OPERATION ERASE The Federal Trade Commission has brought charges against the New Jersey-based National Credit Management Group as part of Operation Eraser, a federal-state crackdown on fraudulent credit repair firms. Also charged with violating the Credit Repair Organizations Act are NCMG principals Glen Buzzetti and Joseph Ferguson. NCMG, doing business as 1-800-YES-CREDIT, Buzzetti and Ferguson are charged with making deceptive claims about their ability to improve consumers’ credit records and get them credit cards, by charging advance fees for these services, violating the Telemarketing Sales Rule by making unauthorized bank account debits, obtaining advance fees for “guaranteed” credit cards, and failing to disclose the true costs of their services. The proposed settlement would permanently ban Buzzetti and Ferguson from most credit-related business, would ban them from check debiting, and would require that they pay $350,000 in redress. National Credit Management Group was shut down in April. NCMG advertised on TV and radio, soliciting consumers to call 1-800-YES-CREDIT to receive an unsecured credit card, offering a credit analysis, and suggesting they would help consumers improve their credit ratings, in return for an up-front fee of $95. Further, they obtained consumers’ checking account numbers and made unauthorized withdrawals. Operation Eraser, initiated in March, has targeted 31 companies that promised to restore consumers’ creditworthiness, removing negative information from their credit reports (whether the negative information was accurate or not), sometimes charging fees over $1000. For more information about Operation Eraser call the FTC at (202) FTC-HELP.

CREDCO CRACKDOWN

CREDCO, a division of First American Real Estate Solutions, has been charged with violating the Fair Credit Reporting Act. Among the charges brought by the Federal Trade Commission, which FARES has agreed to settle, is failing to investigate information disputed by consumers in instant merge reports, which blend account information on individual consumers from two or three of the national credit bureaus: Trans Union, Equifax and Experian. According to the FTC’s complaint, CREDCO has failed to comply with guidelines which require that information in a consumer report disputed by a consumer must be investigated, and corrected or deleted if found to be inaccurate. If after investigation, the consumer reporting agency chooses not to change the way it reports the information, it must include in future consumer reports a statement that the information is being disputed by the consumer, and include any statement describing the dispute submitted by the consumer in consequent consumer reports. In addition, on the rare occasion that CREDCO did investigate the disputed information, it did not correct or delete from its files the information found to be inaccurate or obsolete. CREDCO also did not report in future instant merge reports the disputed information, nor prevent the disputed information from reappearing in future reports. In the proposed settlement consent agreement FARES has agreed to adhere to all FTC guidelines applicable to all consumer reports, with appropriate notification to the furnisher of the disputed information within five business days. For more information concerning CREDCO call the FTC at (202) FTC-HELP.

MAY RESTITUTION

The May Department Stores Company has agreed to make full restitution, totaling more than $15 million, to consumers they persuaded to “reaffirm” their credit card debts after filing bankruptcy. Bankruptcy Trustee and many state Attorneys General, states that May regularly sought out consumers who had filed for bankruptcy protection to persuade them to “reaffirm” credit account debts, and falsely represented that these “reaffirmation agreements” would be filed with the bankruptcy courts, as required by law. In fact, the FTC reports, in many cases May did not file the “reaffirmation agreements” or the bankruptcy courts did not approve the agreements, and they were consequently not legally binding on consumers. Reaffirmation agreements are not illegal. However, the U.S. Bankruptcy Code requires that they are filed with the bankruptcy courts, and in the case of debtors not represented by legal counsel, the agreements must be approved by the court. If not filed or approved, the agreements are unenforceable, and the underlying debts are legally discharged in bankruptcy. The May Department Stores Company, one of the largest department store operators in the country, operates many well-known stores, including Lord & Taylor, Hecht’s Strawbridge’s, Foleys, Robinsons-May, Kaufmann’s, Filene’s, Famous Barr, L.S. Ayres and Meier & Frank. For more information on the May settlement contact the FTC at (202) FTC-HELP.

ADVANTA SMARTMOVE

A class action suit against Advanta's pricing policies may be settled next month in a hearing scheduled for Dec. 23 in Delaware. The plaintiff law firms which include Girard & Green of San Francisco; Langston, Frazer, Sweet & Freese of Birmingham; and Shepherd & Geller of Media, PA. is seeking to notify all affected persons concerning the settlement. The class action covers the period between Jan. 1, 1992 and Nov. 2, 1998 and extends to all consumer credit cards issued by Advanta National Bank, Advanta National Bank USA, or Colonial National Bank USA. The suit seeks damages for cardholders who established a balance through the Advanta 'SmartMove' program and were charged an interest rate on that balance higher than the rate described in the promotional material pursuant to which the balance was established. For more information contact Daniel C. Girard, 160 Sansome Street, Suite 300; San Francisco, CA 94104; or Richard A. Freese, Morgan Keegan Center; 2900 Highway 280, Suite 240; Birmingham, AL 35223; or Scott R. Shepherd, 117 Gayley Street, Suite 200; Media, Pennsylvania 19063. You may also contact the attorneys via email: SmartMove@classcounsel.com.

