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Wednesday 12th November 2008. Four European banks are to pilot a new Visa card comprising a display for generating one-time numeric codes for consumers to use when transacting online or by telephone.
MBNA, a Bank of America company in the UK, Cornèr Bank in Switzerland, Cal in Israel and IW Bank in Italy will each begin pilot trials of the new card over the next few months. The Visa PIN card features an alpha-numeric display and a 12-button keypad built into the back of a conventional credit, debit or prepaid card. The card, developed using technology from Australia-based Emue technologies, promises a three-year battery life, overcoming a potential stumbling block to such schemes in the past. When used with Verified by Visa (VbV) the consumer would not need to register or remember usernames and passwords, instead they would enter their PIN into the card which creates a unique code for a specific purchase or transaction. Sandra Alzetta, SVP, head of innovation and new products at Visa Europe, comments: "The interest in this solution in the industry has been overwhelming and we look forward to working with the banks involved in the pilots to gain greater insights into how effective this solution can be in the longer term." In Switzerland, Cornèr Bank will issue the first cards to 500 VbV subscribers. Alessandro Seralvo, director at Cornèrcard comments: "Authentication is an important functionality we make available to our cardholders for the card-not-present world. Our philosophy is to offer a variety of authentication solutions, leaving each cardholder the possibility to select their preferred solution. The Visa one-time code card fully responds to this philosophy." The Verified by Visa scheme and MasterCard SecureCode programme have so far done little to inspire confidence in consumers about the safety of their card details when shopping online. Visa has promised to combat the criticism and plans to introduce a new user interface that keeps the cardholder on the merchant Web site during the authentication process, rather than redirecting users to a confusing new pop-up page for authentication. Pilots of the new process are under development and will be followed by a wider launch in 2009, says Visa. Bradley James Group
Wednesday 22nd October 2008 Bank of America, Credit Suisse and Morgan Stanley have come together to develop a new online hub for buy and sell-side institutions participating in the corporate bank loan market
The Storm Loan Marketplace will use real-time agent bank data and an array of automated matching, settlement and reconciliation tools to bring greater transparency to new issue and secondary settlement in the par and distressed markets, say the partners. It promises integrated trade matching, primary and secondary trade settlement, inventory, position reconciliation, credit documentation and other critical activities. Steve Ewald, principal, global markets group, Bank of America, says: "With the volatility we are presently experiencing in the markets and the threat of counterparty failure, certainty of settlement is crucial from a risk management perspective. The platform is a real solution that takes the loan market a long way towards accomplishing the goal of fast and certain settlement by automating what was previously an inefficient manual process." The platform - developed using technology from Quartet Financial Systems and hosted by Xand Integration - is designed for use in the United States, London and other global markets and is expected to go live in early 2009, with additional functionality to be incorporated over time. Howie Shams, managing director, fixed income department, Credit Suisse, says the introduction of an independent hub-based system opens up new possibilities for market participants. "It allows us to begin thinking seriously about the long-term benefits of such greater efficiency," he says. "Benefits that include prime brokerage capabilities for loans, repo for loan financing and even novel new strategies for loan borrowing and lending." Bradley James Group
Wednesday 15th October 2008. The World Bank's computer network has been raided by hackers on numerous occasions over the last year, putting financial data at risk, according to a report by US network Fox News.
