This Week In Credit Card News: Major Republican Website Hacked; Amex Battles For Mom & Pop Stores

Hacked Republican Website Skimmed Donor Credit Cards for 6 Months

A website used to fund the campaigns of Republican senators was infected with malware that for more than six months collected donors’ personal information, including full names, addresses, and credit card data. The storefront for the National Republican Senatorial Committee was one of about 5,900 e-commerce platforms recently found to be compromised by malicious skimming software. The NSRC site may have been infected from March 16 to October 5 by malware that sent donors’ credit card data to attacker-controlled domains. [Ars Technica]

a239aa7ddba04af032fd15d1fb839c7e This Week In Credit Card News: Major Republican Website Hacked; Amex Battles For Mom & Pop Stores


AmEx Takes Aim at Visa and Mastercard in Battle for Mom-and-Pops

With rivals such as Chase and its Sapphire Reserve card angling for a piece of its luxurious patch, American Express has found itself on the defensive. Now, the granddaddy of charge cards is fighting back. The first order of business has been persuading more of America’s 27.9 million small businesses to accept it as payment, eventually achieving parity with Visa and Mastercard, a goal the company says it will reach by 2019.  [Bloomberg]

Banks are Giving Away Credit Cards Like it’s 2008

Bank of America Merrill Lynch just reported strong third-quarter earnings, and buried in the earnings release was this factoid: New US consumer credit card issuance hit the highest level since 2008. The bank issued 1.3 million credit cards during the three-month period, with total credit card loans for the period averaging $88.2 billion in the US and a further $9.7 billion outside the US. There was a similar story at Citigroup, where credit card loans hit $147.8 billion, up 13% from a year ago. And at JPMorgan, a whopping 2.7 million new accounts were opened during the third quarter, sending JPMorgan’s credit card balance to $133.4 billion, up 5% from a year ago. [Business Insider]

Keep Swiping: Credit Cards Still Growing in Popularity

The plain old credit card may be winning the payments war, at least for now, a new survey finds. Credit cards were the only form of consumer payments used to pay in person that are becoming more commonly used, versus cash, debit cards, and-surprisingly-mobile phones. The percentage of people using cards weekly jumped from 50% in a survey last year to 53% this year. That contrasts to a flat 19% usage rate for mobile devices, and slight drop from 59% to 58% for debit cards. Cash was the big loser, dropping from 67% to 60%. [The Wall Street Journal]

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This Week In Credit Card News: New Micro-Loan Alternative To Credit Cards; Data Hack At Vera Bradley

Morgan Stanley Backs PayPal Co-Founder’s Lending Startup Affirm

Affirm, the online lending startup founded by PayPal co-founder Max Levchin, has raised $100 million in debt from financial services giant Morgan Stanley. The credit line comes with the news that Affirm has tripled the volume of its loans in the past year, which amounts to hundreds of millions worth of loans. Levchin is taking a slightly different approach to borrowing online, rethinking the way shoppers–particularly millennials–borrow money by letting them obtain a micro-loan at a point of sale instead of using a credit card. [Fortune]

46a94d7a20c519b80069e20478c736ed This Week In Credit Card News: New Micro Loan Alternative To Credit Cards; Data Hack At Vera Bradley

A display of handbags in the showroom at the Vera Bradley facility in Fort Wayne, Ind. (AP Photos/Michael Conroy)

Vera Bradley Notifies Customers it was Hacked

Vera Bradley, an upscale handbag and fashion retailer, said hackers apparently penetrated the company’s payment card network at its stores between July 25 and September 23. Debit and credit cards used at store locations during that time may have been compromised. Cards used for online payments were not affected. Vera Bradley said the investigation showed that hackers made unauthorized access to the company’s payment processing system and installed malware that specifically looks for credit and debit card information. The program is designed to grab the data on the card’s magnetic strip, potentially containing the card number, cardholder’s name, expiration date, and internal verification code. [Consumer Affairs]

Goldman Targets Credit Card Borrowers with New Lending Business

Goldman Sachs has launched a new online lending business that targets borrowers saddled with credit card debt. The business, called Marcus, represents Goldman’s first major foray into consumer lending as it tries to earn more from the $124 billion in deposits it has on its balance sheet. The business will focus on customers who want to manage their credit card debt. [Reuters]

