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Good Afternoon! Your CardLine news for Friday,
December 29, 2006.
• REWARDS NETWORK REACHES PRELIMINARY SETTLEMENT
IN CALIFORNIA
• SMALL BUSINESS CONFIDENCE DIPS IN DECEMBER
• CANADIAN RETAILERS MUST BLOCK CARD NUMBERS
• DEBT BUYERS, COLLECTORS SPENDING MORE ON TECH
• WACHOVIA INITIATES MOBILE BANKING
• BOFA CEO LEWIS EXERCISES HIS OPTIONS FOR
CHRISTMAS
• WESTERN KENTUCKY U. USES KIOSKS TO PEDDLE
TICKETS
• BRIEFS
REWARDS NETWORK REACHES PRELIMINARY SETTLEMENT
IN CALIFORNIA: Rewards
Network Inc. last week agreed in principle to
settle a class-action lawsuit brought against it
by
California restaurants. The network, which
provides marketing and loyalty programs for
participating
restaurants, as well as discounts for member
consumers at those restaurants, will pay as much
as $28
million to settle the suit, according to the
preliminary agreement with plaintiffs. The class
action claim
was brought against Chicago-based Rewards
Network by several California-based restaurants
that
participated in the network's dining credit
purchase plan between May 2000 and December
2004.
According to the agreement, participants in the
class action will receive a combination of cash
and
airline miles worth up to $28 million. The
network will not collect any money from class
action
participants related to its dining credits
purchase plan and the network will pay all
administrative and
legal costs of the settlement. The agreement
requires approval of the U.S. District Court for
the
Central District of California, where the
complaint was filed. A spokesperson for the
Rewards Network
says the company expects a preliminary fairness
hearing to be scheduled by the court for some
time
in early 2007.
SMALL BUSINESS CONFIDENCE DIPS IN DECEMBER:
Small business owners had less confidence
in the U.S. economy in December than in
November, according to a survey conducted by
Rasmussen
Reports for Discover Financial Services. The
survey measures the attitudes of 1,000 small
business
owners by assigning values to six questions to
come up with a "small business watch" index. The
December Index was 109.7, down 4% from 114.6 in
November, Discover reports. Additionally, 64% of
the business owners say economic prospects for
their firms are the same or getting better, and
82%
say they plan to give their workers raises in
2007.
CANADIAN RETAILERS MUST BLOCK CARD NUMBERS:
Canadian retailers have assured the
country's Privacy Commissioner in written
statements that they expect the industry will
comply with a
law requiring merchants to mask complete credit
card account numbers on receipts. Under Canada's
Personal Information Protection and Electronic
Documents Act (PIPEDA), retailers may not print
a
cardholders' entire account number or card
expiration date. The law has been in effect
since 2001, but
consumers' complaints about retailers' lack of
compliance to the commission led to an
investigation,
after which merchants assured her they would
comply. "Canada's private-sector privacy law
requires
retailers to limit how much personal information
they collect and also to adequately protect that
information," Privacy Commissioner Jennifer
Stoddart said in a statement, adding that the
law is
meant to prevent credit card fraud and identity
theft. She said industry representatives have
told her
that the equipment used to electronically
process credit card payments will mask
cardholder
information. "This is an issue my office will be
keeping an eye on in the New Year," said
Stoddart. If a
consumer finds a retailer has violated PIPEDA,
he or she can file a complaint with the
commissioner,
whose office looks into the matter, says a
spokesperson. A retailer with a chronic problem
with
compliance could pay a consumer damages.
The publishers of CardLine and CardLine Europe
are proud to announce the newest edition to the CardLine family,
CardLine Asia-Pacific.
You will be able to receive the same insightful
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over 15-years.
CardLine Asia-Pacific is written especially for
the payment industry professionals with a vested
business interest in Asian-Pacific.
DEBT BUYERS, COLLECTORS SPENDING MORE ON TECH:
Technology costs jumped considerably
between 2004 and 2005 for many industry-leading
debt buyers and debt collectors surveyed by
CardLine sister publication Collections Credit
Risk magazine. NCO Financial Systems, Inc., one
of the
top three debt buyers in the U.S., reported that
it spent $10 million on technology in 2004 and
$54
million in 2005. Technology includes software,
hardware and scoring programs. Houston-based
United
Recovery System spent $6.48 million in 2004 and
$7.4 million in 2005, and Painesville,
Ohio-based
Hudson Keyes spent $200,000 in 2004 and $400,000
in 2005. St. Charles, Mo.-based collection
agency Client Services Inc. spent $3 million in
2004 and $5 million in 2005, CCR reports. The
top
collection law firms also spent significantly
more money on technology between 2004 and 2005.
