 1,900 investment professionals to hear presentations by 147 public companies and 35 private companies. During the conference, NationsBanc Montgomery Securities analysts are conducting a series of workshops that provide attendees with up-to-the-minute analyses of a wide variety of industry segments.

Readerman focused his concerns about the Internet on its ability to handle secure transactions. “Authentication becomes really important on the Internet, since the buyers and sellers can’t physically see or talk to each other. You’ve got to be sure the customer is who he says he is, and, for that matter, that the customer needs assurance that the merchant is who he claims to be,” Readerman said.

In addition to consumer transactions, other types of electronic transactions that may increasingly move to the Internet are banking, stock brokerage and payments processing.

One of the challenges for companies hoping to profit from electronic commerce is that the current U.S. electronic payments systems already works well, Readerman said. For e-commerce to grow, it must offer merchants and customers a better value proposition at a lower cost, he said.

Major financial institutions, including Visa, Citicorp, BankAmerica and NationsBank are moving quickly to solve transaction security issues and to make e-commerce financially viable compared to current shopping, procurement and payment systems, Readerman said.

Once these problems are addressed, the market opportunities are vast, Readerman said, since there are $16 trillion worth of payment flows and transactions in the U.S. annually, including $351 billion in consumer-transactions annually.

NationsBanc Montgomery Securities LLC (NMS), a subsidiary of NationsBank Corporation, is a full-service investment bank and brokerage firm with approximately $800 million of regulatory capital. The company provides research, trading and issuance in the equity and fixed-income markets (high yield, emerging markets, high grade and mortgage-backed markets). Other services include M&A advisory, financial buyer coverage, loan syndications, global investment banking, real estate finance, mortgage finance, money markets and the primary dealer.

Through NationsBank, NMS clients can also access products and services that include senior bank debt, bridge financing, real estate banking, treasury management, trade finance and risk management (derivatives products and foreign exchange).

NMS is a registered broker-dealer with the Securities and Exchange Commission and is a member of the National Association of Securities Dealers and the New York Stock Exchange. NMS employs more than 2,200 investment professionals.


GCF Expansion

General Credit Forms announced Friday the acquisition of a facility in Albany, Georgia that manufactures a range of business forms including credit card transaction products. The Georgia manufacturing plant is owned by Moore USA and employs 110. In addition to the acquisition agreement, GCF entered into a long-term supplier agreement to produce Moore’s credit card transaction forms. GCF, based in Earth City, MO with 200 employees, produces payment receipt products for the credit card industry as well as a number of non-paper based products including credit card advertising material, merchant management services and electronic terminal services. GCF’s last acquisition occurred in 1995 with the purchase of Golden Business Forms.


Smart Phone Card Potential

Smart phone cards will help wireless and cellular service providers, including AirTouch, AT&T Wireless, GTE, Sprint PCS, and Western Wireless, to sign up one-half billion subscribers worldwide by 2002. This is one conclusion from a new study published by Killen & Associates, “Smart Card Opportunities for Phone Card Providers.”

“Smart phone cards are ideally suited for the wireless and cellular service businesses for a number of reasons,” said Michael Killen, President of the company, “Many wireless customer prospects are poor credit risks. Smart phone cards enable wireless service providers to offer service to these and other prospects with appropriate prepayment or charge requirements.”

“Services providers can also expect new subscribers and revenues from smart card multi-funtionality,” added Killen. “The same smart card that is used for wireless phone service will also be used for transportation, small purchases, and possibly Internet purchases. Co-branding partnerships built around the increased capabilities of smart cards will benefit all parties.”

Loyalty programs will also help grow the revenues of telephone companies because smart cards can store data needed for the most complex loyalty programs. Service customers will be inclined to build up credits of all types on their smart phone card.

Additional details about the study are available at the company’s Web site, . For more information contact Karl Duffy at tel 650 617-6130, FAX 650 617-6140, or e-mail, karl@killen.com

The company’s studies and video series enable high-level executives and their teams to identify business opportunities created by advances in computer and telecommunications technology, changing customer needs, and the competitive landscape.

Killen & Associates is the only research company that provides a series of half-hour video interviews with each study. Business dignitaries who have shared their insights in such interviews include the Minister of PTT Germany; the head of Oftel, UK; the former chairman of AT&T, and the leaders of Europay, S.W.I.F.T., Mondex, VISA France, and 400 other companies.