Wells Fargo Chief Abruptly Steps Down

The scandal engulfing Wells Fargo toppled its chairman and chief executive on Wednesday, as John G. Stumpf announced his departure from the company, effective immediately. The move was a swift and stunning fall for an executive whose bank made it through the 2008 financial crisis relatively unscathed, only to be undone by a sham-account sales scandal that pervaded its community banking division and percolated under the surface for years. Wells Fargo’s transgressions were unusually blatant and straightforward, which contributed to the still-mounting public outcry. The bank’s misdeeds were fundamentally simple: Under intense pressure to meet aggressive sales goals, employees created sham accounts using the names–and sometimes, the actual money–of the bank’s real customers. [The New York Times]

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This Week In Credit Card News: Wells Fargo Scandal Widens; Chip Card Problems Persist One Year Later

Wells Fargo Account Scandal Extends to Small Business

Wells Fargo’s account scandal is not limited to its consumer banking sector, U.S. Senator David Vitter told the bank’s chief executive in a letter. Thousands of small business owners were also impacted by Wells Fargo’s practices, wrote Vitter, in a letter dated Sept. 29 to Wells Fargo chief executive John Stumpf and seen by Reuters. Around 10,000 small business accounts were affected by improper Wells practices, people familiar with the matter said. [Reuters]

Illinois Becomes Second State to Sanction Wells Fargo

Illinois State Treasurer Michael Frerichs announced the state would sanction Wells Fargo after learning of its fraudulent business practices. California placed sanctions against the bank last week. The State of Illinois will suspend business with the bank for at least one year. Frerichs said the move could cost Wells Fargo “tens of millions” in fees and commissions. However, Wells Fargo said the sanctions will likely cost closer to $50,000. The bank has admitted that two million accounts were opened without customers’ knowledge. Employees opened the accounts because they were under pressure to meet sales goals. Senior management allegedly knew about this fraudulent activity. []

Credit Card Giants Sued over Chip Readers

A judge is allowing small businesses to sue American Express, Discover, Visa and Mastercard for forcing them to adopt chip readers at the checkout counter, a case that could become a multi-billion-dollar class action. The lawsuit takes aim at the nationwide upgrade to chip-based credit cards, an awkward rollout that’s been annoying for stores and shoppers. To business owners, it’s a raw deal. They were forced to upgrade to expensive machines that reduce fraud but don’t eliminate it. If they don’t upgrade, they’re penalized by the credit card companies. Stores that don’t install chip readers are on the hook whenever a shopper swipes a stolen credit card — a burden previously shouldered by banks. The lawsuit, brought by four grocery stores in California, Florida and New York, calls it an industry conspiracy that violates fair trade practices. [CNN Money]

Chip-Enabled Credit Cards Mark a Bittersweet 1-year Anniversary

One year after the U.S. reached a milestone in its switch to credit cards that require a dip instead of a swipe, the ability to use such cards has dramatically increased. But potential headaches loom heading into the holiday season, with some shoppers complaining that checking out with a chip takes too long and stores continuing to encounter delays getting chip-reading terminals up and running. The pace of adoption has dramatically accelerated. As of July, 88% of MasterCard consumer credit cards in the U.S. were chip-enabled, a 105% uptick since October, while 2 million merchant locations were able to handle EMV transactions. Fraud is also down. According to Visa, counterfeit fraud at merchants able to process chip transactions dipped 47% in May, compared with that same month in 2015. But a shift that the NRF says is costing retailers $30 billion to $35 billion to implement also has its critics. [USA Today]

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This Week In Credit Card News: More Bad News For Wells Fargo; Incredible Credit Card Bonuses

California Hits Wells Fargo Where it Hurts

California Treasurer John Chiang said Wednesday the state will suspend several key banking relationships with Wells Fargo to sanction the firm following allegations of “fleecing its customers.” Serving up the first direct blow to Wells Fargo’s business following this month’s allegations of fraud at the bank, the treasurer will halt investments in Wells Fargo securities for 12 months. During that time, the state’s treasurer will also stop using Wells Fargo as a broker-dealer for buying investments and not use Wells Fargo as an underwriter for California state bonds where the treasurer assigns the role. California’s treasurer is one of the largest bond issuers in the nation. [USA Today]