Fox - which has obtained internal World Bank e-mails and memos
- says servers in the organisation's treasury unit were "deeply
penetrated with spyware last April". There have been at least six major intrusions over the last 12 months - the most recent in September - says Fox. Two of the intrusions came from the same group of IP addresses in China. An internal memo obtained by Fox says at least 18 servers have been compromised, five of which contained "sensitive" data. These include a security and password server and a human resources machine holding images of staff documents. According to Fox, an internal investigation found that spyware was covertly installed on workstations inside the bank's Washington headquarters - allegedly by one or more contractors from Indian IT vendor Satyam Computer Services. Fox says that since the breach, a multi-million dollar IT services contract with Satyam has not been renewed. After Fox published its story, the World Bank sent a statement admitting it was the subject of hacking attempts but insisting that no attack had accessed sensitive data. The bank says the story is "wrong and is riddled with falsehoods and errors". Fox says it stands by its report. Bradley James Group
Monday 13th October
Hundreds of Chip and PIN terminals in shops and supermarkets across Europe have been rigged by criminals gangs and used to steal shoppers' card details, according to US national counter-intelligence executive Joel Brenner. Brenner told UK broadsheet The Daily Telegraph that an international criminal gang is suspected of tampering with the Chip and PIN devices during the manufacturing process in China. The machines have been doctored and resealed perfectly - making it impossible to tell there is anything wrong with them - before being shipped to Britain, Ireland, the Netherlands, Denmark and Belgium. The terminals have copied the account details and PIN numbers of thousands of cards over the past nine months, with the data sent to fraudsters in Lahore, Pakistan, via mobile phone networks, says the Telegraph. The card details are then used to pay for Internet purchases or to make cloned cards to withdraw cash. Brenner says the scam has seen tens of millions of pounds stolen from accounts over the last few months. The Telegraph says an investigation by Mastercard is thought to have found several of the doctored terminals at British branches of supermarkets Asda and Sainsbury's. Retailers have weighed thousands of machines to find doctored machines - units which have been tampered with are slightly heavier than clean ones, says the paper. Brenner told the Telegraph the scam is so sophisticated that "previously only a nation state's intelligence service would have been capable of pulling off this type of operation". Brenner has called for Chip and PIN machine manufacturers to do more testing and to "guard that supply chain in ways that people guard the movement of jewellery". In August UK police raided a counterfeit card factory in Birmingham and seized equipment that could be used to compromise retailer Chip & PIN terminals. Two suspects were arrested and charged with conspiracy to defraud. Later that week a third man was arrested, believed to be the engineering brains behind a sophisticated programme to read and transmit customer PINs as they are entered at compromised Chip and PIN terminals in retailer check-outs. Bradley James Group
Friday 10th October 2008. The Treasury said it is urgently trying to establish what Landsbanki’s collapse means for UK wholesale creditors including at least 100 local authorities in England, Wales and Scotland who have over £800m in the bank. Police forces and transport authorities have also invested in Landsbanki. The government has guaranteed that all retail depositors in the Icelandic banks of Landsbanki (including their Icesave products), Heritable, and Kaupthing Singer and Friedlander (including their Edge products) will receive their money in full. Many of the products have been transferred to ING Direct. At the moment no guarantees have been made for the public cash. In a joint statement the government and the Local Government Authority said the councils had not been reckless. "Many public authorities have already publicly stated that any risk is not a threat to frontline services but a small number of authorities may have specific problems," said the statement. The LGA is currently analyzing the situation and help for individual local authorities will then be decided on a case by case basis. The government’s decision to freeze the assets angered the Icelandic authorities. However, it is believed a delegation of Treasury officials is travelling to the country to try and resolve the problems. Meanwhile, Glitner Bank’s parent compnay is also in "receivership" in Iceland. The Treasury is trying to establish with the Icelandic Government what this means for creditors.
Thursday 9th October 2008.
Chancellor Alistair Darling yesterday placed Kaupthing Singer & Friedlander (KSF) into administration after the Financial Services Authority (FSA) said the bank no longer met its threshold conditions. In a move designed to protect retail depositors, KSF's £2.5bn of deposits in its Kaupthing Edge internet accounts have been sold to ING Direct, owned by Dutch ING Group. The transfer of the retail deposit books has been backed by cash from HM Treasury and the FSA’s compensation scheme while the remainder of KSF’s business has been put into administration. The Treasury said: "This is the right course of action to protect savers, ensure financial stability, and safeguard the interests of the taxpayer." Following the administration order made by the High Court, Maggie Mills, Tom Burton, Alan Bloom and Patrick Brazzill of Ernst & Young were appointed as joint administrators. "Kaupthing Singer and Friedlander has not ceased to trade. The administration is necessary because of KSF’s financial position and to ensure that it can continue to operate, and to ensure the best interests of customers and creditors are served," the administrators said in a statement on KSF's website. "Whilst in administration, KSF will continue to manage its current loan book and the administrators will be seeking to find purchasers for, and will continue to manage, the remainder of KSF’s business and loan book to maximise recovery for creditors." The company’s UK investment management and capital market divisions were reported to still be operating yesterday. However, the Icelandic government was forced to nationalise Kaupthing today after the entire board of directors resigned in the wake of this week’s collapse. Bradley James Group
Tuesday 7th October 2008 The wave of financial mergers in the US will result in a shake up of the Internet banking market, but Bank of America will continue to have the most online customers, according to figures from Web metrics firm comScore.
