Quite a few people wrote me to say that they felt the value of NYNEX cards would probably not decrease due to their historical significance. While I believe this could be true, I believe that a lower denomination card ultimately will be a better investment than a higher one. (Remember, I said I was thinking of cashing in my higher value cards, not my $5 cards) If the card can not be used for phone time, what is the difference between a $5 card and a $20 card? Not much! If the cards are not ultimately destroyed, expect them to find their way to the collector market. Unless or until this hobby expands, the market may not be able to absorb the number of cards, and the prices will decline.
Finally, I have a comment on the NYNEX collector club. It probably has no future due to the recent events, but just in case they do, I strongly do not recommend membership. There is no communication from club directors, even though I tried to contact them. They have charged my credit card and have not sent cards, I have had to cancel the charges through my credit card company. Since many members are on a subscription plan, those who are current members should carefully look over their credit card statement to check and make sure NYNEX did not fraudulently charge them.
HT Technologies, Inc. ( "HT" and/or "the Company" ) a highly recognized leader in the pre-paid phonecard segment of the telecommunications industry filed for Chapter 11 protection and reorganization in the United States Bankruptcy Court on January 31, 1997.
The significant and culminating events leading up to the Chapter 11 filing were essentially three-fold.
First, while HT had sustained a dramatic rate of growth of 400% annually since its inception in 1993, the Company had been impacted by the departure of several key employees from its sales and marketing division in the first quarter of 1996 who started their own rival firms.
The new firms that the former employees of HT started thus impacted the established revenue base of HT to further the impairment of the financial condition of the Company.
Second, in early 1996, a co-location facilities provider of the Company's switch, by virtue of its alleged negligence, caused HT to sustain an estimated middle to high six-figure loss, or more. The Company expects to redress this matter through an adversary proceeding in its pending Chapter 11.
The final incident causing the Company to file for Chapter 11 protection was the apparent ongoing conversion of a significant amount of the Company's assets by a former employee which was discovered in late January, 1997.
It further appears that the former employee may have fraudulently caused the carriers of HT to be billed for a sufficient and yet to be determined amount of airtime. A cursory review reveals that HT may face a contingent and as yet to be determined liability of perhaps millions of units of airtime.
The Company is currently in the process of securing its internal security systems that have been breached as a result of the foregoing incidents.
While the Company reasonably excepts that its insurance liability carrier will indemnify HT for certain business losses which were sustained, such liability coverage has not yet been fully examined or determined.
Considering the serious nature of the above circumstances, the senior management of the Company decided that the most viable opportunity to provide for a return on its operations, as well as to effectuate the continuing viability of the Company, was to proceed with a Chapter 11 reorganization.
Contemporaneously with the filing of the Chapter 11, HT has negotiated the wholesale liquidation of its entire collector card inventory of over 200,000 units to an independent master distributor. HT will no longer be involved in direct sales to the collector card segment of the phonecard industry.
The Company will concentrate its sales and marketing efforts to other areas of the pre-paid phonecard industry which have historically demonstrated a highly profitable basis of operation for the Company.
With a newly developed plan of reorganization in place, HT can follow a path of planned profitable growth, which also includes attracting a recapitalization funding and a high volume merger/acquisition production partner.
The senior management of the Company is confident that with its newly devised business plan of reorganization and very focused controls on operations, a successful reorganization is not only feasible, but is absolutely assured.
HT looks forward to the challenges ahead and believes it will emerge financially, technically and operationally stronger than ever.
Something about the press release that does concern me is the sale of 200,000 cards to a master distributor. That is an awful lot of cards to be placed on the marketplace. We’ve seen other examples of cards being blown out, I hope that these cards do not meet the same fate. As it is, many HT cards are easily found below the suggested retail value from dealers. If tens of thousands make their way out to the marketplace, the prices will be even further depressed. Additionally, this could hurt the future value of HT cards. My advice would be to exercise caution when buying HT cards. If they do not pull out of Chapter 11, phone time could disappear.
Visa International will launch a major trial of "electronic purse" cards in Great Britain, similar to the one it sponsored at the Atlanta Olympics last summer. Unlike the Olympic cards, the ones issued for the Leeds trial will be equipped with both public- and private-key encryption technology for security against hackers and other criminals. The cards contain a microchip storage capacity that can be credited and debited with a monetary value over a telephone line or at an ATM machine.
CONSUMER TIPS
1. Company Reputation
Look for a reputable, established, financially sound card provider with a name you recognize to avoid falling victim to the fly-by-night companies that may or may not be around tomorrow to honor your pre-purchased calling time.
2. Customer Service
Make sure the card has a toll-free number on the back that you can call if you need assistance. If a customer service number is not provided, there is a chance that if the card goes bad, the purchaser will be out of luck. The size and stature of the company issuing the card, doesn't always directly correlate to the quality of customer service provided.
