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« June 19, 2005 - June 25, 2005 | Main | July 3, 2005 - July 9, 2005 »

July 02, 2005

The Next Heavyweight Champion of Banks

Julie Creswell reports for the New York Times on the battle of the big banks: Citigroup vs. Bank of America.

"Citigroup has been so traumatized by the events of the last five years that it is no more the wild-eyed risk taker," said Richard X. Bove, an analyst at Punk Ziegel & Company.

"We're seeing one company shrink while the other expands. It's only a matter of time before Bank of America is bigger than Citigroup."

MBNA Merger Would Leave Capital One in Unique Position

Dean Starkman reports for the Washington Post on Capital One's position as the "only remaining company whose main business is marketing and issuing credit cards."

Its future, analysts say, depends on how well it can achieve growth in its new businesses, particularly auto loans, as the credit card business sags under a saturated market and financially stretched consumers.

Don't Let Data Theft Happen to You

M.P. Dunleavey reports for the New York Times on a personal experience with debit card data theft.

Unfortunately, although there are steps you can take to protect yourself - and you should - there are no guarantees. "You cannot protect yourself completely," said Edmund Mierzwinski, consumer program director at the U.S. Public Interest Research Group in Washington. "The best thing you can do is react swiftly if it does happen."

July 01, 2005

OCC Issues New Guidance to Banks re: Web Site Spoofing Incidents

The Office of the Comproller of the Currency (OCC) today issued new guidance to banks on how to respond to incidents of web site spoofing incidents.

The bulletin addresses procedures banks can implement to mitigate the risks to themselves and their customers by detecting and responding to Web- site spoofing. It also identifies the types of information banks can provide to law enforcement authorities to assist in investigating illegal activities.

MBNA Sale Fuels Job Fears In Delaware

Ted Griffith reports for the Wilmington, DE News Journal on the potential implications of MBNA's acquisition by Bank of America regarding jobs in Delaware.

The buyout will have a major impact on Delaware's economy and its charitable agencies. Wilmington-based MBNA is the state's largest private employer, with 10,500 Delaware workers, and the credit card company has long been one of the leading donors in the state.

This Credit Union Doesn't Wait To Replace Exposed Cards

Robin Sidel reports for the Wall St. Journal on the reaction of the Pennsylvania State Employees Credit Union to card data security compromises.

So far, PSECU has replaced more than half of the 7,300 cards. Mr. Smith and his staff have started to calculate the costs of the replacement effort. "This is nothing but pure expense and staff drain to us," he says. He plans to send the bill to CardSystems.

Wachovia, Suntrust Blindsided

Peralte Paul writes for the Atlanta Journal-Constitution about the implications of the MBNA acquisition for Wachovia and SunTrust, both of whom have card issuance deals with MBNA.

"Those banks sold their credit card businesses to MBNA because MBNA was a non-bank," David Robertson, published of the Nilson Report said.

"Now when you have a bank that competes with you in consumer deposit accounts, it's a very different dynamic."

Swiping Back At Credit-Card Fraud

Business Week looks at credit card fraud associated with online purchases.

Internet fraud is clearly a challenge that e-tailers can't afford to ignore. With fraud rates that are far higher than those of traditional retailers, they will have to put more muscle into their fight than many seem willing to do at the moment.

June 30, 2005

Glenbrook Announces Summer/Fall Executive Payments Boot Camp Series

Glenbrook has announced a new series of executive payments workshops.

Following a successful initial workshop series this spring, technology executives, venture investors, and product and business development managers from financial services companies all told us to "keep 'em coming", said Carol Coye Benson of Glenbrook.

The new series includes workshops on the U.S. payments landscape, on authentication in financial services, and on consumer payments in China.

Glenbrook's summer and fall series workshops will be held on both the East and the West Coasts and are now open for registration.

Wachovia Left Out In The Cold?

Liz Moyer writes for Forbes.com on today's annouced acquisition of MBNA by Bank of America.

It wouldn't be the first time Wachovia lost out to Bank of America. Last year, Bank of America acquired Boston-based FleetBoston Financial, once seen as a near-perfect fit for Wachovia.

Andrew Ross Sorkin writes for the New York Times filling in more details, namely that Wachovia's board had failed to approve the acquisition of MBNA after the deal had been negotiated between the two companies' management teams.

The ABCs of Credit Reports

Robert Bruss reports for the Boston Globe on his experience with getting current credit reports and FICO scores from the three major credit bureaus.

READ MORE »

Bank of America to Acquire MBNA

Bank of America Corporation today announced a definitive agreement to acquire MBNA for $35 billion in cash and stock. Based upon Bank of America's current price, the deal values MBNA shares at about a 30 percent premium to MBNA's closing price yesterday.

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Weakness in the Data Chain

Eric Dash reports for the New York Times on the vulnerabilities of the payment system and, in particular, the recent card data security breach at CardSystems Solutions.

And if CardSystems could have its data compromised, might it happen to another processor elsewhere? Industry experts say the likely answer is yes, given how lax Visa and MasterCard have been about enforcing rules with suspensions or fines. Visa and MasterCard maintain that their standards are rigorous, but they need to allow the processor companies time to upgrade systems.

June 29, 2005

BJ’s and DSW Cases Open a New Front in the War on Data Insecurity

Charles Kenney and Kristina Hickerson of law firm Morrison and Foerster write about two recent data security cases: BJ's Wholesale Club and shoe retailer DSW.