Why This is the Year of the Credit Card Sign-Up Bonus

If you’ve been hearing a lot of buzz about credit cards with sign-up bonuses, there’s a good reason why. The value of initial rewards bonuses hit a record high in the third quarter of 2016, at an average of $101.48 in cash or more than 15,000 points or miles available to new applicants, according to a recent study. That’s more than a 300% increase in sign-up bonus cash and about a 120% increase in points and miles since 2010. Credit card growth has slowed in recent years as debit cards and mobile payments have risen in popularity which may be part of the reason for the large bonuses. [MarketWatch]

U.S. Supreme Court Agrees to Hear Credit Card Surcharge Fee Fight

The U.S. Supreme Court on Thursday agreed to hear a challenge to a New York state law barring retailers from imposing surcharges on customers who make purchases with a credit card rather than cash. The court will hear an appeal filed by a group of merchants to a September 2015 ruling by the New York-based 2nd U.S. Circuit Court of Appeals that upheld the law. Nine other states have similar laws. The justices took no action on two cases involving similar challenges to related laws in Florida and Texas. [Reuters]

American Express Can Stop Merchants From Steering Clients to Other Cards

American Express will be able to prevent businesses from pushing customers toward competing credit cards after all. A federal appeals court ruled that American Express could stop merchants that accept its cards from encouraging customers to use rival payment cards that charge the stores lower transaction fees. The decision is a major victory for American Express, which wants to ensure that its customers, who pay higher-than-average membership fees, do not encounter any barriers to use. The ruling means that American Express can continue to enforce provisions in its contracts with merchants that prohibit them from steering customers toward other forms of payment. [The New York Times]

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This Week In Credit Card News: How Retirees Can Control Card Debt; Visa-Walmart Showdown In Canada

3 Simple Ways Retirees Can Control Their Credit Card Debt

One of the biggest threats facing retirees’ finances is not that they’ve saved too little–it’s that they owe too much. While the average credit card debt among all U.S. households is about $5,700, that number jumps to $6,351 for those age 65 and over. A retiree’s average debt on credit cards is more than double the maximum monthly Social Security payment. So it’s not surprising that credit card debt is a huge financial concern for seniors, right behind medical bills and just ahead of paying for utilities. [CNBC]

Walmart’s Showdown with Visa in Canada Deepens

Shoppers who use Visa credit cards to pay for their purchases at some Walmart stores in Canada may be in for a shock. The chain will stop accepting Visa credit cards at its 16 stores in Manitoba province, the latest escalation in a tiff over credit card transaction fees. Although still limited to a fraction of Walmart’s vast network, the fight reflects a deepening divide over the transaction fees Visa charges in Canada, where Walmart operates more than 400 stores. The boycott started this summer with Walmart’s three stores in Thunder Bay, Ontario. [USA Today]

Prepaid Cards’ Growing Popularity Catches Regulator’s Eye

Prepaid cards, which started out as simple gift cards from retail stores, have morphed into popular financial-management tools with functions that rival bank checking accounts. Now regulators are playing catch-up, with plans to roll out a rule this fall that would bring oversight of the sector closer to regulations covering banks. The coming rule from the Consumer Financial Protection Bureau marks the federal government’s first comprehensive effort to police the market, which caters to tens of millions of Americans, many of whom are lower-income and have either no or limited access to regular bank accounts. This year, nearly $300 billion is expected to be loaded onto GPR cards, almost double the amount in 2010. [The Wall Street Journal]

Subprime Credit Card Limits Reach 5-Year High

Total credit card limits for the subprime market reached a five-year high during the first half of 2016. These limits are now at $6.4 billion for subprime and deep subprime cardholders. This follows a Federal Reserve Bank of New York survey that found nearly half of subprime borrowers now have a credit card, which is quickly approaching pre-recession levels (60%). Despite the increasing card limits and card availability for subprime borrowers-defined as those with credit scores below 620-the delinquency rates for credit cards has declined since 2011. The delinquency rates for subprime borrowers over a five-year span dropped 6%. Overall delinquency rates across all markets have declined by 43% from the second quarter of 2011 to the second quarter of 2016. []

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