ART PATRONS CARD

MBNA America Bank has developed a new affinity credit card, “Entertainment Edge Platinum Plus MasterCard”, that offers cardholders entertainment benefits including show discounts, preferred seating, advanced ticket sales, and special benefits throughout the year. The total package will also include merchandise tie-ins and discounts on concessions, restaurants, accommodations and parking, offering a complete entertainment experience. The Entertainment Edge program will initially focus on the Boston-Washington corridor - the core Broadway market, and will later expand to regional areas that have a high level of live entertainment consumers: Chicago, Los Angeles, London and Toronto. Introduced in October, the Entertainment Edge MasterCard offers a unique opportunity. Prospective cardholders are allowed to test the first entertainment benefit, a 20% savings on tickets to the Broadway musical Parade, before applying for the card. This initial campaign will also offer a choice of three premium gifts: a Zagat’s Survey, a STUBS Guide or a tote bag. For more details call 800-785-9944.

JEWEL CARD

The Jewel-Osco Preferred VISA Card was also released this month for Chicago area consumers. The card is among the first to offer automatic store discounts at any one of Jewel-Osco’s 187 food and drug combination stores and 79 free-standing Osco Drug Store locations. The Jewel-Osco Preferred VISA enables customers to earn two points for every dollar spent on the card at any Jewel-Osco location, and one point for every dollar spent on the card at any other retailer. Customers start earning rewards when 1500 points have been accumulated, earning $100 off select vacation packages with Carnival Cruise Lines or Royal Caribbean International at that level. Customers can also earn certificates for $25 worth of free food at Jewel-Osco for 2500 points, or free American Airline tickets at the 25,000 point level. The customer’s point totals will be indicated on their monthly VISA statements. To redeem a reward, customers simply call the toll-fee number listed on their statement. There is no annual fee on the Jewel-Osco Preferred Visa if the card is used three times in a 12-month period. For more info call 1-877-JEWEL-88.

HAWAII CARD

University of Hawaii students and alumni can now support the UH Manoa Athletics program simply by using a new MBNA affinity credit card. UH Manoa, located in Honolulu, is the largest of the 10 University of Hawaii campuses, and operates a NCAA Division IA athletic program. The University of Hawaii has joined over 500 other colleges and universities that have credit cards bearing their name in partnership with MBNA. MBNA will contribute to the UHM athletic department each time the co-branded card is used. For more info call (800)847-7378.

FOOD CARD

American Express and the National Restaurant Association rolled-out the "National Restaurant Association Card from American Express" this month. The a no-fee affinity credit card carries the look and logo of the National Restaurant Association, as well as American Express branding and is accepted everywhere 'American Express Cards' are welcome. Among card program features: savings and value-added offers from Continental Airlines, 800-SEND-FTD, Mobil Speedpass, J&R Music and Computer World; an exclusive AmEx travel desk for cardholders offering preferentially priced rates on hotels, car rentals and vacation packages; complimentary consultations from AmEx Financial Advisors; a 5.9% intro rate; credit lines up to $35,000; automatic credit insurance for disability, unemployment and death. The National Restaurant Association represents 800,000 outlets with an aggregate workforce of 10.2 million. Interested restaurateurs should call American Express for more details at 800-THE-CARD.

CORN CARD

The newest breakthrough in the manufacture of credit cards is a resin called MAZIN, a biodegradable substance that includes corn by-products. Credit cards made of MAZIN, when introduced into a composting environment, will totally disappear in three to five weeks. Normal credit cards, produced by the billions, are composed of PVC (polyvinyl chloride), the same material used in plumbing pipes, IV bags and diaper liners, and are non-recyclable. This new technology has been developed by the University of Nebraska, in conjunction with CCI, who holds the trademark and distribution rights for the commercial use of MAZIN. Digicard, a Vienna, Austria-based manufacturer, is one of several companies experimenting with printing the cards. Gemplus, the world’s leading provider of smart card solutions and a major card manufacturer, is joining hands with CCI in anticipation of obtaining exclusive distribution rights for use of MAZIN in cards for North America and beyond. Monitor CardTrak Online (www.cardtrak.com) for further developments.