Partners First Finalized

Consultant First Annapolis says its new monoline credit card services company, Partners First, is up and running. The joint venture was announced September 4 by Bank of Montreal, Harris Bank, BankBoston and First Annapolis. Under terms of the original agreement Bank of Montreal/Harris Bank will own 69%, BankBoston 19% and First Annapolis 12%. Bank of Montreal is kicking in $115 million in cash and its Harris Bank card portfolio. BankBoston is contributing a $1.2 billion card portfolio in exchange for $5 million in cash and a share of the new company. Under terms of an earlier agreement First Annapolis developed the portfolio segment BankBoston is contributing, which represents mainly out-of-core- area accounts.


Equifax Hires Allhusen

Thomas F. Chapman, Equifax president and chief executive officer, Thursday announced that James J. Allhusen, 49, will join Equifax Inc. as executive vice president and group executive. Allhusen will be responsible for the strategic and operational leadership of North American Information Services, the company’s largest business unit.

“Jim will provide the leadership to continue our outstanding growth by capitalizing on our position as a premier provider of information and knowledge-based solutions that are changing the shape of global commerce,” Chapman said.  “His management experience, entrepreneurship and competitive drive is critical to our future as the lowest cost, highest quality producer, providing total solutions to our customers.”

Allhusen comes to Equifax with 25 years of marketing and financial services experience, nationally and internationally.  He was most recently with Advanta Corporation, one of the largest bankcard issuers, where he was executive vice president responsible for both the domestic and international card businesses.  Previously he was with Standard Chartered Bank as general manager, with experience working in Asia and the Middle East.  Earlier in his career Allhusen was with Household Bank and BancOhio National Bank.

At Equifax, Allhusen will be leading North American Information Services’ new industry aligned organization responsible for sales, marketing and operations, reporting to Chapman.  Allhusen replaces Equifax veteran, John Rougeou, who retires February 28, 1998.

Allhusen earned a bachelor of arts degree from Colgate University and graduated from the School of Bank Marketing at Colorado University.  He and his wife, Susan, and five children will live in Atlanta.

Equifax is a global leader in providing information, processing, consulting and software solutions that facilitate and enhance buyer-seller transactions worldwide.  The company serves businesses in the banking, finance, retail, credit card, telecommunications/utilities and health care administration industries.  Equifax is changing the shape of global commerce through growth and innovation, driven by technology and people.  It operates in 17 countries with sales in 40 countries.  Founded in 1899 in Atlanta, Equifax today has 10,000 employees around the world.  Revenues for the 12 months ended December 31, 1997, were $1.4 billion.  Visit the company’s Internet web site at .


Wachovia Targets Cardholders

Wachovia said Thursday it has expanded its insurance sales force to its core markets throughout the Carolinas and Georgia. The company also announced that it has launched a comprehensive direct marketing program to sell insurance.

Last year, Wachovia Insurance Services Inc. began offering the life, disability and long-term care insurance products of 10 nationally recognized insurance carriers under a pilot program in Winston-Salem, Greensboro, Charlotte and Raleigh, N.C. The program, which is directed toward individuals and small businesses, recommends insurance solutions in meeting estate planning, business continuation and general insurance needs.

Wachovia Insurance Services is expanding its efforts to serve private banking customers and small businesses in Atlanta, Marietta and Savannah, Ga.; Hilton Head, Greenville/Spartanburg, Columbia and Charleston, S.C.; and adding new North Carolina markets in Hendersonville, Greenville, Wilmington and Southern Pines. Wachovia plans to roll out the program in these markets in the first quarter and to hire 12 additional insurance representatives. In addition, the program will be expanded to Virginia later this year.

Also last year, Wachovia Insurance Services initiated a pilot program to market life insurance products through investment counselors in 10 North Carolina cities. Wachovia is expanding the program to include an additional 130 investment counselors in the Carolinas and Georgia during the first quarter.

“Investment counselors currently sell annuity, mutual fund and fixed- income securities, and the addition of insurance to their portfolio of products and services is a natural fit in meeting the financial needs of customers,” said David L. Holton, head of Wachovia Insurance Services.

“Wachovia’s insurance sales efforts have been well received by our customers, who welcome the opportunity to consolidate their financial services with a single institution that they trust.  We look forward to making insurance available to customers located in these new markets this year.”

The sales force expansion is complemented by the launch of a direct marketing program to deposit and credit card customers. Wachovia expects to expand its offerings to include term life, homeowners, health benefit cards and other ancillary products in addition to its accidental death and dismemberment insurance, credit life insurance and credit disability insurance offerings.  These marketing efforts will generate more than 10 million contacts with customers through the mail or telephone.  Strategic database modeling and segmentation will be used in directing appropriate products to customers.