What is noteworthy is that for the first time, the FTC has acted against a company that gave no assurances to the public concerning its handling of customer information. After the BJ’s case, companies that say nothing about their data security practices are just as vulnerable to enforcement actions as those that do. This marks an aggressive shift in the FTC’s enforcement strategy and raises the bar for companies that store and handle customer information.

Open Prepaid Market Performance

Mercator Advisory Group has published the first of three planned reports on prepaid products, the first one by Tim Sloane focusing on open prepaid solutions.

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Latest FDIC Findings on Identity Theft Suggest Need for New Safeguards for Internet Banking

The FDIC has announced new findings regarding identity theft associated with Internet banking in an update to an earlier study issued last December.

"Identity theft, particularly account hijacking, continues to grow as a problem for the financial services industry and for consumers," said FDIC Chairman Don Powell.

"Our review illustrates that ID theft is evolving in more complicated ways and that more can and should be done to make online banking more secure."

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Financial Institutions Must Take More Holistic Approach to Combating Fraud

TowerGroup this morning reported on new research regarding enterprise fraud management in financial services firms - asserting that while many financial institutions fight fraud effectively in certain areas of their business, many do so poorly - if at all - across their full spectrum of products and services.

READ MORE »

Today's Headline News - Wednesday, June 29, 2005

Note: This posting is updated regularly throughout the day.

June 28, 2005

State Attorneys General Seek Answers Over Data Breach

Matt Gouras reports for the Associated Press on a terse letter sent today to CardSystems Solutions, Inc. from the attorneys general of 44 states.

"It is the responsibility of CardSystems Solutions, Inc. to make sure the public is aware of this security breach ... and to take the appropriate action to make sure it doesn't happen again," said Tennessee Attorney General Paul Summers. The letter called the company's action "unacceptable."

Americans Face Another Transaction Fee Overseas

Kelly Spors reports for the Wall St. Journal on yet another fee that Americans traveling abroad may encounter when using their credit and debit cards for purchases.

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Class Action Lawsuit Filed Over CardSystems Data Security Breach

San Rafael, CA-based Rothken Law Firm has announced the filing of a class action lawsuit in San Francisco Superior Court against Cardsystems Solutions, Merrick Bank, Visa and MasterCard.

Joris Evers reports on the story for ZDNet News.

READ MORE »

June 27, 2005

Chase's blink Card: A Denver Field Test Report

Update: See this blink Denver update posted Friday, August 12, 2005.


A very good friend of Glenbrook's, Linda Elliott, lives in the Denver area and just got her very own Chase blink card in the mail. She's just finished writing up part one of a report on her first day's experiences with that blink card in her hands. Great stuff - enjoy!

READ MORE »

Primary Payment Systems' Early Warning Fraud Assessment Now Covers an Estimated 90 Percent of All U.S. Transaction Accounts

First Data Corp. has announced that its Primary Payments Systems (PPS) affiliate now covers an estimated 90 percent of all open and active US transaction accounts.

The near total coverage is expected to help save U.S. financial institutions an additional $100 million or more in fraud losses this year. Powered by the databases, the Early Warning deposit and payment risk assessment services help prevent fraud-related losses by notifying users of high-risk deposits and payments via transaction accounts, such as checking, demand deposit, negotiable order of withdrawal, automatic transfer service and credit union share draft accounts. The databases, which are used exclusively for fraud prevention, receive daily updates with non-public secure information regarding accounts, transactions and identities.

First Credit Line Available to Owners of Health Savings Accounts

MedDirect Health Benefits, a provider of financing to patients seeking affordable ways to pay for healthcare procedures, has announced a strategic partnership with 1Point Solutions, a third party administrator in Dickson, Tennessee.

"MedDirect HSA Plus" offers a full range of other services necessary to administer HSAs.

Central to "MedDirect HSA Plus" is a savings account established with Bancorp Bank that offers superior interest rates, mutual funds and FDIC/SIPC protection, as well as overdraft protection offered through the MedDirect Bridge Line. This overdraft protection is an employer-sponsored benefit, and is available to all employees regardless of their creditworthiness.

The partnership with 1Point Solutions helps to enhance a key element of "MedDirect HSA Plus" - the Bridge Card, a smart debit MasterCard that can be used at the point-of-sale by subscribers for all HSA-eligible expenses.

A presentation on MedDirect HSA Plus (PPT) is available for downloading from the company's website.

What Chinese Consumers Want From Banks

Matthias Bekier and Kenny Lam write for the McKinsey Quarterly on what Chinese consumers want from their banks.

While Chinese consumers indicate some willingness to use foreign banks, their preference for local ones is stronger than ever: 78 percent of respondents say that doing business with local institutions is important to them, up from 66 percent in 1999.

Los Angeles Firemen's Credit Union Launches CashEdge's Instant Account Opening and New Account Funding Solutions

CashEdge announced this morning that the Los Angeles Firemen's Credit Union, a credit union serving firefighters and their families in the state of California, is using CashEdge's OpenNow and FundNow services. OpenNow/FundNow enables prospective credit union members to securely open and fund a new account in real-time through the credit union's website.

Approximately 95 percent of new online account applicants drop out between enrollment and funding. By offering a single-session solution, CashEdge enables financial institutions to increase dramatically account completion rates among this valuable member-base. Online members are particularly attractive because they are less costly to acquire and more profitable, maintaining higher account balances, utilizing more services and exhibiting higher overall account activity.

Today's Headline News - Monday, June 27, 2005

Note: This posting is updated regularly throughout the day.

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