Eufora Receives its Third Patent for its Prepaid Card with Exclusive Credit Reporting Products

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Eufora Founder and President Tommy Constantine’s foresight and innovative concepts continue to build value for the Company as it expands its Intellectual Property Portfolio

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There have been a number of other prepaid card programs over the years, that have represented that they either have, or will in the future, report to the major credit bureaus.

Tommy Constantine co-founded the Eufora® prepaid and credit card company in 2001 and launched one of the very first prepaid card programs in the United States (with MasterCard®). Accordingly, its founders were in a unique position to identify what they believed, were certain key elements that were inherently missing from prepaid card products.

Eufora was able to identify these key elements very early in the prepaid category’s development process and determined that by and large, consumers wanted a card which had the ability to report to the major credit reporting agencies, thus helping one establish or re-establish one's credit.

Eufora's third patent to receive a Notice of Issuance from the USPTO is related to the patent application entitled "Methods of Establishing Credit" USPTO Patent Number 8,020,755. Eufora has pursued an aggressive first-to-market strategy regarding credit reporting products for prepaid cards.

“We entered the payment card industry with the intent of being a co-branded, prime and non-prime credit card issuer. Early on, we were fortunate enough to partner with InfiBank® (then a subsidiary of FNBO) and Visa® for our prime credit card product,” said Constantine. “Unfortunately, this was a time when many non-prime credit card issuers were either voluntarily or involuntarily exiting the space and the few remaining issuers had little or no interest in sharing the market with a co-brand partner such as Eufora,” stated Constantine. “On that basis, MasterCard suggested that we try its new prepaid card product to help fill the void, so we jumped at the opportunity to be one of its first prepaid card programs.”

“We were very excited about the prepaid card and its potential to meet the needs of our non-prime applicants,” said Constantine. “When we launched the Eufora prepaid card in 2002, we generated over 800,000 applications in less than a year, which were basically the declines for our prime credit card offering. The challenge we faced was that nine out of ten applicants did not want our prepaid card,” stated Constantine. “When we asked people why, the response was overwhelmingly the same. They simply did not want a card that did not report to the major credit bureaus!”

Eufora went on to develop its proprietary products before most of the current prominent prepaid card issuers/programs had even begun to enter the marketplace. Today, Eufora’s prepaid card products are the only ones which truly report to the major credit reporting agencies (TransUnion® and Experian™), which Eufora believes, makes them significantly more desirable for consumers and issuers (who license Eufora's IP).

“There have been a number of other prepaid card programs over the years, that have represented that they either have, or will in the future, report to the major credit bureaus,” said Constantine. “The fact is, they never have and I think it is highly unlikely that the major bureaus will ever accept the typical transactional history of a prepaid card. This is because lenders rely on the information being provided by the major credit bureaus to determine one's credit worthiness and therefore, the bureaus must protect the integrity of the data,” stated Constantine. “How one behaves with respect to loading and spending their own money on a prepaid card, is not indicative in the least, of how they will behave with respect to a loan and whether or not they will pay it back,” said Constantine. “It’s human nature and one behavioral pattern has nothing to do with the other.”

“In my professional opinion, no major credit bureau will, nor should it, ever incorporate such data in its scoring algorithms,” said Constantine. In the unlikely event one elects to do so, a lender would not consider such data to be valuable in the loan decisioning process for the reasons I have stated.”

Mark D’Ambrosio, Eufora’s Co-Founder and Chief Marketing Officer agrees.

“We first talked to Trans Union, Experian and Equifax® about this almost ten years ago and we continue to discuss the matter on an ongoing basis,” said D’Ambrosio. “We came to the realization long ago, that there must be a loan involved. It’s basic logic,” stated D’Ambrosio. “The key is to provide the loan product in an altruistic, reasonable and consumer friendly environment that is fiscally responsible and does not allow its participants to get deeper and deeper into debt in the process.”

Eufora offers what it refers to as a micro-installment loan, which is provided at a level that Eufora believes is just sufficient enough of a receivable to have an impact on one’s credit report, but not enough to significantly impact one’s level of overall debt. The lender/borrower relationship is then maintained in what Eufora believes is a fair, reasonable and controlled environment. For example, members receive friendly periodic reminders electronically to make their monthly installment payments. Also, with Eufora, one won’t see things like late fees, increases in the interest rate or credit limit increases which drive up costs and allow one to increase one’s overall level of debt. Then it combines this structure with its co-branded prepaid card which includes valuable and tangible member benefits.

“We believe our product is the most powerful and economical solution for the unbanked and underbanked,” said D’Ambrosio. "We are not a big company and we have never attempted to raise the kind of funding that many of the other large prepaid card companies have had. But we have grown the business organically, solely on the merits of the product and the benefits it provides our members,” stated D’Ambrosio. “More importantly, we have proven its effectiveness over the years and we have protected our inventions which we continue to do by expanding our IP.”

Headquartered in Scottsdale, Arizona, Eufora was founded in late 2001. Eufora provides its members with a co-branded prepaid card which provides exclusive member benefits to its cardholders. The Eufora Prepaid Card is also the only prepaid card that reports to the major credit reporting agencies. Eufora holds several patents for its exclusive prepaid card credit reporting products, as well as other innovative products in the payment card industry.

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Mia Edrozo
Eufora, LLC
(480) 222-8005
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