3. Brand Familiarity
If you are not familiar with the brand and if the vendor cannot provide answers to questions or give you materials that will answer your questions refrain from buying the card. If you choose to purchase the cards, buy them in small denominations to get comfortable with the service and to make sure that it is a stable provider.
4. Reliability
Reliability and call completion are critical when using prepaid calling cards. Look for a card from a reputable company to guarantee quality customer service that is provided 24 hours a day 7 days a week. Other important features to look for are multi-lingual customer service and voice prompts in non- English.
5. Phone Card Industry Trade Association
If you are still concerned with validity of a service provider, you can call the International Telecard Association at 1-800-333-3513 to request an informational brochure provided jointly by the ITA and MCI PrePaid.
RETAILER/DEALER TIPS
1. Marketing Support
With prepaid cards fast becoming today's hottest retail item, it's imperative that the provider offer a full-service marketing merchandising support for the product, from retail packaging, servicing, point-of-sale support, advertising support, and inventory management.
2. Total Package Satisfaction
Look at the entire package, comparing penny to penny isn't always wise. Evaluate whether you will have to expend your own resources to market and merchandise the product.
3. Reputable Carrier/Provider
It is critical to look for reputable, established, financially sound card providers to ensure customers receive quality cards. Too many fly-by- night providers have gone bankrupted, leaving customers with cards that are invalid.
4. Distribution Channels
If you're a large retailer and have national distribution, it's critical you have a provider with the distribution and service capabilities to handle the huge demand.
5. Sophisticated Network
Look for a provider with a strong network platform. One that is able to customize features and ensure call completion.
Prosecutions and tighter regulations have pushed Mafia crime families into three lucrative new areas: health insurance, prepaid telephone cards and small Wall Street firms, the paper said, citing law enforcement experts on organized crime. The experts based their conclusions on informants, surveillance and electronic eavesdropping, the Times said.
In the past, crime families concentrated on union shakedowns, infiltrating trash hauling, extortion at city markets, and fleecing pension and welfare funds.
But as prosecutors have shut them out of those traditional organized crime targets, the mobsters have turned to new businesses.
Agents say the Gambino crime family set up a prepaid phone card company that stole more than $50 million from callers and phone companies from fraudulent sales in the New York area and in other big cities, the Times said.
Each card was typically sold for $20 in calls, but most cards became worthless after $2 or $3 in calls because they had not been programmed for the listed amounts, one unidentified agent told the newspaper.
The telephone carriers that handled the calls also lost money, the agent said, ``because they made the deal almost entirely on credit to the phony distribution company, which never passed along the money for the calls that were actually made with the cards.''
The card features a cartoon beach scene with a giant coke bottle and two men trying to open it. The release of this card surprised many collectors, most only finding out when checking what phonecards were available at their local shop. A definite must for any Coca-Cola thematic collector.
From Daniel Clark
MCI's sponsorship begins this month with the release of the first of five custom-designed prepaid phone cards. The second card will be released in March, cards three and four, respectively in May and June. The fifth and final card in the series is set for release on September 18, 1997, the official anniversary of the Air Force. Each card depicts an era of Air Force aviation history.
"This sponsorship offers MCI an excellent opportunity to visibly show our support of the Air Force," said Richard Borakove, Branch Manager, MCI Government Markets. "The prepaid cards not only commemorate the legacy of the Air Force, but also give the Airmen a way to call home wherever they touch down."
The 25-minute cards can be purchased through U.S. Air Force Services facilities worldwide and from the Army & Air Force Exchange Service's Base Exchange (AAFES/BX) locations. Collectors and the general public will have an opportunity to buy these cards at U.S. Air Force air shows and open houses throughout the year. Each card retails for $5.00.
MCI will play an integral role in the launching of this Air Force Services program at Lackland Air Force Base, San Antonio, Texas, on March 1, 1997, which will take place in conjunction with a ceremony honoring the Tuskegee Airmen. Named for the Alabama Army Air Field where they received their training, the Tuskegee Airman were the first African-American pilots in the Army Air Corps. More than 50 Tuskegee Airmen will be present for this 50th Anniversary celebration.
"We are pleased to offer these commemorative cards to our Air Force personnel," said Col C. Barry Long, Director of Programs, Air Force Services Agency. "Not only do they feature beautiful aviation photography, but they offer potential savings on long distance calls. Competitive sponsorships, such as MCI's, make programs like this possible."
From: Michael F. Horton
From: Jeffrey Whisler
From: Cathy Ashbaugh
That’s all for this week,
Alan
2) Direct e-mail. Send a message to: phoneline@cardmall.com
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