Internet Card Fraud

The National Consumer League’s ‘Internet Fraud Watch’ ranked fraudulent credit card offers as #8 among its top 10 list of Internet scams. The NCL says overall fraud reports have tripled during the past year with multilevel marketing, auctions and sweepstakes also falling among the top 10. Only 19% of fraud victims pay by credit card with 60% paying by check, cash or money orders. NCL’s IFW says the most common Internet credit card scams involve offers of “guaranteed credit regardless of bad credit history”. In the September issue, CardTrak cautioned consumers against applying for VISA or MasterCards online if there is no phone number, physical address or if the company does not have a familiar name.


Juiced-Up Cards

With nearly 25 million “credit challenged” American consumers the sub-prime credit card market is becoming crowded as more issuers jump in offering unsecured credit lines in exchange for exorbitant fees. The September issue of CardTrak, released Friday, reviews several, major sub-prime VISA programs offering $250 unsecured credit lines for first year fees ranging from $150 to $278. One program, widely advertised on the Internet, promotes itself as “no-annual-fee program” while charging a $5 monthly participation fee. CardTrak cited Amalgamated’s secured ‘Gold MasterCard’ program as one of the best for credit impaired consumers, while dubbing the WorldNet Card as a “real sucker VISA”. The ‘WorldNet VISA’, issued through Guatemala City-based Multicredit and marketed to U.S. residents via the Internet, offers a secured ‘Black VISA’ card for an application fee of $3,000 and a $500 annual fee. ![][1]      ![][2]

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ONSALE, Inc., a pioneer and leader in interactive 24-hour online auctions, today announced a new commerce agreement with America Online, the world’s most popular Internet online service.

ONSALE (Keyword: ONSALE) will appear in the Electronics department and in the Computer Hardware department on AOL’s newly designed Shopping channel, the most popular shopping destination in cyberspace. In addition to the listings, ONSALE has also purchased additional advertising space in the Shopping Channel and AOL NetFind to support the initiative.

“We are thrilled about this agreement between ONSALE and AOL,” said Jerry Kaplan, CEO and Co-Founder of ONSALE. “ONSALE looks forward to providing incredible values to AOL’s broad customer-base of 9 million members worldwide.”

Shopping at ONSALE

Shopping at ONSALE will be an easy and fun transaction for AOL members. To place a bid, members need only click a button on their computer screen, fill out a registration form and submit their bid. Typically, a number of identical items are auctioned off simultaneously. When bids are received, prices change or merchandise is sold, ONSALE’s pages are automatically updated with the latest inventory and/or pricing information. Members will be able to monitor the bids and change them electronically. The winning bidder will be notified by email and posted on the site.


ONSALE is a leading electronic retailer pioneering an efficient and entertaining new marketing opportunity — the interactive 24-hour online auction. The company currently specializes in selling computers, peripherals and consumer electronics exclusively over the Internet’s World Wide Web. More than a quarter of a million visitors have placed bids since the launch of the service in May 1995. ONSALE reported gross merchandise sales of $24.5 million for the quarter ending June 30, 1997. ONSALE operates daily auctions Monday through Friday, and posts tens of thousands of items in a typical week. The company leverages the interactivity and sense of community generated online and on the Internet to create an effective new sales medium that generates a high level of customer loyalty and enthusiasm. ONSALE’s Web site is located at .


Goldsmith VISA

Federated Department Stores is rolling out its first VISA card as part of its recently announced ‘Family of Cards’ program. ‘Goldsmith’s Premier VISA’ card will offer a 3% rebate on Goldsmith purchases and a 1% rebate on all other purchases. Applications will only be available by invitation and generally to current private label cardholders charging at least $1,000 per year. Federated-owned FDS National Bank will issue the card. Federated is currently upgrading all its private label card programs to three new levels including ‘Preferred Card’, ‘Premier Card’ and the ‘Premier Plus Card’..