As a result of its merger with Washington Mutual merger, Chase will add 7.4 million new online customers, making a net total of 21.4 million. Wells Fargo stands to gain 6.4 million new Web banking customers if it manages to merge with Wachovia, making a total of 17.0 million e-banking customers. Meanwhile Citi will see its total online customers base increase to 18.2 million if it merges with Wachovia. "In terms of existing online customer overlap, the Chase/WaMu and Wells Fargo/Wachovia or Citi/Wachovia mergers have surprisingly little," says Marc Trudeau, senior director, marketing solutions, comScore. But the analysis shows that BoA will continue to be the industry leader with 24.6 million online customers. This figure does not even take into account the potential increase in online bankers that would come from an eventual integration of Countrywide and Merrill Lynch. Bradley James Group
Friday 3rd October 2008
Conducted by KPMG’s governance and compliance division, the data loss barometer has found that there have been 1034 data loss incidents around the world since January 2005 with 589 of those incidents taking place since January 2007. Based on publicly disclosed cases, the study estimates that by the end of 2008 over 400 breaches will be reported, up from the figure last year. The research discovered that 280 million people had their security compromised as 80 per cent of the data loss incidents recorded caused the loss of personal details and 46 per cent of lost data was not protected. Of those people affected, 139 million disclosures related to financial information while 62 per cent were victims of three separate incidents. With much publicity surrounding security breaches involving CDs, memory sticks and laptops, the study found that 42 million people were embroiled in removable media loss incidents. It concluded that it is more likely a removable media device would be lost internally (67 per cent) than stolen by an outsider (27 per cent). Cases of PC theft and hacking were the most common type of data
loss breach, at 25 per cent and 13 per cent respectively. Bradley James Group
Wednesday 1st October 2008
According to statistics published by APACS, the trade body for the UK payments industry, total card fraud losses increased by 14 per cent in the six months to June 2008 compared with the first half of 2007. Of the total card fraud losses, more than 40 per cent was the result of fraud carried out abroad in countries yet to move to chip and pin technology. Over the past three years, there has been a 190 per cent increase in losses overseas, which now totals £121.2m. Losses from phone, internet and mail order shopping fraud also continue to rise year-on-year, increasing to £161.9m in the first half of the year and accounting for 54 per cent of all card fraud losses. "Criminals continue to target those areas where we do not currently have the security benefits of chip and PIN, causing increases in fraud abroad and phone, internet and mail order shopping fraud," said Sandra Quinn, director of communications at APACS. "Fraud abroad will be made more difficult for criminals to commit as more countries roll out chip and PIN." The figures come as a new financial crime-fighting body begins its operations today to better protect the country from fraud. The National Fraud Strategic Authority (NFSA) has been set up by the Attorney General’s Office to work with private, public and voluntary organisations in initiating, co-ordinating and communicating counter-fraud activity across the economy. It will begin by focusing on mortgage fraud, which costs at least £700m a year and is linked to the financing of organised crime and even terrorist activity. Bradley James Group
Tuesday 30th September 2008 UK payments association Apacs is warning of a rise in the number of 'money mule' recruitment adverts, where criminals attempt to lure bank account holders into illegally transferring funds across borders.
Criminals living overseas recruit mules to send them their money because most online bank accounts in the UK do not allow customers to make cross-border transfers. Mules are snared through spam e-mails, spoof Web sites, adverts on real job recruitment boards or even in national newspapers. After being recruited by the fraudsters, money mules receive funds into their accounts which they then withdraw and send overseas using a wire transfer service, minus a commission. Apacs says it detected 873 fake 'job' adverts in the first half of 2008, up 33% on last year. Sandra Quinn, director of communications, Apacs, says: "We urge consumers to be cautious about any unsolicited offers or opportunities offering the chance to make some easy money. By allowing your bank account to be used to receive and transfer funds, you will be acting illegally, even if you have had nothing to do with the actual theft of funds from another person's account." Bradley James Group
Thursday 26th September 2008
