Registers – Systems controlled by data bearing records – Credit or identification card systems
Reexamination Certificate
1999-04-28
2001-11-13
Le, Thien M. (Department: 2876)
Registers
Systems controlled by data bearing records
Credit or identification card systems
C705S041000, C705S039000
Reexamination Certificate
active
06315196
ABSTRACT:
FIELD OF THE INVENTION
The present invention relates generally to the field of computerized debt deferment systems and, more particularly, to a system for automatically implementing and tracking a credit protection program.
BACKGROUND OF THE INVENTION
Credit insurance is currently available to protect the credit rating of credit card holders who are unable to make timely payments on their credit card accounts because of unforeseen circumstances such as disability, involuntary unemployment, family leave and death. Generally, such insurance makes payments to the insured cardmember's account and otherwise keeps the cardmember's credit account in good standing. Such credit insurance is relatively expensive and is heavily regulated.
There is a need for a credit protector program in which a cardmember can enroll for a small fee which provides for deferment of interest, fees, payments or adverse credit reporting on the cardmember's credit account during periods of unemployment, disability, hospitalization or family leave, and which operates in conjunction with the existing automated and computerized financial systems of a financial institution.
SUMMARY OF THE INVENTION
It is an object of the present invention to provide an automated or computerized credit protector system that includes files that are communicated to an administrator for the system that keeps track of cardmembers that are activating the deferment benefits of the system.
It is a further object of the present invention to provide a computerized credit protector system in which accounting of cardmembers who activate the benefits of the credit protector can be maintained in the financial institution's existing mainframe or other computer system.
It is another object of the present invention to provide such a system in which, when a cardmember activates the benefits of the credit protector, the mainframe or other system of the financial institution includes an indication that the credit account cannot be used during the duration of activation.
It is an additional object of the present invention to provide a system that interacts with existing hardware of the financial institution, such as a mainframe computer, in a seamless manner, so that customer service representatives of the financial institution are able to maintain their excellences in servicing cardmembers.
The method of the present invention is as follows. A cardmember enrolls in the program referred to as credit protector program and pays for the program monthly. The payment required is based on a fraction of the amount of credit protection provided, such as 49 cents per $100 of credit extended. After a predetermined term of participation in the program, for example a period of seven years, assuming that the customer has not activated the benefit of the program at any time during the seven years, the customer receives the benefit of the credit protector program for free for the remainder of the time that the customer's enrolled credit card account remains open. The customer no longer has to pay for the benefit of the credit protector.
In an embodiment of the present invention, the credit protector allows a cardmember to pay a fee, for example, of about 49 cents per $100 in average outstanding balance. The cardmember pays in a fee charge each month up to a maximum amount, such as $24.50 per month. Under the method of the present invention, if, during any time that the cardmember is in the program, the cardmember becomes involuntarily unemployed, disabled, hospitalized, or takes family leave, the cardmember can activate the benefit of the program for the enrolled credit card. In activating the benefit, the cardmember's account is frozen, and the cardmember does not have to pay any interest, any fees, or pay the institution extending credit any of the balance of the credit for the time that the cardmember has activated the benefit.
Thus, a benefit of the present invention is that the cardmember does not need to worry about paying the account during the time of benefit activation. Additionally, the activation protects the customer's credit rating on the credit card because during the time of activation of the benefit, no negative information is reported to any credit bureau about the customer; thus, from the credit bureau standpoint, the customer remains in good standing.
The present invention further provides a system that allows customers to enroll in the program in a number of different ways. Customers are able to enroll when they actually sign up for a credit card. Customers are able to enroll via solicitations made to cardmembers, for example, through the mail, over the phone, or with their billing statements. Customers also have the opportunity to enroll when they are issued their new cards: credit cards typically expire every couple of years, and when customers are physically sent new cards, they are given the opportunity to enroll in this program.
In an embodiment of the present invention, at any time that the customer needs to activate the benefit, the customer makes a phone call to an 800 number and speaks with an administrator of the program for the institution providing the benefit. Depending upon the customer's situation, the administrator may activate the customer on the phone—if the customer is able to prove to the administrator's satisfaction that the customer really has the support documentation for whatever it is they are articulating as their reason for activation. Alternatively, the customer is asked to submit paperwork prior to activation; for example, additional prior confirmation can be required, if necessary (e.g., involuntarily unemployed, disability, family leave, and/or hospitalization).
In an embodiment of the present invention, when a customer actually enrolls in the program, it is noted on their file systematically (e.g., electronically in a computer system), and the customer is sent all the information necessary and a welcome kit. In addition, the customer receives a simple agreement detailing the benefits of the program.
An embodiment of the present invention operates in conjunction with existing automated financial systems. Thus, when a customer benefit is activated, the system assures that when the customer receives a credit card bill or statement, the statement indicates that the customer owes the institution nothing in terms of their balance due for that month. However, the overall amount that the customer owes in total still remains; the statement just contains a zero minimum due for the given month when the benefit is activated. Therefore, the amount that the customer owes is essentially deferred, and no interest or fees are added to the amount that is owed while the customer is in activation. All of this information is automatically accounted for in the system so that customer service functions and other functions run smoothly, and when the customer calls the institution, service representatives know what the status of the account is.
As a result, if the customer is actually in activation, and even if not in activation, service representatives know that the customer is enrolled in the credit protector program. Additionally, the institution is able to account for the number of months when a customer is enrolled in the credit protector program, so that when the customer reaches a certain number of months, such as the 84-month mark, which is equivalent to seven years of being in the program, the customer is told that he or she is eligible and will receive the benefits of the program for free for the remainder of the enrollment as a customer, assuming that the customer's account remains in good standing.
An embodiment of the present invention includes an automated or computerized system. The system includes files that are communicated to an administrator for the system who keeps track of customers that are activating. For example, this accounting of customers may be maintained in an institution's existing mainframe system. Thus, when a customer benefit activates, the mainframe s
Citibank N.A.
Kilpatrick & Stockton LLP
Le Thien M.
Marcou George T.
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