UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to
Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
June 10, 2008
CompuCredit Corporation
(Exact name of registrant as specified in its charter)
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Georgia
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000-25751
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58-2336689
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(I.R.S. Employer Identification No.)
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Five Concourse Parkway, Suite 400, Atlanta, Georgia 30328
(Address of principal executive offices)
Registrant’s telephone number, including area code:
770-828-2000
Check the appropriate box below if the Form 8-K
filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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¨
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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On June 10, 2008, the Company
issued various press releases in response to a civil complaint filed against the Company and one of its subsidiaries by the Federal Trade Commission (“FTC”) and three administrative complaints filed against the Company by the Federal
Deposit Insurance Corporation (“FDIC”). Copies of the press releases are attached hereto as Exhibits 99.1 and 99.2 and are incorporated by reference.
The press releases contain forward-looking statements, including statements regarding the outcome of the complaint and administrative proceedings and the impact on the Company’s business and its financial
condition. Actual results may differ materially from the results suggested by these forward-looking statements for a number of reasons, including that the ultimate outcome of the complaint and actions will be determined by a federal court or
administrative body.
The foregoing, together with the exhibits hereto, shall be deemed “furnished” and not “filed” for
all purposes. The filing of this Form 8-K in no way implies that the subject matter hereof is material to the Company.
Item 9.01. Financial Statements and Exhibits.
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Exhibit
Number
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Description of Exhibit
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99.1
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Press Release dated June 10, 2008
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99.2
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Press Release dated June 10, 2008
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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COMPUCREDIT CORPORATION
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Dated: June 11, 2008
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By:
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/s/ J.Paul Whitehead, III
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Name:
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J.Paul Whitehead, III
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Title:
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Chief Financial Officer
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EXHIBIT INDEX
Form 8-K
June 11, 2008
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Exhibit
Number
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Description of Exhibit
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99.1
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Press Release dated June 10, 2008
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99.2
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Press Release dated June 10, 2008
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Exhibit 99.1
MEDIA CONTACTS:
Tom Donahue—CompuCredit
(770) 828-1577
or
Bill Marks – Fleishman-Hillard
(404)
510-9347
COMPUCREDIT COMMENTS ON ANTICIPATED FTC AND FDIC
ALLEGATIONS
ATLANTA – June 10, 2008 – CompuCredit Corporation
(NASDAQ: CCRT) issued the following statement in anticipation of actions by the U.S. Federal Trade Commission (FTC) and the Federal Deposit Insurance Corporation (FDIC) related to the Company’s past credit card marketing practices.
“The claims asserted by the FTC and FDIC in settlement negotiations regarding CompuCredit’s past credit card marketing practices are untrue and
without merit. The credit card programs at issue complied with applicable laws and regulations and have exemplified best practices in credit card marketing. In fact, the FDIC repeatedly determined over the years now at issue that the marketing
materials fully disclosed fees and terms in compliance with consumer protection laws. Therefore, CompuCredit intends to vigorously contest these unsupported allegations and is confident that it will prevail. Specifically, CompuCredit notes that:
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The FDIC has repeatedly advised consumers that CompuCredit’s disclosures are in compliance with applicable law.
The FDIC’s own Consumer Response
Center — established by Congressional mandate specifically to monitor compliance with consumer protection laws — reviewed the credit card marketing materials in question repeatedly during the period that is the focus of the Agencies’
current allegations. Throughout this period, the FDIC wrote numerous
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letters to consumers assuring them that the materials complied with applicable laws and regulations.
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Ø
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The FDIC retained CompuCredit for the express purpose of marketing credit cards to customers of a bank directly controlled by the FDIC.
Specifically, the
Agency retained CompuCredit in June 2002 to serve as its marketing partner for a portfolio of Nextbank, N.A. credit card holders. The FDIC, as receiver for Nextbank, entered into a “Cardholder Solicitation Agreement” pursuant to which
CompuCredit would offer qualified Nextbank cardholders the opportunity to establish a new credit card account and transfer part or all of the old account to a new credit card.
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Ø
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CompuCredit’s marketing materials at issue in this case meet or exceed existing
and proposed
federal regulations regarding disclosure
of credit terms.
The Federal Reserve’s proposed new regulations for credit card practices and disclosure would require the industry to match many of the disclosure standards and consumer protection features introduced unilaterally by
CompuCredit several years ago. Moreover, CompuCredit’s business practices have always been consistent with the “Gold Standard” credit card principles released in August 2007 by Rep. Carolyn B. Maloney (D-NY), Chair of the House
Subcommittee on Financial Institutions and Consumer Credit.
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Ø
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CompuCredit has always conducted its business on the principle that customers deserve full and fair disclosure of credit card terms and conditions, and that
customers deserve professional and courteous service at all times.
Customer satisfaction surveys conducted regularly since 1999 clearly demonstrate that our customers understand the terms and conditions of their credit card agreements and
are satisfied with the service we provide to them.
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It is our understanding that the FTC may make allegations related to debt collection
practices involving Jefferson Capital, a subsidiary of CompuCredit. We have repeatedly
asked the FTC to provide us any proof of these allegations. We are disappointed that the agency has yet to share with us any factual support for these
claims. Jefferson Capital denies any wrong doing and insists that its collection practices are fully compliant with all applicable state and federal laws and regulations.
CompuCredit remains committed to helping provide financially underserved consumers with access to credit. We do not believe that the Agencies’ actions will require any changes in our practices or will have a
material impact on our financial condition. Together with our banking partners, CompuCredit will continue to assist its banking partners in providing credit cards that can be instrumental in helping our customers meet their financial needs and build
or re-build their credit ratings.”