The penalty was incurred for systems and controls failings that resulted in 684 borrowers with a mortgage contract losing over £2.3m before redress was later paid to them by the firm. It is the first time the FSA has fined a mortgage lender in relation to its lending processes. The customers affected were those whose contracts were subject to a ‘retention’ clause where a sum of around £3,000 was withheld from the mortgage advance as a condition of the loan. The lender’s terms and conditions provided that these retention monies would be retained for six months, during which time the borrower would be charged interest on the full mortgage loan including the retention monies. However, GE did not make it clear to all customers that they would be charged interest on the full mortgage loan, including the retention monies, during the six month retention period. Furthermore, due to inadequate systems and procedures, retention monies and interest were not always paid out to borrowers or applied to their outstanding mortgage loan after six months when it should have been. Instead, the lender continued to charge some borrowers interest on retention monies beyond the six month retention period. Also when a mortgage with an outstanding retention was redeemed, GE was found to not always deduct the retention monies and interest from the outstanding mortgage loan, resulting in some borrowers overpaying. The FSA said the lender identified retentions faults in 2004, but despite this the failings persisted and the firm did not promptly remediate all customers. "The firm’s failings were serious because a large number of borrowers, including some with impaired or non-standard credit profiles, were put at risk of financial loss," said the FSA’s director of enforcement Margaret Cole. "The firm identified the systems and control failings in 2004, but despite internal recommendations that improvements be made, no corrective action was taken for more than two years. I emphasise that we expect high standards by lenders in their administration of their mortgage book." In a statement, the lender said it has carried out a full remediation programme and that it has reviewed its systems and processes to ensure this doesn’t happen again. "Since we reported the problem to the FSA, we have worked hard to ensure that customers affected have been fully refunded and compensated," said Colin Shave, chief executive GE Money Home Lending. "We regret the events which led to this situation and, although the number of affected borrowers was small compared to our overall customer base, we sincerely apologise to those who were affected." GE agreed to settle an early stage of the proceedings, receiving a 30 per cent reduction in penalty and averting a financial penalty of £1.6m. Bradley James Group
Wednesday 25th September 2008 After failing in its bid to force Australian customers to use PayPal, online auction house eBay is setting its sights on US users that pay by cheque and money order.
From October, cheques and money orders will no longer be allowed as payment methods on eBay in the US. Customers will have to pay via PayPal, credit or debit card, ProPay or payment upon pickup. In the frequently asked questions (FAQ) section of its Web site, eBay says it is introducing the changes to "better meet buyer expectations for a consistent, more secure checkout experience". This will benefit sellers by increasing customer confidence and "making payments faster and more reliable" claims eBay. The site also makes clear its plans to eliminate third-party checkout services, saying it will work with providers to integrate them into eBay checkout in 2009. "Ultimately, it's eBay's goal to have buyers always pay for their purchases within the secure confines of eBay", says the FAQ section. "Google's and Amazon's products and services compete with eBay on a number of levels, so we are not going to allow them on eBay." The move to restrict payments options in the US comes after eBay had to abandon plans to force Australian customers to use PayPal. In July the Australian Competition and Consumer Commission moved to revoke a notification lodged by eBay about removing other payment methods from the site. The watchdog's decision came after widespread opposition to eBay's plan, with the Australian Bankers Association and The Reserve Bank among those lodging submissions in an attempt to stop the rule change. Bradley James Group
Thursday 18th September 2008.
The combined group includes the Bank of Scotland, Halifax, Cheltenham & Gloucester and Scottish Widows brands. Lloyds TSB chairman Sir Victor Blank said the move is "a unique opportunity to accelerate and extend our strategy and create the UK’s leading financial services group". The deal came after HBOS shares suffered dramatic falls with the impact of the credit crunch – exacerbated by the turbulence this week. Lloyds TSB has historically taken an ultra-cautious approach, having shunned the sub-prime and high-risk lending that caused troubles for many of its peers. It now has the cash to support such an acquisition. Speaking exclusively to Credit Today before the announcement, Lloyds chief risk director Carol Sergeant said the bank’s focus had always been relationship banking. "In economic terms we’re a ‘through the cycle’ company. We’re not there to be opportunistic. We’re there in the good times, but also the bad," she said. "We don’t change come the weather." The deal is subject to approval by shareholders of both banks, sanction by the court and FSA approval. Dennis Stevenson, chairman of HBOS, urged shareholders to vote for the proposal. "Against this backdrop of the very high levels of volatility our industry is experiencing, the combined group will be one of the strongest players in the UK financial services sector. In addition, the combined group will have excellent brands and a very powerful franchise," he said. Bradley James Group
Friday 12th September 2008. Banks across the United Arab Emirates (UAE) are sending customers text messages urging them to change their PIN numbers following a surge in fraudulent ATM withdrawals made abroad.
