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Tag Archives: Prepaid Cards

News Roundup December 29, 2009 – January 28, 2010

Heartland Payment Systems

Payment card terminal maker VeriFone Holdings Inc. on Monday issued a press release trumpeting its victory in a courtroom skirmish with merchant acquirer Heartland Payment Systems Inc.

Albert Gonzalez, who in September admitted to hacking computers at TJX Co., BJ’s Wholesale Club, and Barnes & Noble, Tuesday pleaded guilty to stealing data from Heartland Payment Systems, Hannaford Brothers, 7-Eleven, and Target Co.

Details of the case reveal that prosecutors blamed Gonzalez and his partners of stealing over 130 Million credit and debit cards details by breaking into the systems of numerous retailers which include 7-Eleven Inc., the supermarket chain Hannaford Brothers Co., and Heartland Payment Systems, a New Jersey firm which processes card payments for several businesses.

Nearly a year after Heartland disclosed what turned out to be the biggest breach involving payment card data, the company remains a potent example of how compliance with industry standards is no guarantee of security

Heartland Payment Systems and Visa have announced “a settlement agreement under which issuers of Visa-branded credit and debit cards will have an opportunity to obtain a recoveryfrom Heartland with respect to losses they may have incurred from the 2008 criminal breach of Heartland’s payment system environment. Heartland will pay up to $60 million to fund the settlement program, which is subject to certain conditions, including a specified level of participation by U.S. Visa issuers. Visa will present details of the settlement to eligible issuers in the coming days.”

Three law firms representing credit unions and other card issuers with litigation pending againstHeartland Payment Systems, are urging card issuers to reconsider signing on to the offer.

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Email This Content Email This Content Posted in News Roundup. Tagged with , , . By Roxanne Hamberry - Thursday, February 4, 2010

News Roundup — December 1, 2009 to December 22, 2009

Consumer Financial Protection Agency

On December 11, 2009, the U.S. House of Representatives approved sweeping new legislation to modernize America’s financial rules in response to the current recession. HR 4173, the Wall Street Reform and Consumer Protection Act, passed by a vote of 223 to 202 and includes a comprehensive set of reforms that addresses many of the problems that the nation faces today. Among the various actions facilitated by the bill, if signed into law, the Act would create the Consumer Financial Protection Agency and establish an orderly process for shutting down large, failing financial institutions that are deemed “too big to fail”.

Broox Peterson presents a short opinion piece on HR 4173. Whether the Senate version will survive intact is anyone’s guess. An article highlighting Sen. Christopher Dodd’s (D-CT) sponsorship of the bill appeared on National Public Radio on November 10, 2009.

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Email This Content Email This Content Posted in News Roundup. Tagged with , , , , , , , , , , . By Stan Santos - Tuesday, December 22, 2009

News Roundup — October 26, 2009 to October 30, 2009

Gift Cards

The Consumer Federation of America issued a press release on October 27, 2009 in relation to a survey that demonstrates the depth of consumer misunderstanding when it comes to gift cards. According to the survey results, approximately 33% of a representative sample of slightly over 1,000 adult Americans know how much gift cards cost and only 54% are aware that “six to 12 months after purchase, some of these gift cards charge a monthly fee”. Here is related article in the Washington Post published on October 25, 2009 in relation to the rise of prepaid cards as opposed to traditional bank accounts and credit cards.

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Email This Content Email This Content Posted in News Roundup. Tagged with , , , , , , . By Stan Santos - Friday, October 30, 2009

News Roundup — October 12, 2009 to October 16, 2009

Prepaid Cards

The latest issue of Selling Prepaid E-Magazine is now online. One of the top feature articles in this month’s issue is a story on the National Branded Prepaid Card Association’s response to FinCEN’s request for public commentary on input from the prepaid card industry concerning the definition of the term “stored-value”.

According to an economic study released on October 15, 2009, consumers who opt-in regarding network branded prepaid card usage could pay as much as 70% less in fees compared to more traditional checking and debit card accounts, making prepaid cards a far more cost-effective and valuable financial tool for many.

Consumer Financial Protection Agency

Broox Peterson points out a few flaws in the current draft of the CFPA bill, HR 3126, that may have been fixed in the markup that took place during a House Financial Services Committee hearing on October 14, 2009.

Data Security

WIRED finally sheds light on a series of hacker attacks that occurred in 2005 and in 2006 on Wal-Mart.

The White House’s official blog offers this look at what Americans can do to protect their online presence.

Over on ZDNet Australia, Simon Sharwood reports how National Australia Bank is currently contemplating adding another layer of security in order to offer its customers added peace of mind.

In a move that has the potential to make it MUCH more difficult for retailers to defend themselves against civil data breach lawsuits, the judge overseeing the Hannaford data breach case has reversed himself, resulting in the involvement of the Maine Supreme Court.