About CompuCredit
CompuCredit (NASDQ: CCRT) is a specialty finance company and marketer of branded credit cards and related financial services. CompuCredit provides these services to consumers who are underserved by traditional
financial institutions. Through corporate and affinity contributions focused on the underserved and un-banked communities, CompuCredit also uses financial resources and volunteer efforts to address the numerous financial challenges affecting our
customers. For more information about CompuCredit, visit
www.compucredit.com
.
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Exhibit 99.2
MEDIA CONTACTS:
Tom Donahue – CompuCredit
(770) 828-1577
or
Bill Marks – Fleishman-Hillard
(404)
510-9347
COMPUCREDIT COMMENTS ON FTC AND FDIC ALLEGATIONS
ATLANTA – June 10, 2008 – CompuCredit Corporation (NASDAQ: CCRT) issued the following statement in response to actions by the U.S. Federal Trade Commission (FTC) and the Federal Deposit Insurance
Corporation (FDIC) related to the Company’s past credit card marketing practices.
“The claims asserted by the FTC and FDIC regarding
CompuCredit’s past credit card marketing practices are untrue and without merit. The credit card programs at issue complied with applicable laws and regulations and have exemplified best practices in credit card marketing. In fact, the
FDIC repeatedly determined over the years now at issue that the marketing materials fully disclosed fees and terms in compliance with consumer protection laws. Our disclosures regarding available credit have been consistent even with recently issued
proposals by the Federal Reserve for credit card disclosures. The Agencies themselves do not dispute that our solicitations have always complied with the express requirements for the disclosures of fees and other terms set forth in the Truth in
Lending Act and Regulation Z. Therefore, CompuCredit intends to vigorously contest these unsupported allegations and is confident that it will prevail.
Notwithstanding the merits of our position, we reached an agreement in principle with the agencies that was conditioned upon the FDIC’s entering into various agreements with our banking partners. The FDIC did not reach agreement
with two of our banking partners. Obviously, we could not agree to a settlement that did not include our banking partners.
The restitution claims asserted by the FDIC and the FTC today in their joint press conference largely involve amounts
that were never paid by consumers. In fact, our agreement in principle previously reached with the agencies provided for credits to accounts that would have involved cash payments and earnings implications of approximately $7.5 million—all of
which had been accrued for on our March 31, 2008 balance sheet.
In any event, CompuCredit expects that any resolution of this matter will not have a
material effect on our financial condition, given that any resolution is likely to involve issuing credits for amounts that were never collected.
We do
not believe that the Agencies’ actions will require any changes in our practices. Together with our banking partners, CompuCredit will continue to assist its banking partners in providing credit cards that can be instrumental in helping our
customers meet their financial needs and build or re-build their credit ratings.
Specifically, CompuCredit notes that:
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Ø
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The FDIC has repeatedly advised consumers that CompuCredit’s disclosures are in compliance with applicable law.
The FDIC’s own Consumer Response
Center — established by Congressional mandate specifically to monitor compliance with consumer protection laws — reviewed the credit card marketing materials in question repeatedly during the period that is the focus of the Agencies’
current allegations. Throughout this period, the FDIC wrote numerous letters to consumers assuring them that the materials complied with applicable laws and regulations.
|
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|
Ø
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The FDIC retained CompuCredit for the express purpose of marketing credit cards to customers of a bank directly controlled by the FDIC.
Specifically, the
Agency retained CompuCredit in June 2002 to serve as its
|
|
|
marketing partner for a portfolio of Nextbank, N.A. credit card holders. The FDIC, as receiver for Nextbank, entered into a “Cardholder Solicitation
Agreement” pursuant to which CompuCredit would offer qualified Nextbank cardholders the opportunity to establish a new credit card account and transfer part or all of the old account to a new credit card.
|
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|
Ø
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CompuCredit’s marketing materials at issue in this case meet or exceed existing
and proposed
federal regulations regarding disclosure
of credit terms.
The Federal Reserve’s proposed new regulations for credit card practices and disclosure would require the industry to match many of the disclosure standards and consumer protection features introduced unilaterally by
CompuCredit several years ago. Moreover, CompuCredit’s business practices have always been consistent with the “Gold Standard” credit card principles released in August 2007 by Rep. Carolyn B. Maloney (D-NY), Chair of the House
Subcommittee on Financial Institutions and Consumer Credit.
|
|
|
Ø
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|
CompuCredit has always conducted its business on the principle that customers deserve full and fair disclosure of credit card terms and conditions, and that
customers deserve professional and courteous service at all times.
Customer satisfaction surveys conducted regularly since 1999 clearly demonstrate that our customers understand the terms and conditions of their credit card agreements and are
satisfied with the service we provide to them.
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The FTC also made allegations related to debt collection practices involving Jefferson
Capital, a subsidiary of CompuCredit. Jefferson Capital denies any wrongdoing and insists that its collection practices are fully compliant with all applicable state and federal laws and regulations. We repeatedly asked the FTC to provide us any
proof of these allegations. We are disappointed that the agency has yet to share with us any factual support for these claims.”
About CompuCredit
CompuCredit (NASDQ: CCRT) is a specialty finance company and marketer of branded credit cards and related financial services. CompuCredit provides these services to consumers who are underserved by traditional
financial institutions. Through corporate and affinity contributions focused on the underserved and un-banked communities, CompuCredit also uses financial resources and volunteer efforts to address the numerous financial challenges affecting our
customers. For more information about CompuCredit, visit
www.compucredit.com
.
###