Citi, Lloyds TSB, HSBC, Dubai Bank, National Bank of Abu Dhabi (NBAD) and Emirates NBD are among the banks to have contacted customers via SMS to tell them to visit ATMs and change their PIN numbers. According to local press reports hundreds of thousands of customers have been queuing at cash machines over the last couple of days to change their PINs following a jump in fraudulent transactions made from ATMs in other countries. The affected banks, along with MasterCard and Visa, are investigating the security breach but details of how criminals obtained the PIN numbers remain sketchy. Local press reports suggest data was stolen after a breach of the network that allows banks to share customer debit card information. In a statement on its Web site, HSBC says the move is in response to "an attack on our local accounts from counterfeit ATM card usage abroad". Lloyds TSB says: "Whilst only a relatively small number of our customers have been affected by fraudulent activity, the rise in instances of card related fraud across the UAE is a concern, and we urge our customers to take precautions." Lloyds TSB, Dubai Bank and NBAD have all moved to block overseas transactions on cards and say they will refund any customers hit by fraudsters. Saif Al Shehhi, senior general manager, domestic banking, NBAD, says the bank has moved to block certain transactions from overseas locations which may have caused some temporary inconvenience to customers travelling. He says no customers will be out of pocket as a result of the incident. Update Bloomberg is reporting that 42% of Dubai Bank customers have been affected by the fraud. Bradley James Group
Tuesday 9th September 2008 Plastic cards could be set to go the way of cheques and become virtually obsolete as customers take up mobile and biometric systems to pay for purchases, according to Barclaycard which is ramping up its investment in contactless payment technology. Antony Jenkins, CEO of Barclaycard - which launched the UK's first credit card in 1966 - says contactless chips have huge untapped capability, but the plastic around the chip limits its potential. "Take the plastic away and the possibilities are endless, allowing the customer to pay by using something that they are already carrying, be it a mobile, key fob or even via biometrics," says Jenkins.
Barclaycard launched its combined contactless Oyster travel and debit card, OnePulse, in London last September. By the end of the year it will have issued over one million contactless cards, with thousands of retailers accepting them. But Barclaycard is already looking beyond cards and is reported to be investing a seven-figure sum in contactless payment technology. Last year the company teamed with phone network O2, Transport for London, Nokia, Visa and TranSys, the consortium which currently runs the Oyster card system, on a six month trial of NFC mobile payments. The pilot concluded earlier this month, with nine out of ten participants saying they were happy using NFC technology on a mobile phone and 78% saying they would be interested in using contactless services if available. Barclaycard says it is also developing other 'paperless' ticketing applications that could be used in cinemas or for train journeys. Longer-term, Jenkins has outlined scenarios where customers are alerted to special offers in local stores nearby on their mobiles. Other scenarios include enabling customers to use their mobile to scan an on-shelf price label and add items to their "virtual shopping basket". They would then be able to confirm their purchase and take it away without having to go to a checkout or get a receipt "In time you won't have to carry a plastic credit card around with you if you don't want to, although some people will chose to for nostalgic reasons," says Jenkins. Bradley James Group
Friday 5th September 2008 Canadian police have arrested and charged a criminal gang which allegedly stole C$2 million by hacking the database of a Calgary-based business and loading money onto pre-paid cards.
The gang of four allegedly compromised the un-named company's computer system and loaded money onto the pre-paid debit cards before withdrawing the cash at ATMs in Canada and several other countries. Priscilla Mastrangelo, Jean Francois Ralph and Spyros Xenoulis, all from Montreal, along with Israeli Ehud Tenenbaum are charged with fraudulent use of credit card data and fraud. The gang were arrested by the Calgary Police Service Commercial Crime Unit following a seven month investigation in co-operation with the Montreal Police Service, the Vancouver Police Department and the United States Secret Service. All four individuals were arrested in Montreal and transported to Calgary to face charges. Bradley James Group
Friday 5th September 2008.
