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MASTERCARD INTERNATIONAL MAINTAINS LEADERSHIP IN CONSUMER PROTECTION FOR SECURED CARDS; TIGHTENS RULES TO REDUCE UNAUTHORIZED SOLICITATIONS

 NEW YORK, Dec. 1 ~PRNewswire~ -- Consumers beware of credit card solicitations which require a fee to "help you get a credit card."
 According to a recent consumer warning from MasterCard International, if such a fee is requested by anyone other than the card issuing bank as part of the application process, then the solicitation is fraudulent. New rules adopted by MasterCard state that all cardholder fees related to a MasterCard card must be made payable solely to the card issuing bank.
 "The ever-enterprising scam artist has been collecting thousands of dollars from unsuspecting consumers through misleading solicitations for MasterCard cards and other credit cards," explained Dan Ciporin, vice president, MasterCard International, Franchise Management. "These operations imply that by filling out an application and enclosing a set fee, the applicant will receive a credit card -- when in reality the applicants receive nothing at all or, at most, simply a list of issuers who issue secured cards."
 Another prevalent scam technique is for a scam artist to do nothing more than remove batches of "take-one" MasterCard applications from their local bank and send these out to individuals who reply to their fraudulent solicitations.
 Secured Card Vulnerable to Fraud
 According to MasterCard, the secured card market, in particular, has been vulnerable to fraud because of the unique characteristics of the product. Secured cards fill an important niche in the credit card marketplace for those consumers who are establishing credit for the first time and for individuals who are re-establishing credit after overcoming financial difficulties.
 A deposit account that "secures" the credit card is required; hence the term "secured card." It is typical for issuers to require an application fee for processing and establishing the secured card account.
 Secured Cards Must Follow Solicitation Rules
 MasterCard established itself as a leader in consumer protection for the secured card product in August 1991 when it was the first in the industry to issue all-encompassing rules governing the solicitation for and issuance of MasterCard secured cards. These rules provide that:
 -- the offering must state that the card being offered is a secured card and thus requires a deposit account which will bear a specific relationship to the credit line offered;
 -- the offering must provide the name and address of the issuer;
 -- the word "bankruptcy" cannot be used in a marketing context; and
 -- all issuers must register their secured program with MasterCard and must obtain approval from MasterCard for all advertising and solicitations used in their secured card program.
 MasterCard strengthened its rules late last year by prohibiting the use of any 900 or pay-per-call telephone number in the marketing of any of its cards.
 Consumers Need to Identify Bank
 "Because the secured card is designed to meet the needs of consumers who may have difficulty obtaining a standard or gold card, responsiveness to fraudulent offerings is common," confirmed Mr. Ciporin. "Consumers should avoid responding to postcard offerings which promise to 'help get you a credit card' for a fee."
 MasterCard recommends that offerings which make light of the negative impact of bankruptcy are to be avoided without question. Additionally, if the solicitation is not clear as to what the consumer will receive for their fee, or there is any question whatsoever about the legitimacy of the offer, located the name and address of the issuing bank in the advertisement or solicitation. If you can't find the issuers' name and address, you can be sure that it is not an authorized solicitation for a MasterCard card. If you can find the name of the issuer, then contact the institution to confirm that this is a legitimate offering and that any application fee is indeed going directly to that issuer.
 If questions still remain, send the application in question to MasterCard at the following address and we will investigate it; Franchise Management, MasterCard International, P.O. Box 1288, Radio City Station, New York, N.Y. 10101-1288.
 -0- 12~1~92
 ~CONTACT: Steve Apesos of MasterCard International, 212-649-5476~


CO: MasterCard International ST: New York IN: FIN SU:

LR-OS -- NY037 -- 2402 12~01~92 11:58 EST
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Date:Nov 24, 1992
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