First Data 2007 Annual Report Download - page 18

Credit Reporting and Debt Collections Regulations
TeleCheck Services Inc. ("TeleCheck") is subject to the Federal Fair Credit Reporting Act ("FCRA") and various similar state laws based on
TeleCheck's maintenance of a database containing the check-writing histories of consumers and the use of that information in connection with its check
verification and guarantee services.
The collection business within TeleCheck is subject to the Fair Debt Collection Practices Act and various similar state laws. FDRL has a license under
the Consumer Credit Act to enable it to undertake collections activity on behalf of its card issuing customers through calls and letters to the debtors. First Data
Deutschland and TeleCash in Germany each hold a license under the German Legal Services Act to undertake collections activities on behalf of its card
issuing customers as well as against their own debtors.
TeleCheck may become subject to further regulation in the future as legislatures, both federal and state, enact additional legislation aimed at regulating
the collection, storage and use of data and databases regarding consumers. In particular, legislation reducing or eliminating access to and use of information
on drivers licenses, requiring blocking of access to credit reports or scores, mandating score or scoring methodology disclosure and proscribing the
maintenance or use of consumer databases, including a consumer's rights to affect the usable content of databases, could reduce the effectiveness of
TeleCheck's risk management tools or otherwise increase its costs of doing business. Such legislation could also affect the business of First Data Solutions,
which provides access to non-FCRA data for identity verification and fraud-prevention purposes, by imposing new regulatory requirements or restricting the
availability and completeness of consumer data.
In Australia, FDRA and BWA Merchant Services Pty. Ltd. are subject to the Privacy Act with respect to obtaining credit reports. No license is required
but the Act regulates the persons to whom credit reports can be provided by credit reporting agencies and the uses and disclosures that can be made of the
information contained in credit reports obtained about consumers.
Payment Instrument Licensing and Regulation
We are subject to various U.S. federal, state and foreign laws and regulations governing the sale of payment instruments, such as official checks and
money orders.
In the United States, most states license issuers of payment instruments. Many states exercise authority over the operations of our services related to the
sale of payment instruments and, as part of this authority, subject us to periodic examinations. Many states require, among other things, that proceeds from the
sales of such instruments be invested in high-quality marketable securities prior to the settlement of the transactions. Such licensing laws also may cover
matters such as regulatory approval of consumer forms, consumer disclosures and the filing of periodic reports by the licensee, and require the licensee to
demonstrate and maintain levels of net worth. Many states also require issuers of payment instruments and their agents to comply with federal and/or state
anti-money laundering laws and regulations. Our payment instrument businesses also are subject to regulation by the United States, including anti-money
laundering laws and regulations, including the Bank Secrecy Act, as amended by the USA PATRIOT Act of 2001 (collectively, the "BSA"). In addition,
certain economic and trade sanctions programs that are administered by the Treasury Department's Office of Foreign Assets Control ("OFAC") prohibit or
restrict transactions to or from or dealings with specified countries, their governments, and in certain circumstances, their nationals, and with individuals and
entities that are specially-designated nationals of those countries, narcotics traffickers, and terrorists or terrorist organizations. The BSA, among other things,
requires the issuers and sellers of money orders and official checks to develop and implement risk-based anti-money laundering programs, report large cash
transactions and suspicious activity, and to maintain transaction records.
Similar anti-money laundering and counter terrorist financing and proceeds of crime laws apply to movements of currency and payments through
electronic transactions and to dealings with persons specified in lists maintained by the country equivalents to the OFAC lists in several other countries and
require specific data retention obligations to be observed by intermediaries in the payment process. Our businesses in those jurisdictions are subject to those
data retention obligations.
We have developed and are enhancing global compliance programs to monitor and address legal and regulatory requirements and developments.
Government agencies both inside and outside the United States may impose new or additional rules on sales of payment instruments, including
regulations which (i) impose additional identification, reporting or recordkeeping requirements; (ii) limit the entities capable of providing the sale of payment
instruments; and (iii) require additional consumer disclosures.
17