The European Commission (EC) and the European Central Bank (ECB) yesterday announced that limited fees could be permitted to help launch the SEPA Direct Debit Scheme, which aims to encourage cross-border direct debits. They said they have indicated to the European Payments Council (EPC) that they would be prepared to support the idea of a multilateral interchange fee on condition that the charges were "objectively justified and transitional". The move, which contradicts the EC's previous statements on interchange fees, highlights its concerns about the delay in rolling out a cross-border direct debit system in the singe euro payments area. While most national direct debit schemes are free, an interchange fee for national transactions exists in some EU states, notably France and Italy. Banks in these countries have been stalling on bringing in the direct debit system due to loss of revenue and have already missed one deadline. "It would not be acceptable that bankers are not able to deliver the SEPA Direct Debits by November 2009," said ECB executive board member Gertrude Tumpel-Gugerell. "A European solution has to be found by the banks which is also agreeable to the competition authorities. But SEPA Direct Debits have to be rolled out in a little more than one year from now." Recognising the stumbling block, the authorities said in order for Sepa direct debit to take off "the right incentives should be in place". They added that interchange fees can be applied for Sepa direct debit transactions "during a limited and well defined transitional phase", and that after this transitional phase all multilateral interchange fees would be scrapped. "In this respect, the idea of maintaining at national level the same interchange fee for national legacy and SEPA schemes during a limited transitional phase should facilitate the rolling out of the SEPA Direct Debit scheme," added Tumpel-Gugerell. Bradley James Group
Wednesday 3rd September 2008.
It said the European banking industry estimates that up to 41 per cent or as many as 574m cross-border commercial payments fail each year, which equates to around two million transactions each day. The average repair cost for each failed transaction is €36 (£29), putting the total bill at nearly €21bn (£17bn). SEPA aims to reduce the complexity and cost of payments by facilitating straight-through processing (STP) or end-to-end automation of transactions. Earlier this year, the European Commission published a report that estimated the potential benefits of SEPA to Europe’s banks, businesses and consumers at €123bn (£100bn) over six years. Barry Kislingbury, global product manager in payments and financial messaging at Misys, said: "Little more than a third of cross-border commercial payments are completed using STP today. Banks are left with the cost of putting these payments back on track – costs they are unable to pass on to customers. With global trade volumes continuing to hit double-digit growth each year, the problem is only going to get worse." Cross-border payment failures are caused by a number of factors including weak payment initiation controls, poor monitoring of processes and problems during clearing and settlement. One of the prime causes is missing or incorrect reference data, responsible for 30 per cent of all failures according to SWIFT. Bradley James Group
Friday 29th August 2008. Two former workers at an Abbey branch in London managed to steal more than £120,000 from cash machines by stuffing wads of notes down their trousers.
According to press reports, the scam took place at Abbey's branch in Hammersmith where assistant manager Simeon Andrews, 24 and personal banker James Hollywood, also 24, stole money from ATMs between January 2007 and June 2008. After taking wads of cash from the machines the pair would sneak off to the toilets and split the proceeds. The amounts stolen each time ranged from £500 to £10,000. They were caught when bank investigators installed hidden cameras by two of the cash machines. Pamela Reiss, prosecuting, told the court that the footage shows the two men stealing and at one point "money was being stuffed down trousers". Both men have pleaded guilty to conspiracy to steal and have been remanded in custody until sentencing. In a separate incident, two security guards had to be rescued by fire crews after becoming trapped in an ATM they were re-filling in Erdington, near Birmingham. Reports say that while the pair were re-filling the cash machine, the door of the ATM swung shut and locked them both inside the unit. Fire crews used heavy-duty cutting equipment to take off the door and free the men Bradley James Group
Friday 15thy August 2008.
Jane Moriarty and Myles Halley of KPMG Restructuring, who were appointed on 4 August, said 55 of the 73 staff have been made redundant. The remaining staff will be retained for a short period to ensure that couples who have stock allocated to them in the warehouse will receive some of their gifts. In addition, the company and administrators will continue to operate the helpline for the time being to deal with queries from couples, the majority of whom will not now receive any of their gifts. Halley said: "At this stage, we do not consider funds will be available for distribution to unsecured creditors." Until the administrators’ report is published within the next eight weeks, KPMG would not comment on the reasons for the group’s demise. Wrapit has publicly blamed its main creditor HSBC, which provided credit card processing facilities and is owed around £3.5m, for causing its collapse by withholding credit and debit card income. HSBC has denied any liability for the firm’s closure and said it acted appropriately at all times. "HSBC refutes any suggestion that it was responsible for the company’s failure. HSBC believes it has done all it can over recent months to assist the directors," the bank said in a statement. "The company directors have made several statements and suggestions for a resolution for outstanding orders, none of which HSBC considers appropriate or practical. HSBC's view is that this should never have happened and had the directors acted sooner to address their financial difficulties and appointed administrators when HSBC recommended, it may not have." Bradley James Group
Wednesday 13th August 2008 Officers from the UK's Dedicated Cheque and Plastic Crime Unit (DCPCU) have raided a counterfeit card factory in Birmingham and seized equipment that could be used to compromise retailer Chip & PIN terminals.