“Direct marketing of insurance is an important component of Wachovia’s mission to help customers conveniently meet their financial goals,” Holton said.  “1998 promises to be an exciting year for Wachovia Insurance Services as we expand our operations. The successes recognized in our pilot programs confirmed that customers will purchase insurance through Wachovia.”

Wachovia Insurance Services Inc. is a wholly owned subsidiary of Wachovia Bank, N.A., the principal banking subsidiary of Wachovia Corporation (NYSE WB).  Wachovia Corporation, which has dual headquarters in Winston- Salem, N.C., and Atlanta, is the 17th largest bank holding company in the country with assets of $65.4 billion.


First Debit Bureau

Fair, Isaac and Company, Inc. announced today that it has formed a product development and marketing alliance with Deluxe Corporation to develop a series of data-based decision making solutions to help financial services companies and retailers better manage their deposit customer relationships. The efforts will result in the nation’s first “debit bureau” — a data warehouse integrating multiple sources of deposit information and “mined” with a suite of decision support tools developed by Fair, Isaac. In addition to selecting Fair, Isaac as a long-term development partner, Deluxe chose Acxiom Corporation to develop and manage the data warehouse.

Financial institutions and retailers today face unprecedented fraud losses and a growing need for more sophisticated decision support solutions to manage debit and deposit accounts. The Fair, Isaac/Deluxe alliance paves the way for the development of comprehensive solutions to meet these growing demands.

“Fair, Isaac’s sophisticated decisioning technology, coupled with Deluxe’s comprehensive debit data, will provide significant benefits to retailers and bankers alike,” said J. A. (Gus) Blanchard, Deluxe Corporation president, CEO and chairman. “Fair, Isaac was clearly the right choice for Deluxe. It is unique among its competitors as the only company with a proven track record in data analysis, predictive modeling, and complete software solutions as well as the industry expertise necessary to help businesses make effective use of the technology.”

Said Larry Rosenberger, Fair, Isaac president and CEO, “Fair, Isaac is proud to have been selected by Deluxe to help develop the next wave of payment industry decisioning solutions. Deluxe is the recognized standard in debit data and electronic banking services. The Deluxe/Fair, Isaac alliance builds on the time-proven capabilities of both companies and promises to pave the way for many unprecedented advances in deposit account acquisition and management which, in turn, open new markets for Fair, Isaac.”

“The alliance presents a new, innovative approach to the management of the consumer risk-reward proposition,” said Patrick Culhane, executive vice president with Fair, Isaac. “The ‘debit bureau’ will ultimately provide the financial services industry and retailers with long sought-after services, and fits with Fair, Isaac’s vision of helping clients more fully manage customer relationships across the entire client enterprise.”

Since 1956, Fair, Isaac has helped businesses maximize the value of data for strategic decision making. The company pioneered the use of credit scoring in consumer and commercial lending. Today, Fair, Isaac provides data-driven decision making solutions including data management, analytic tools, software and consulting to businesses in financial services, direct marketing, personal lines insurance, retail, and health care. Headquartered in San Rafael, Calif., Fair, Isaac employs more than 1200 people in 16 offices worldwide. For the fiscal year ended September 30, 1997, the company reported revenues of $199 million, a 28 percent increase over the prior year.


CheckFree Tops $50m in Q Rev

CheckFree Holdings Corporation, Inc. announced quarterly revenues of $56.5 million for the second quarter ended December 31, 1997 compared to $38.5 million for the same period in the prior year.  For the six months ended December 31, 1997, the Company reported revenues of $108.6 million, compared to $71.2 million for the same period in the prior year.

Excluding a charge for purchased in-process research and development costs in the quarter related to the acquisition of Advanced Mortgage Technologies, Inc., the Company reported a net loss of $1.1 million for the quarter, or two cents per share, compared to a net loss of $5.3 million or 13 cents per share for the same period in the prior year.  Including the charge for purchased in- process research and development, the Company reported a net loss for the quarter of $1.7 million, or three cents per share, compared to a net loss of $5.3 million, or 13 cents per share for the same period in the prior year.

For the six months ended December 31, 1997, excluding a gain on asset dispositions, exclusivity amortization and a charge for purchased in-process research and development, the Company reported a net loss of $4.4 million, or eight cents per share, compared to a net loss of $13.1 million, or 31 cents per share for the same period in the prior year.  Including the gain, exclusivity amortization and purchased in-process research and development, the Company reported net income on a year to date basis of $8.1 million, or 14 cents per share, compared to a net loss of $13.1 million, or 31 cents per share for the same period in the prior year.