BISYS Loan Connection

The BISYS Group, Inc. (Nasdaq: BSYS), through BISYS Creative Solutions, and Computer Services, Inc. (CSI) of Paducah, KY announced today an agreement to offer financial institutions loan generation services that enable consumers to apply online for a broad range of consumers loans, and to pre-qualify for home mortgages. Within seconds of submitting information by phone or online, consumers can receive an approval or pre-qualification decision based on the institution’s products, rates, underwriting criteria, and a credit report and score.

“BISYS Creative Solutions’ Loan Connection(SM) and Mortgage Connection(SM) services will provide CSI’s clients an income generating mechanism that also will reduce the cost of the loan origination process,” said Steve Powless, CSI’s president and chief operating officer. “The success of our voice response products led us to look for other opportunities that offer enhanced access and service. Loan Connection fits into that mix. It is already proven to be a highly successful revenue builder for financial service providers of all sizes,” Powless said.

Customers will access the lending services either through a toll-free telephone number or their financial institution’s Web. After the consumer provides the necessary information, the BISYS Creative Solutions’ systems automatically evaluate the prospect using the institution’s specific loan criteria and credit bureau information and scoring. Both the consumer and the financial institution are then notified of the determination.

BISYS Creative Solutions’ proprietary technologies, innovative tele- services and distinctive Internet-based programs revolutionize not only consumer and mortgage loan generation, but also mutual fund and insurance product sales. These growth-enabling solutions provide easy, 24-hour consumer access, flexible credit-based decisioning, and rapid response.

The outsourcing approach offered by BISYS Creative Solutions assures quick implementation and immediate returns. This approach also ensures that these solutions keep pace with emerging developments in telecommunications, access, processing, encryption, security, and automation technologies.

Strategically focused on expanding delivery channel alternatives, BISYS Creative Solutions’ unique capabilities enhance service access, leverage marketing efforts, and generate cost effective incremental revenue opportunities.

Computer Services, Inc. is the data processing partner to nearly 300 banks representing over 2,000 locations. In existence since 1965, CSI provides a full range of comprehensive banking solutions ranging from teller window to ATMs, back office to Internet banking, demand deposit to general ledger.

BISYS Creative Solutions, a division of The BISYS Group, Inc., is recognized as the financial industry’s leader in automated sales and lead generation for financial services. More than 500 progressive financial organizations have implemented BISYS Creative Solutions’ growth-enabling programs.

The BISYS Group, Inc., headquartered in Little Falls, NJ, supports more than 5,000 financial institutions and corporate clients through its strategic business units. BISYS provides image and financial information outsourcing to more than 600 banks nationwide, designs, administers and distributes over 40 families of proprietary mutual funds consisting of more than 600 portfolios; provides 401(k) marketing support, administration and recordkeeping services to over 5,000 companies in partnership with 20 of the nation’s leading bank and investment management companies; provides growth enabling loan-by-phone solutions, product pricing research and marketing services; and, provides outsourcing services for the distribution of insurance services. BISYS trades on Nasdaq under the symbol BSYS. Additional information is available at [][1] BISYS Creative Solutions web address is [][2]



DCR Rates MBNA J-Series Card Bonds

Duff & Phelps Credit Rating Co. (DCR) has rated MBNA Master Credit Card Trust II, Series 1997-J Class A certificates ‘AAA’ (Triple-A) and Class B certificates ‘A+’ (Single-A- Plus).

The ratings are based on MBNA’s experience as an originator and servicer of credit card receivables, the stable performance of the outstanding MBNA securitizations and the sound legal structure of both the master trust and Series 1997-J. They also reflect credit enhancement of 15.0 percent for the $637.5 million Class A and 7.5 percent for the $56.25 million Class B.

![][1] The ratings address the timely payment of interest and ultimate payment of principal by the series termination date of February 2007. The ratings do not address the likelihood of payment of principal by the scheduled maturity date.

DCR research on the MBNA master trust or other asset-backed transactions is available on Bloomberg at DCR or by contacting the DCR Hotline at (312) 368-3198/ Performance statistics for rated ABS transactions are also available on DCR’s Web site at

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Consmer Debt Consolidation Booklet

For more than a decade, consumer advocates and authors Gerri Detweiler and Marc Eisenson have been urging consumers to pay off their credit card bills. Now, in what could be seen as an about-face, they are recommending consumers use credit cards to consolidate their debts and save money.

