LowCards.com Weekly Credit Card Update–July 15, 2016
Nearly 1 in 3 Consumers Victimized by Card Fraud
Thirty percent of consumers globally have experienced card fraud in the past five years. Card fraud rates–unauthorized activity on three types of payment cards (debit, credit and prepaid)–is on the rise worldwide. Mexico leads as the top country experiencing the most card fraud at 56%, followed by Brazil at 49% and the U.S. at 47%. In 2014, the U.A.E, China, India and the U.S. topped the list. The U.S. is the only country to remain within the top three both years, due in part to being a laggard in the roll-out of EMV chip cards, with skimming and data breaches continuing to be security challenges. European countries experience less card fraud than countries in the Americas, due to earlier adoption of EMV (chip and PIN) and other security advancements. Story in NACS Online.
American Airlines to Renew Credit Card Deals With Citigroup, Barclays Unit
American Airlines said it is renewing credit card relationships with Citigroup and Barclaycard, taking the unusual step of sticking with two card issuers following a big merger. The deal calls for Citi, which has been American’s partner for three decades, to offer its co-branded airline cards to new customers through mobile channels like American’s website, direct mail and airport lounges. Citi also recently became the co-brand partner for Costco Wholesale Corp., which ended a 16-year relationship with American Express. As part of the deal, Citi will give up the ability at the end of the year to offer its cards to new American Airlines customers in airports and on American flights. That right will shift to Barclaycard, a unit of British bank Barclays, which was the co-brand card issuer for US Airways. Story by Robin Sidel and Susan Carey for The Wall Street Journal.
Unbanked Consumers Use Reloadable Debit Cards as Bank Accounts
A greater number of people are using reloadable debit cards in place of their checking accounts, according to a Pew research study. Nearly 23 million adults are using prepaid cards regularly, and many of these consumers are unbanked. Since they don’t have traditional bank accounts, they use reloadable debit cards like a checking account. General purpose reloadable (GPR) prepaid cards, or GPR prepaid accounts, let consumers add funds to their account via direct deposit or cash deposits. From there, they can withdraw the funds from ATMs or make purchases wherever credit cards are accepted. Story by Bill Hardekopf for LowCards.com.
MasterCard Ordered to Pay Sainsbury Millions in Card Fees Case
MasterCard was ordered to pay U.K. supermarket chain J Sainsbury 68.6 million pounds ($90.8 million) because fees it passed on to the grocer were too high, a London judge ruled. The lawsuit concerned interchange fees that are charged when credit or debit cards are used. The lawsuit alleged that the default fees set up by MasterCard were too high. The judge agreed, writing that merchants have little options except to accept cards from all card issuers, leaving MasterCard with the power to set unilateral rates that are higher than they would otherwise be if MasterCard had negotiated. Story by Austen Hufford for The Wall Street Journal.
Omni Hotels Announces Data Breach of 50,000 Credit, Debit Cards
Dallas-based Omni Hotels & Resorts says it was the victim of a malware attack and data breach that impacted more than 50,000 customer credit and debit cards at 49 of the chain’s 60 locations. The data breach was detected on May 30. The company said it did not notify consumers until it had worked with an IT security company to fix the problem. Several forms of personal payment information were taken during the malware attack, including credit and debit card numbers, cardholder names, security codes and expiration dates. Debit card PINs and customer contact information was not revealed during the breach. Story by Karen Robinson-Jacobs for the Dallas Morning News.
London’s Contactless Tube Payment System is Going Global
The contactless payment system used on London’s transport network will soon be modified for use in other cities. A deal between Transport for London (TfL) and transportation firm Cubic will see the latter adapt the contactless ticking system and license it around the world. The deal, worth up to £15 million, will help TfL ensure fares don’t rise for the next four years. Cubic will be given access to London’s contactless system to allow it to tailor it to other transportation networks. The company first worked with TfL in 2003 to develop the technology behind Oyster and has since helped upgrade the system to support contactless payments from debit cards, Apple Pay and Android Pay. Story by James Temperton for Wired.
Santander Bank Fined $10 Million for Illegal Overdraft Fees
The Consumer Financial Protection Bureau ordered Boston-headquartered Santander Bank to pay $10 million, claiming the regional bank deceptively marketed its overdraft program to customers. According to the consumer protection agency, from 2010 to 2014, the bank employed telemarketers to sell its “account protector” service, which authorized Santander to pay out ATM transactions and one-time debit card purchases, even if they overdraw the account, and then charge a $35 overdraft fee on each transaction. The bank rewarded these sales reps with higher hourly rates when they met sales quotas. But the CFPB found the telemarketers improperly signed up customers for the service without their consent, as well as misled others that the service was free. Story by Megan Leonhardt for Time.
MasterCard Has a New Logo
MasterCard is getting a makeover. The company unveiled a new logo Thursday that simplifies the brand for consumers and merchants. Created out of Pentagram, the new design includes red and yellow interlocking circles; the word “mastercard” can be positioned below or to the side, rather than to the top, and capital letters have been omitted to de-emphasize “card” and play up the brand’s image as an omnipresent brand. The company name is also written in a more contemporary font. Story by Adrianne Pasquarelli for Creativity Online.
UniRush, Owner of RushCard, Names Ron Hynes Chief
Trying to put a turbulent nine months behind it, the parent of the prepaid debit card company RushCard is replacing its chief executive. Ron Hynes, a former head of global prepaid solutions at MasterCard and most recently president of global markets at the digital wallet start-up Mozido, is taking over for Richard Savard, who had been UniRush’s chairman and chief executive since early 2014. Story by Liz Moyer for The New York Times.
LowCards.com Weekly Credit Card Rate Report
Based on the 1,000+ cards in the LowCards.com Complete Credit Card Index, the average advertised APR for credit cards is 14.66 percent, slightly lower than last week’s average of 14.68 percent. Six months ago, the average was 14.89 percent. One year ago, the average was 14.65 percent.