The Company reiterated its comfort with analysts’ projections that it will achieve break-even operating results in the quarter ended March 31, 1998, and profitability in the quarter ending June 30, 1998.

“The financial electronic commerce market is on the verge of unprecedented growth as banks begin to implement their next generation solution,” said Peter J. Kight, chairman and CEO of CheckFree.  “It’s a powerful combination when customers can log into their bank to electronically manage their personal finances.  Today CheckFree’s biller relationships and processing engine are already helping our participating banks offer their customers online banking, bill presentment and bill payment.”

CheckFree currently has agreements with over 290 financial institutions to provide banking and electronic billing and payment processing services.  At December 31, 1997, more than 2.2 million home banking and bill payment subscribers were relying on CheckFree for behind-the-scenes processing, an increase of 70 percent over December 31, 1996, and a 10 percent sequential increase over September 30, 1997.

CheckFree and Integrion Form Strategic Alliance to Expand Electronic

Billing and Payment

The emergence of electronic billing and payment reached a milestone as CheckFree and Integrion formed a 10-year strategic alliance to provide complete electronic banking, billing and payment based on Integrion’s Gold message standard for electronic commerce.  The two companies will work with IBM, Integrion’s primary technology partner, to fully integrate Integrion’s Interactive Financial Services (IFS) banking platform with CheckFree’s electronic billing and payment processing infrastructure.

“Through Integrion, America’s financial institutions have an opportunity to define the way in which financial electronic commerce occurs,” said Kight. “The sooner banks are up and running on IFS, the sooner they will enjoy the cost efficiencies and service enhancements of the combined Integrion and CheckFree alliance and the sooner they will be able to offer value-added services to their customers.”

Within the first half of 1998, IFS will be seamlessly connected with the CheckFree processing engine to ensure that high quality, efficient electronic billing, payment and customer care are provided.  Also in 1998, banks using IFS will be the first to offer their customers fully integrated electronic banking, billing, and payment services developed by CheckFree and Integrion.

As the only company with a proven, in-market tested solution for electronic billing and payment, CheckFree has contracts with 22 of the nation’s largest billers, the largest statement processor and will soon announce the full market launch of some of the largest billers in the world. Combined, these billers represent nearly 400 million billing and payment transactions per month.  With electronic billing, banks and other billers can save from 30-60% over traditional methods of bill delivery.

Genesis Platform Consolidation

The Genesis project consists of three phases which address infrastructure enhancements to improve operating effectiveness for remittance processing, data center costs and electronic banking and bill payment.  To date, the next generation remittance engine has been completed and is in production at high volumes with traffic from many sources including Chase and Key banks.

CheckFree is now more than half way through the second phase of the project — creating a centralized, state-of-the-art data center.  Most recently, the Company completed the consolidation of the Chicago data center into the new ECenter in Atlanta.  In that single cutover, one million accounts were moved 800 miles without a single customer noticing an interruption of service.  By June 30, Columbus and Austin will be moved to the new center.

CheckFree is also right on track for the third component of Genesis, the development of next generation banking and bill payment processing engines.

CheckFree Investment Services Reaches 400,000 Portfolio Milestone

Through the Company’s portfolio management systems, APL and APL WRAP, CheckFree provides portfolio accounting, performance measurement, trading and reporting for more than 215 institutions.  These leading institutions now manage more than 400,000 portfolios representing over $250 billion in assets. The Investment Services division has doubled the number of portfolios on the APL system in three years, a 30 percent annual rate.

Highlights of the quarter ending December 31, 1997

—  December 22, 1997 — CheckFree Holdings Corporation, Inc. is formed         with CheckFree Corporation remaining as the Company’s main operating         subsidiary.

—  December 10, 1997 — American Electric Power signs up for CheckFree         E-Bill to offer electronic billing and payment to its 2.9 million         customers.

—  November 24, 1997 — Chairman and CEO Pete Kight Joins RDS ’97 to         explore “The Role of Banks in Interactive Billing and Payment.”

—  November 17, 1997 — HomeSide Lending brings CheckFree E-Bill to 1.2         million homeowners in the U.S.