“Right now, some of the best interest rates you’ll find are on credit cards,” says credit expert Detweiler. “While we don’t want to see people get deeper in debt, plastic can make a great consolidation loan if used right.”

After researching options for debt consolidation loans, Detweiler and Eisenson have concluded that low-interest-rate cards often come out near or at the top of the list. They can be relatively easy to get — if your credit history is decent. Most issuers are eager to transfer balances from other cards, and interest rates are often lower than what’s available on more traditional debt consolidation loans at banks and credit unions.

“This fall, credit card issuers will send out approximately 500 million offers — looking to sign people up just in time for their holiday spending,” explains Eisenson, whose Good Advice Press publishes money saving consumer information. “If you simply look through your junk mail, you may find a great consolidation option just sitting there in the pile you would normally toss,” he advises. Even then, Eisenson and Detweiler urge cardholders to create payment plan to retire their debts in three to five years.

In their new booklet, Debt Consolidation 101: Strategies for Paying Off Debts Faster & Saving Money ($4.50 postpaid, Good Advice Press, P.O. Box 78, Elizaville, NY, 12523), they offer easy-to-use charts showing just how much to pay in order to achieve that goal — and how much money will be saved in the process.

“For example, if you owe $10,000 on a credit card with a 17% interest rate, and pay the minimum each month, it could cost you almost $23,500 in interest!” reports Detweiler. “But transfer that balance to an 11% card, and your savings could exceed $15,000.”

While a home equity loan at 9.75% can save someone in the 28% tax bracket more — about $19,000 in this example–and a margin loan against stocks or a mutual fund can save close to $21,000 .. low-rate cards are much more readily available to many debt burdened consumers…and carry no risk of foreclosure or margin calls.

“It’s certainly a painless way to get your debt consolidation program under way,” adds Eisenson.

The authors share many other money saving tips in their booklet.

• The following options are best for individuals with poor credit histories, because they require no credit check:

1) Loans against retirement savings, such as 401 (k), 403(b), and profit sharing plans.

2) Borrowing against the cash value in an insurance policy.

3) Margin loans against investments, such as stocks and bonds.


MasterMoney Campaign

MasterCard is teaming up with a consumer advocacy group to educate 40 million U.S. consumers about debit cards and is launching a $100,000 sweepstakes to raise awareness of ‘MasterMoney’. In partnership with Call For Action, MasterCard will distribute a free ‘Smart Way to Pay’ educational brochure which also includes a ‘Wallet Watcher’ form to make reporting lost cards easier. MasterCard will also sponsor a daily promotion on ‘Live with Regis & Kathie Lee’, starting Oct.1, which offers viewers the opportunity to win a ‘MasterMoney’ card with an account credit of $5,000 or more by correctly identifying a musical selection. MasterCard says the number of ‘MasterMoney’ debit cards is growing 79% annually, hitting 16.5 million at the end of the 2nd quarter.


Chip Card Leadership

Declaring cash and checks an endangered species, VISA International outlined its program to advance smart card deployment worldwide. The roundtable discussion, representing all of VISA’s global regions, was held in New York yesterday and featured a number of announcements including the projection that more than 300 million VISA smart cards will be in use, in five years. The most significant news was the announcement of a new Russian offline chip card called ‘VISA Roskart’, to be launched later this year in St. Petersburg, Russia by Inkombank. VISA estimates the ‘Roskart’ technology has a worldwide user potential of 3.2 billion people, spread among 50 nations with weak banking infrastructures. Also VISA Canada confirmed it will issue 10,000 VISA Cash cards in Barrie this month and VISA’s Latin America region said it launched a co-branded program with McDonald’s in Argentina last month. VISA says the Manhattan interoperable chip card pilot with MasterCard, Chase and Citibank is on course for an October launch.