Rep. Yvette Clarke (D-NY) has urged President Obama to quickly appoint a cybersecurity czar, citing concerns a wide array of online threats against the public and private sectors.

A massive click fraud ring has recently been discovered operating in China that involved 200,000 different IP addresses and racked up more than $3 million worth of fraudulent clicks across 2,000 advertisers in a two-week period. Although the ring has now dissipated (or more likely, been folded into another scam), the danger of such schemes remains.

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Email This Content Email This Content Posted in News Roundup. Tagged with , , , , , . By Stan Santos - Friday, October 16, 2009

News Roundup — September 9, 2009 to September 18, 2009

Consumer Financial Protection Agency

John Pottow has an opinion piece regarding the proposed CFPA in the Detroit Free Press. He observes that the proposed agency would help small banks relative to big banks because of reduced fixed regulatory costs and would improve the market for simple financial products that are the strong suit of small banks.

Mr. Pottow is an internationally recognized expert in the field of bankruptcy and commercial law. He is a professor of law at the University of Michigan Law School where his area of expertise concentrates on the issues involved in regulation of cross-border insolvencies. In addition, he is a frequent commentator on national and international media outlets such as NPR, CNBC, CNN, C-SPAN and the BBC.

At Reuters, Felix Salmon has the full text of President Obama’s speech at Federal Hall, delivered in New York City on September 14, 2009. His analysis can be viewed here while the Republican rejoinder is here. Over at the Wall Street Journal, Michael Corkery posted a live blog of the proceedings which you can view here.

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Email This Content Email This Content Posted in News Roundup. Tagged with , , , , , , , , , , , . By Stan Santos - Friday, September 18, 2009

News Roundup — August 24, 2009 to September 8, 2009

Prepaid Cards

On August 24, 2009, the New York Daily News published an article regarding prepaid cards and so-called “hidden costs”. Of possible interest is a quote from Kirsten Trusko, president of the Network Branded Prepaid Card Association, located towards the end of the piece that helps to balance the article’s slant against the prepaid and debit card industry.

Increasing popularity of reloadable prepaid cards, particularly among the unbanked and the underbanked, has begun to raise concerns among consumer advocates who view the cards as lacking important protections offered on bank cards. As more merchants become active in issuing these cards, advocates are lobbying for more oversight. For reference, see the recent Consumers Union report released on August 13, 2009.

The September 2009 issue of Selling Prepaid E-Magazine is now online. One article that may be of interest describes the perceived advantages of having/using prepaid cards in financial transactions over traditional methods such as paper checks, credit cards or debit cards.

An article published on September 6, 2009 in the Chicago Tribune describes how the U.S. Treasury has been campaigning to get Social Security and Supplemental Security Income recipients to switch to prepaid debit cards from paper checks.

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Email This Content Email This Content Posted in News Roundup. Tagged with , , , , , , , , , , . By Stan Santos - Tuesday, September 8, 2009

News Roundup — July 23, 2009 to July 28, 2009

Congressional Testimony

On Friday, July 24, 2009, the House Committee on Financial Services held a hearing at 10:30 am entitled “Regulatory Perspectives on the Obama Administration’s Financial Regulatory Reform Proposals — Part 2″. An archived webcast can be viewed at the linked site. Two panels of witnesses were in attendance. Panel 1 featured Timothy Geithner in his capacity as Secretary of the Treasury. Panel 2 consisted of Ben Bernanke, Sheila Bair, John Dugan, John Bowman and Joseph Smith, Jr. Mr. Dugan is the Comptroller of the Office of the Comptroller of the Currency. Mr. Bowman is the acting director at the Office of Thrift Supervision. Mr. Smith is the Commissioner of Banks of the State of North Carolina and was present on behalf of the Conference of State Bank Supervisors.

Pending Legislation

On July 23, 2009, Congressmen John Tanner (D-TN) and Sam Johnson (R-TX) as Chairman of the Subcommittee on Social Security and Ranking Member of the Subcommittee respectively, introduced legislation meant to enhance the privacy of Social Security numbers in government and private sector recrds in order to protect Social Security programs from fraud and to combat identity theft. The bill is entitled “The Social Security Number Privacy and Identity Theft Prevention Act of 2009″ and is identical to legislation unanimously reported by the Committee on Ways and Means in the 110th Congress. Here is a summary of talking points contained in the bill.

On July 23, 2009, House Republicans, led by Financial Services Committee Ranking Member Spencer Bachus (R-AL), introduced comprehensive legislation to modernize and streamline the regulatory structure of the financial services industry.