—  October 9, 1997 — Chase Manhattan Bank signs with CheckFree to become         the first bank in the U.S. to offer electronic bill presentment         services to its individual and commercial customers.  The service is         expected to be live the first quarter of 1998.  Chase’s credit card         and mortgage units will be among the first billers to go live on the         service.

—  October 6, 1997 — CheckFree acquires leading default management         system from Advanced Mortgage Technology, Inc.  CheckFree is now the         only company that can provide mortgage origination, servicing,         tracking and default management.

CheckFree is a wholly owned subsidiary of CheckFree Holdings Corporation, Inc.  Founded in 1981, CheckFree () is the leading provider of electronic commerce services, software and related products for 2.2 million consumers, 1,000 businesses and 850 financial institutions. CheckFree designs, develops and markets services that enable its customers to make electronic payments and collections, automate paper-based recurring financial transactions and conduct secure transactions on the Internet.

Certain of the Company’s statements in this news release contain forward- looking statements, including the statement regarding analysts projections of break-even and profitability, (4th paragraph), the statement regarding the connection of IFS and CheckFree’s processing systems (9th paragraph) and the statement regarding expected completion of the Genesis project (12th paragraph).  These forward-looking statements involve risks and uncertainties, including without limitation the timely implementation of existing bank processing agreements, the ability of the Company to sell its processing services to additional banks, the acceptance of the Company’s electronic banking and bill payment services by financial institutions, businesses and their customers, the acceptance of the Company’s applications software, services and related products by financial institutions, the impact of competitive services and products, the Company’s ability to efficiently integrate recent acquisitions, including Intuit Services Corporation, Servantis Systems, and Security APL, the effect of any future acquisitions or divestitures, and the timely development and acceptance of new electronic commerce services and products, as well as the various risks inherent in the Company’s business and other risks and uncertainties detailed from time to time in the Company’s periodic reports filed with the Securities and Exchange Commission, including Form 10-K for the year ended June 30, 1997.  One or more of these factors have affected, and could in the future affect, the Company’s business and financial results in future periods and could cause actual results to differ materially from plans and projections.

                 Consolidated Condensed Results of Operations
                    (In thousands, except per share data)

                            Three Months Ended           Six Months Ended
                                December 31,               December 31,
                             1997         1996          1997          1996
     and servicing         $38,436      $ 21,178      $72,946      $ 42,365
    License fees             7,491         8,602       13,295        13,494
    Maintenance fees         6,419         4,766       13,260         8,353
    Other                    4,169         3,959        9,102         6,955
    Total Revenues          56,515        38,505      108,603        71,167
     Cost of processing,
      servicing and
      support               30,788        23,021       60,119        44,824
     Research and
      development            8,729         7,014       16,797        13,968
     Sales, marketing
      and royalties          7,883         6,849       15,310        12,410
      and administrative     5,093         4,560       10,532         9,606
      and amortization       6,074         5,756       13,116        11,316
     In process
      research and
      development              719           —          719           —
      amortization             —           —        2,963           —
       Total Expenses       59,286        47,200      119,556        92,124
    Net gain on
     disposition of assets     —           —       25,369           —
    Income (loss)
     from operations        (2,771)      (8,695)       14,416       (20,957)
    Interest, net              755           511        1,113           882
    Income (loss)
     before income taxes    (2,016)      (8,184)       15,529       (20,075)
    Income tax expense
     (benefit)                (324)      (2,863)        7,450        (7,025)
    Net income (loss)      $(1,692)     $(5,321)       $8,079      $(13,050)
    Basic earnings per share
     Net income (loss)
      per common share      $(0.03)      $(0.13)        $0.15        $(0.31)
     Weighted average
      number of shares      55,028        41,534       54,846        41,582
    Diluted earnings per share
     Net income (loss)
      per common share      $(0.03)      $(0.13)        $0.14        $(0.31)
     Equivalent number
      of shares             55,028        41,534       57,135        41,582

    Supplemental reconciliation
     of net income (loss)
     and income (loss) per share
    Income (loss) before
     income taxes          $(2,016)     $(8,184)      $15,529     $(20,075)
    Exclusivity amortization   —           —        2,963           —
    In process research
     and development           719           —          719           —
    Net gain on
     disposition of assets     —           —      (25,369)          —
     Adjusted loss
     before income taxes    (1,297)      (8,184)       (6,158)      (20,075)
    Income tax benefit        (190)      (2,863)       (1,712)       (7,025)
    Net loss excluding
     exclusivity amortization,
     in process research
     and development and net
     gain on disposition of
     assets                $(1,107)     $(5,321)      $(4,446)     $(13,050)
    Net loss per common
     share, excluding
     exclusivity amortization,
     in process research and
     development and net gain
     on disposition of assets
     (basic and diluted)    $(0.02)      $(0.13)       $(0.08)       $(0.31)