PKCS to Speed Smart Card Encryption

Competitive Technologies, Inc. (Amex: CTT) today announced that it has entered into an alliance with NTRU Crypto Systems, Inc., ‘NTRU’, of Providence, RI. CTT will assist in commercializing NTRU’s fast and efficient new Public Key CryptoSystem (PKCS). PKCS offers high security at high speeds with low memory and processing requirements making it very suitable for new growth applications such as secured internet, smart cards, secured digital satellite and mobile communications, and electronic commerce and e-cash systems.

At the center of the PKCS is a new approach based on manipulating very small integers, allowing it to achieve high speeds with the use of minimal computing power. This makes NTRU the first commercially viable PKCS not based on factorization of discrete logarithm problems, requiring the use of extremely large integers.

Dr. Jill Pipher, Partner and Co-founder of NTRU said, “Compared to the current industry leaders, the NTRU PKCS features comparable security at over 100 times the speed. Given this and the attribute of using short, easily generated keys for low memory and processing power requirements means that our PKCS technique is applicable to a wide variety of markets and applications, including those where public key data encryption was previously impractical.”

The NTRU PKCS was developed jointly by Professors Jeffrey Hoffstein, Jill Pipher and Joseph Silverman of Brown University, who formed NTRU in early 1996. In March 1997, NTRU formed a strategic partnership with CTT to support the global patent filing and commercialization of this invention… CTT is the exclusive licensing agent for NTRU and has, in a short amount of time, been highly successful in gaining the interest and attention of major electronics, telecommunications corporations and internet and smartcard service providers.

Dr. Peter D. Holden, Senior Vice President of CTT and Project Manager for the NTRU PKCS project commented, “Though our commercialization efforts have just begun, we are extremely pleased by the response we have received so far from major industry players. The NTRU Public Key CryptoSystem, with its low processing requirements and flexible security possibilities, occupies a unique position in the emerging cryptographic market. We expect that NTRU will play an important role in providing secure electronic communications for the global marketplace of today and tomorrow.”

Competitive Technologies, Inc. — based in Fairfield, CT, with offices in Bethlehem, PA; Cleveland, OH; Osaka, Japan and London, England — is in the technology transfer business concentrating primarily on the commercialization and licensing of high-tech company and university research. CTT has evaluated over 25,000 technologies, been responsible for closing several hundred license agreements, and helped launch 15 new companies. Important CTT clients include: IBM, Bell Atlantic, Lucent Technologies, Matsushita Electric Industrial, Corning Glass, and British Broadcasting Corp. CTT also has been awarded a number of collaborative R&D contracts involving partnerships between university, industry and federal/state governments. [][1]



Fair, Isaac’s New Analysis Software

Credit grantors can now more creatively track and analyze performance data and quickly build customized reports with FastTrack Data Analysis and Reporting software, a new PC-based program from Fair, Isaac. FastTrack runs in Microsoft Windows NT and Windows 95.

“FastTrack was designed to give credit grantors a fast, powerful, and flexible approach to analysis and reporting of performance on portfolios, strategies, and scorecards,” said Bill Barnes, senior product manager for Fair, Isaac. “FastTrack offers easy data access, customization, and querying capabilities.”

FastTrack’s single-screen interface and point-and-click ease give credit grantors immediate in-depth tracking and analysis of masterfile data at both consumer and summary level. It can also track and analyze imported data, such as application data. Analysis and reports from account acquisition through account management can be developed at the user’s desktop using intuitive wizards. In addition to tracking portfolios, strategies and scorecards, the system can be used to measure account profitability, project results of future actions, uncover marketing opportunities, and identify trends in portfolios. A built-in charting facility that allows users to create presentation quality graphs is also provided.

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 such as cusotmer and operational data management and modeling, data warehousing and information analysis, strategy design, and software to businesses in financial services, direct marketing, personal lines insurance, retail health care and telecommunications. Headquartered in San Rafael, Calif., Fair, Isaac employees more than 1,200 people in 16 offices worldwide. For the fiscal year ended September 30, 1996, the company reported revenues of $148.7 million, a 31 percent increase over the prior fiscal year.