Two suspects have been arrested and charged with conspiracy to
defraud. Bradley James Group
Friday 8th August 2008 US authorities have indicted an international criminal gang thought to be responsible for the theft and sale of over 40 million credit and debit card numbers that were hacked from the computer systems of nine major US retailers, including TJX.
In what is believed to be the largest hacking and ID theft case
ever prosecuted by the Department of Justice (DoJ), three US citizens,
one man from Estonia, three from Ukraine, two from China and one
from Belarus, as well as another individual who is only known by
an online alias, have been charged with numerous counts of fraud
and ID theft. Bradley James Group
Tuesday 5th August 2008 A bank comparison Web site has been launched in the US that enables consumers to post reviews and recommendations on a range of personal banking products and services.
Bradley James Group
Wednesday 30th July 2008. UK banks have been hit by record levels of fraud over the last six months and the situation is likely to get worse as the full impact of the credit crunch unfolds, according to accountancy firm KPMG.
According to KPMG Forensic's Fraud Barometer, over £630
million worth of fraud came to court across 128 cases in the first
half of 2008, up from £421 million in 91 cases during the
previous six month period. Bradley James Group
Monday 21st July 2008. Despite the economic gloom, UK online shopping sales in the first half of 2008 were up 38% - to £26.5 billion - on the same period the previous year.
Figures from IMRG, Capgemini and the British Retail Consortium
show 17 pence in every pound spent by Brits during the period was
online. This is around half of the amount spent in supermarkets
and more than the total spend for all retail sales of clothing and
footwear. Bradley James Group
Monday 14th July 2008
When looking at fraudulent applications across all product types, the number of confirmed frauds recorded by CIFAS showed that the concentration is focused within the M25 catchment area. The most commonly appearing postal district was E6, which covers Eastham, followed by Croydon and then Peckham. In fact, six of the top ten fraud hotspots were in and around the East London area while the top ten mortgage and credit card fraud hotspots all fall within the M25. "Although it is not unexpected that fraud should be at its most prevalent in cities, it is remarkable that almost all fraudulent activity is concentrated in and around London," said CIFAS research manager Sandra Peaston. "Many elements conspire to make this the hub of activity for fraudsters, not least because they may feel that the population density affords anonymity. It is also true to say that London is a city of stark contrast where extraordinarily wealthy and socially disadvantaged people often live in close proximity. This can both provoke and help to facilitate fraudulent behaviour." Kate Beddington-Brown, head of communications at CIFAS, added: "Being the UK’s main financial centre also provides obvious incentives and, for mortgage fraud at least, the fraudster has naturally gravitated to the location that offers the richest pickings because property prices are higher than elsewhere. Add to this the growing financial hardship caused by the ‘credit crunch’ and you have a dangerous and potent mix." Bradley James Group
Thursday 10th July 2008
Bradley James Group
Thursday 3rd July 2008. Bradley James Group
A recent study reported that the number of underinsured adults
has increased 60 percent in just four years.
Monday 3oth June 2008.
Bradley James Group
Wednesday 25th June 2008.
The suit, which was filed against Visa, MasterCard and eight major
banks in November 2004, sought damages for business lost as a result
of alleged anti-competitive business practices. At the time American
Express said those practices had effectively locked it out of the
bank-issued card business in the US.
Monday 23rd June 2008. Bradley James Group
Friday 13th June 2008.
The 3rd Man says it spotted a flaw with the address verification system (AVS), which is used by credit card companies and banks to verify the identity of cardholders, when monitoring transactions for a retailer. AVS - popular with e-commerce outfits - checks the billing address of the credit card with the one on file, matching the house number and postcode for each card issued. But the 3rd Man says crooks are now finding alternative addresses that have the same house number and digits in a different post code, tricking AVS into thinking it is the same place. By using compromised cards and address details fraudsters can virtually guarantee that the retailer has no realistic way of verifying the information, says The 3rd Man, so goods are shipped straight to the criminal's door. The vendor says fraudsters can take advantage of this crack in security to safely use card details stolen in database hacks like the recent attack on UK retailer Cotton Traders. "This is a serious problem, one that fraudsters have not only cottoned onto but are exploiting in significant volume. Retailers relying on AVS, or where a retailer will only deliver to the billing address, are facing a potentially huge risk," says Andrew Goodwill, director, the 3rd Man. Figures from payments association Apacs show that card-not-present fraud (CNP) rose by 37% to £290.5 million during 2007 and now accounts for more than half of all industry losses from card fraud. However, Apacs argues that CNP losses have to be seen in context of the huge rise in the number of people shopping online and over the phone. Apacs says CNP fraud losses rose by 122% between 2001 and 2006, but over the same period the total value of online shopping transactions increased by 358% - from £6.6 billion in 2001 to £30.2 billion in 2006. Bradley James Group
Thursday 12th June 2008.