                       Consolidated Condensed Balance Sheets
                       (In thousands, except per share data)

                               December 31,               June 30,
                                    1997                    1997
    Current assets
     Cash, cash equivalents,
      and investments             $61,283                 $36,516
     Accounts receivable, net      40,630                  44,507
     Other current assets           8,875                   5,200
       Total current assets       110,788                  86,223

    Deferred income taxes             913                   3,063
    Property and equipment, net    41,660                  44,027
    Capitalized software and
     intangible assets, net        55,835                  83,540
    Other                           7,034                   6,983
       Total assets             $ 216,230                $223,836

    Current liabilities
     Accounts payable,
      accrued liabilities and
      other                       $28,180                 $40,293
     Deferred revenues             19,174                  26,498
       Total current liabilities   47,354                  66,791
    Long-term obligations –
     less current portion           7,986                   8,401
    Net stockholders’ equity      160,890                 148,644
       Total liabilities and
        stockholders’ equity    $ 216,230                $223,836

SOURCE  CheckFree Holdings Corporation, Inc.


Check Fraud Epidemic

Special Agent Kevin L. Perkins of the Baltimore office of the FBI cautioned members of the Maryland Check Cashers Association at their latest meeting that check counterfeiting has reached epidemic proportions.

More than 60 billion checks a year are presented for payment in the United States, but each day at least 1.2 million worthless checks are accepted for payment.

Brian Satisky, president of the Maryland Check Cashers Association commented that “we are no longer dealing with incidents where a few transactions are perpetrated by individuals.

“As FBI statistics clearly indicate, the volume of check fraud and the magnitude of the dollar losses involved, increased dramatically during the past several years. Clearly, this challenges our industry to work closer with banks and law enforcement agencies to win the battle.”

Check fraud is now a sophisticated criminal enterprise, where professional and organized group efforts account for more than half the fraud. Modern computer technology, with desktop computers, laser scanners and high definition laser printers, obtainable for a total cost of less than $10,000, enables counterfeiters to produce bogus checks that are almost undetectable.

Special Agent Perkins told the check cashers that much of the fraud perpetrated by organized criminal groups is done in the form of checks in small denominations. These checks are produced in bulk and then sold to black market customers at less than 25% of face value.

The combination of new technologies, and organized groups headed by individuals with above-average intelligence and criminal histories, pose a formidable challenge to financial institutions and law enforcement agencies, the FBI agent explained.

“Ironically, when Congress passed an Act in 1988 requiring banks to process checks within a 72-hour period so that depositors would have quicker access to funds they inadvertently did check fraud perpetrators a favor. Now the banks have less time to confirm the legitimacy of these transactions.”

The Maryland Check Cashers Association employes over 150 residents throughout the state and cashes checks with a face value in excess of $500 million annually.

Maryland’s check cashers sell money orders and wire transfers, provide outlets for utility bill payments, offer credit card advances, income tax preparation assistance and notary public service, sell transportation passes and tokens, prepaid telephone cards, and postage stamps.


PNC Photo Cards

PNC Bank said yesterday it is experiencing a three-fold increase in credit card applications from its Southern New Jersey branches after the introduction last month of a photo VISA or MasterCard. The card features both a digitized photo of the customer as well as a digitized signature, with a turnaround time of about 15 days. PNC says research shows such cards have decreased fraud by 30%-60% among selected segments of the population.


Card Sharks

The Federal Trade Commission’s said yesterday that ‘Operation Loan Shark’ has snagged a total of 37 telemarketing firms engaged in fraudulent advance loan schemes including advance fee credit card scams. Yesterday the Illinois Attorney General joined the federal crackdown by announcing a preliminary injunction against four Chicago area residents who allegedly bilked tens of thousands of consumers nationwide by offering a guaranteed VISA or MasterCard for advance fees ranging from $97.50 to $147.50. Illinois Attorney General Jim Ryan alleged the Chicago defendants collected the advance credit card fees by debiting consumers’ checking accounts and then sending then a ‘Consumer Express’ catalog charge card. Once consumers purchased $400 worth of merchandise from the catalog they would qualify to receive a credit card application. The Chicago group operated under several business names including Premier Card Services, Prime Credit Services, Tower Financial, Colonial Financial and Consumer Express.