H.R. 3310, otherwise known as “The Consumer Protection and Regulatory Enhancement Act” provides for the resolution of insolvent non-bank financial institutions – no matter how large or systemically important – through the bankruptcy system. It creates a Market Stability and Capital Adequacy Board that is charged with monitoring the interactions of various sectors of the financial system, and identifying risks that could endanger the stability and soundness of the system. It establishes an Office of Consumer Protection, with enhanced authority, within a consolidated regulatory agency to streamline in one place responsibility for rulemaking and enforcement of Federal consumer protection laws. The legislation also restores the Federal Reserve’s monetary policy mandate by relieving it of current regulatory and supervisory responsibilities. Taxpayer subsidies of Fannie Mae and Freddie Mac would end, as would Federal regulators’ reliance on use of credit rating agencies.

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Email This Content Email This Content Posted in News Roundup. Tagged with , , , , , , , . By Stan Santos - Tuesday, July 28, 2009

News Roundup — July 6, 2009 to July 10, 2009

Checks and Check Cashing

An article published on FinExtra on July 8, 2009 highlighted a rising trend in fradulent activity. Several members of a New Jersey street gang have recently been arrested by authorities and accused of using laptops and digital cameras with the intention of creating counterfeit checks worth over $650,000 for a period of over two years.

Payments and Interchange

NYCE Payments Network LLC expects to begin testing Internet-based debit transactions by the end of 2009 and to commence offering a commercial service by mid-2010. The service will rely on single-use debit card technology from Verient Inc., a technology company located in San Jose, California.

A sweeping new report from a Canadian Senate committee recommends the federal government create a payment-system oversight board, ban percentage-based debit card interchange for three years, and permit merchants to surcharge for card transactions. Many of the proposals in the report are similar to the issues now working their way through the U.S. Congress.

7-Eleven Inc. has gathered between 1 million and 1.2 million signatures on in-store petitions asking Congress to regulate interchange rates, and expects to have 3 million customer signatures by the time the petition drive ends Aug. 10, according to an interview with a marketing executive with the Dallas-based convenience-store chain.

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Email This Content Email This Content Posted in News Roundup. Tagged with , , , , , , , , . By Stan Santos - Tuesday, July 14, 2009

News Roundup — June 8, 2009 to June 12, 2009

Credit Cards

Adam Levitin blogs about the overall trend in credit card line reductions and eliminations, some of which is not necessarily attributable to the Credit CARD Act of 2009.

This WaPo article examines how Capital One has decided to restructure itself as a result of the Act.

TheFinanceBuff makes an argument for more standardization of credit card contracts in light of the Credit CARD Act of 2009.

TARP

On Tuesday, June 9, 2009, the Congressional Oversight Panel released a report entitled “Stress Testing and Shoring Up Bank Capital”. The report examines the recent stress tests conducted on America’s 19 largest bank holding companies and makes recommendations as to whether the stress tests should be repeated in the future.

Data Security

A security flaw in the online payment service PayPal means sensitive information is at risk and customers could lose control of their accounts, according to this article at Stuff.co.nz.

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Email This Content Email This Content Posted in News Roundup. Tagged with , , , , , , , , , , . By Stan Santos - Tuesday, June 16, 2009

News Roundup — June 1, 2009 to June 5, 2009

Congressional Hearings

On Wednesday, June 3, 2009, Ben Bernanke testified in front of the House Budget Committee on challenges facing the American economy. You can view a related WaPo article here.

Rep. Carolyn Maloney will convene a hearing to examine the Congressional Oversight Panel’s June report to Congress, providing the panel’s assessment of the stress tests and the implications the tests have for the ongoing mission of TARP and those institutions using its resources. The hearing will be held tomorrow, June 9, 2009, at 10 am.

Congressional Reports

The House Committee on Financial Services issued a press release on Monday, June 1, 2009, with respect to the GAO’s report entitled “New Market Tax Credits: Minority Entities Are Less Successful in Obtaining Awards Than Non-Minority Entities“. The report was requested by Reps. Barney Frank, Charles Rangel, Richard Neal (D-MA) and Melvin Watt (D-NC) in connection with a hearing on minority-owned banks that took place in September 2008.

Data Security

Marshal8e6 has an alert on a phishing attack designed to mimic a Bank of America marketing campaign.

Tim Greene on Network World has a blog post that asks if cloud services can become credit card botnets. Cloud computing is a style of computing in which dynamically scalable and often virtualized resources are provided as a service over the Internet. For example, Amazon, Google and Microsoft are service providers who constitute some of the major cloud computing companies in the marketplace. A cloud application utilizes software accessible via a web browser on a user’s computer, either at home or in the workplace, thus eliminating software maintenance and customer/tech support. Examples include Skype, Facebook, Google Apps and Microsoft Online Services. For reference, Mr. Greene is a senior editor at Network World.

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Email This Content Email This Content Posted in News Roundup. Tagged with , , , , , , , , , . By Stan Santos - Monday, June 8, 2009