Speaking at the British Bankers’ Association’s annual conference, Stephen Green, group chairman of HSBC (pictured), said that banks previously over reliant on securitisation and wholesale funding in particular will have to rethink their business approach due to the current liquidity crisis. "The model of profit from increased leverage has gone," he said. "This is not just the end of a bubble; it’s the end of a model." He added that this would serve as a reminder of the basics and a return to good old-fashioned practices recognising the importance of the customer. This was reiterated by Eric Daniels, chief executive of Lloyds TSB, who said that there is a clear renaissance of branch networks under way as banks move to create financial centres for customer service. John Varley, chief executive of Barclays, agreed the climate is rapidly shifting and that banks need to have the right business model in place to give the best return. However, he objected to a return to good old-fashioned models as out of date with today’s needs. "I recognise the immense political pressure being directed at the supervisory system around what’s happened over the course of the last 12 months," he said. "What I am wary about is overreaction. This industry thrives on innovation and creativity and it is incredibly important that the creative juices of the global financial services industry are not caused to evaporate due to a plague of regulation," he added. The impact of increased regulation was a hot topic at the conference as FSA chairman and economic secretary to the Treasury Kitty Usher outlined regulatory reforms to ensure another Northern Rock situation doesn’t happen again. This included plans by the FSA to overhaul the regulation of banks’ liquidity requirements ahead of a decision from the Basel Committee – charged with outlining the global framework for banking regulators – on how to best respond to the liquidity crisis. Bank of England governor Mervyn King also told delegates that plans were being considered to make permanent the Bank’s special liquidity scheme launched earlier in the year. But he added that this was not to be seen as an incentive by banks to take on more risk and continue reckless lending. "If banks feel they must keep on dancing while the music is playing and that at the end of the party the central bank will make sure everyone gets home safely, then over time the parties will become wilder and wilder," he said. "That might not matter were the consequences limited to the party-goers. But they are not. When the party ends, some innocent bystanders may lose their homes altogether." Bradley James Group
Friday 6th June 2008. MasterCard and Visa have come under more pressure over interchange fees after US senator Dick Durbin introduced a bill that would give retailers and merchants the power to negotiate to reduce charges for card transactions.
Durbin says his Credit Card Fair Fee Act of 2008 would "safeguard
consumers and retailers by preventing credit card companies from
using their market power to charge unfair fees through an unfair
process". Durbin's bill is almost identical to a House version
introduced by US House Judiciary Committee chairman John Conyers
in March. "We welcome this effort to stop the price-fixing and create
a transparent market-based process for credit card interchange fees,"
adds Hank Armour, chairman and CEO of the National Association of
Convenience Stores (NACS). "This legislation is an approach
to fix the broken system through a competitive market outcome by
allowing merchants a seat at the negotiating table." Bradley James Group
Wednesday 4th June 2008.
While half of the respondents from the UK (46 per cent) have already been affected by the credit crisis, 62 per cent believe that they will be more greatly impacted in the future. To add to the bleak outlook, over half (53 per cent) have experienced tightening in the availability of financing and one third believe this is likely to restrict growth. "The UK has been reliant on the financial and property sectors for much of its growth, which have been particularly badly affected by the credit crunch," said Shaun Purrington, regional director of Atradius’ commercial division for UK and Ireland. "As these industries slow, we would need a significant pick up in other sectors to bolster the economy and the belief that this will not happen is fuelling the UK business community’s pessimistic outlook." The survey also found that 73 per cent of UK firms believe an increase in payment defaults by customers will have the most significant impact on them, while the ability to increase sales and extend credit to customers remain significant concerns. "Atradius started seeing the ripple effects of the credit crisis on global economies in the fourth quarter of 2007. Since then, suppliers have been extending credit terms in an effort to maintain sales momentum," Purrington added. "However, recently we have seen an increase in claims for bad debt and as the level of unpaid invoices grow, businesses are likely to become far more restrictive in the terms they offer." Bradley James Group
Tuesday 3rd June 2008. |