One
of the top-ranked collection law firms,
Cleveland-based Weltman, Weinberg Reis, reports
that it spent
$900,000 on technology in 2004, $1.67 million in
2005 and $2.8 million in 2006. Another top
Cleveland-based collection firm Javitch, Block
and Rathbone LLC. spent $200,000 in 2004,
$300,000
in 2005 and $400,000 in 2006. Though the
companies used varying software programs, nearly
all said
they developed their own scoring programs, for
use in evaluating debt portfolios, instead of
buying a
readymade program. CCR surveyed 36 top agencies
and buyers, though not all provided information
on their technology costs.
WACHOVIA INITIATES MOBILE BANKING: Wachovia Bank
this month launched Wachovia Mobile
wireless banking, which allows online banking
customers to monitor account activity, check
balances
and transfer funds between eligible accounts.
Wachovia plans to add bill payment next year,
Ilieva
Ageenko, director of emerging applications,
tells CardLine. This initial phase of Wachovia's
mobile
banking program doesn't include payments
functionality but the bank is watching that
technology to
see how consumers respond to it. "That's a
complex emerging market. Even if we want to
support it,
[telecom firms], and merchants must be
prepared," says Ageenko. Customers must have
mobile
devices using Windows Mobile 5 with Pocket
Internet Explorer to access Wachovia Mobile.
Ageenko
says Wachovia is working to add accessibility
for Palm Pilots.
BOFA CEO LEWIS EXERCISES HIS OPTIONS FOR
CHRISTMAS: Bank of America Corp. CEO Ken
Lewis last week exercised his options for
816,000 shares of common stock. In reports filed
with the
U.S. Securities and Exchange Commission Tuesday,
Lewis disclosed that he acquired the shares for
$37.25 each and then sold 675,600 of them the
same day for $53.05 to $53.65 each. Lewis now
holds
1.7 million shares of BofA stock. Charles K.
Gifford, chairman emeritus and director, holds
778,866
shares. James H. Hance, Jr., officer and retired
vice chairman, holds 738,441 shares. Jay H.
Sarles,
officer and retired vice chairman, holds 571,852
shares. Brian T. Moynihan, president of global
wealth
management, holds 258,527 shares.
WESTERN KENTUCKY U. USES KIOSKS TO PEDDLE
TICKETS : Bowling Green, Ky.-based
technology company Hitcents and Western Kentucky
University introduced four off-campus kiosks
that
sell tickets to football and both men's and
women's basketball games. The kiosks, which
accept Visa,
MasterCard and Discover cards, are installed at
a local shopping mall, as well as grocery and
convenience stores. Hitcents CEO Clinton Mills
tells CardLine that the kiosk could spur fans to
buy
tickets on impulse. "We have a big graphic on
top of the kiosk that gets people's attention,
and when
they start playing with it they can see the
various teams' schedules and records," he says.
"It gets
people excited to the point where they might
purchase tickets to a game they might not have
known
was going on." Mills says that the kiosks are
generating interest from the National Hockey
League
Nashville Predators and other college athletic
programs.
BRIEFS: J.C. Penney Co. yesterday abruptly fired
its chief operating officer, Catherine West, the
former president of Capital One Financial
Corp.'s U.S. credit card business, after only
five months on
the job. ...A nationwide phone survey by LifeTango.com found that paying off debt is the
second
most common New Year's resolution. ...DVD rental
kiosk operator TNR Entertainment Corp.
selected IBM to develop and host its technology.
... Jeffrey M. Trachtman joined Analytic
Innovations as vice president, director of fraud
analysis. Trachtman had been with Fifth Third
Bank's Bank Card Products unit.
CardLine is published by Source Media. © 2006
CardLine and SourceMedia, Inc. All rights
reserved.
Publisher: Andrew Rowe, (312) 983-6131
Group Editor: Don Davis, (312) 983-6152
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Bob Mitchell, (312) 983-6147
CardLine
550 W. Van Buren, Suite 1110
Chicago, IL 60607
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Chief Financial Officer: William Johnston
Chief Technology Officer: Ivan Latinision
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