The Federal Trade Commission filed a complaint and settlement order against debit card company VirtualWorks LLC and its marketing partner for misleading consumers into purchasing prepaid cards. In lieu of the $5.5 million suspended judgment, the company's owner must pay $52,000.
Furthermore, the defendants and their principles are barred from misrepresenting the cost of any product or service, the method for charging consumers and any other material fact. In addition, they may not state a product or service is free or a bonus without disclosing all material terms and conditions.
The FTC alleged VirtualWorks, in collusion with Swish Marketing Inc., duped thousands of consumers applying for payday loans online into incurring charges of up to $54.95 for zero balance prepaid cards.
According to the FTC, the affiliate offers displayed during the application process had small yes and no buttons. The offer for the debit card was the only one defaulted to yes. No other mention of the purchase of the card was made beyond that point to consumers who accidentally chose the highlighted no button. The companies were also accused of leading loan applicants to believe debit cards were a free bonus.
The Prepaid Press Expo 2009, which was held in Las Vegas in August, experienced a 35 percent increase in attendance over last year, with more than 1,500 attendees. This year's event featured 50 exhibitors, 12 corporate sponsors and nine media partners.
Professionals from the prepaid calling card, wireless, and gift and debit card industries took advantage of the opportunity to meet with their peers, retailers, distributors and other players in the prepaid industry.
This was only the second year for this event. The show's producer, Robin Tobias, said, "We are thrilled with our recent turnout and are eager to start planning for tppExpo 2010. Our goal is to provide the best possible forum for prepaid service providers, and [we] look forward to adapting and improving our event to meet the needs of the dynamic industry."
InComm added Smart GiftCard Solutions, a business-to-business (B2B) platform, to its product line. "Now, more than ever, we hear from clients that prepaid products are the most practical and appropriate selection when choosing rewards or gifts for their employees or customers," said Jonathan Price, Vice President, B2B for InComm.
Emida Technologies Inc. released multiple new and enhanced products and services in its Emida Unleashed offering, which includes three new and two enhanced products and services: VeriFone POSA microbrowser access, enhanced PC terminal access, "Prepaid Prepaid," money transfer and M-MONI.
nFinanSe Inc. will offer Visa prepaid cards as part of its nFinanSe suite of managed card products. The general purpose, reloadable prepaid cards, issued by Palm Desert National Bank, will be available in the fall of 2009 through distributor channels and direct sales.
Ligatt Security International launched what it said is the first and only card that combines numerous anti-cyber-crime services in a prepaid card. The reusable Cyber Crime Defense Card can be obtained for free. Consumers then load the card and use it like any other prepaid card. The company is offering packages of various sizes to help dealers market the cards.
SmartClixx LLC has now processed over 1 billion transactions with its software products. SmartClixx's statistical analysis estimated the company has saved its e-commerce clients more than $100 million to date. SmartClixx's closed-loop gift card and stored-value card platform solution has been eliminating the processing middlemen and their associated fees. The company celebrated its ninth anniversary this year.
Aentra LLC and edo Interactive Inc. teamed up to develop and manage a gift-giving Prepaid MasterCard Worldwide program. The edo Interactive Marketing Platform uses consumer behavioral targeting. Aentra offers customized reloadable cards targeted for weddings, baby showers, and bar and bat mitzvahs.
NetSpend Corp. entered into a distributor agreement with Check City Inc., a check cashing and payday loan provider. The agreement names NetSpend the 70-location, check-advance chain's exclusive prepaid debit card provider.
In other news, NetSpend will use Orchestra Networks' EBX.Platform software for its master data management needs. "EBX.Platform is a key part of our strategy to build a foundation of capabilities to support our ever growing scale and complexity of customer needs," said James DeVoglaer, Senior Vice President and Chief Information Officer for NetSpend.
To provide more ways for consumers to reload, PreCash Inc. and its processor Galileo Processing Inc. are using Green Dot MoneyPak. Through the partnership with Green Dot, PreCash cardholders can reportedly load cash onto their prepaid debit cards at 50,000 additional retailers nationwide.
RTG Ventures Inc. signed a letter of intent to purchase the intellectual property rights for iPAYU, and the right to operate its business, from International Financial Systems Ltd. This will be added to RTGV's existing payment systems, epaypoint and Web-Pay. iPAYU is a mobile payment method used for person-to-person, person-to-business and B2B payments.
Travelex Currency Services Inc. tapped Jonathan Bennett to serve as the company's Head of Corporate Outsourcing for all of North America. One of his primary objectives will be to take Travelex's Corporate Cash Passport, which provides currency in the form of prepaid travel cards to global consumers, to the next level in the global market.
With Corporate Cash Passport, funds can be moved back and forth between cards and company accounts throughout the cards' three-year life span.
Stephen C. Gray took a seat on the board of directors of HH Ventures LLC (doing business as Ready Wireless LLC). He will also fill a senior advisory role for the company. Dennis Henderson, President and Chief Executive Officer of Ready Wireless, said Gray's "expertise in business development and as an entrepreneur will offer Ready Wireless new vision, problem solving ability and will help provide an overall assurance of good governance."
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