United States Patent [19J
`Walker et al.
`
`111111 1111111111111111111111111111111111111111111111111111111111111
`US005970478A
`5,970,478
`[11] Patent Number:
`[45] Date of Patent:
`
`Oct. 19, 1999
`
`[54] METHOD, APPARATUS, AND PROGRAM
`
`
`FOR CUSTOMIZING CREDIT ACCOUNTS
`
`Sep. 1992, vol. 78, No. 9, p. 652,
`Federal Reserve Bulletin,
`
`
`
`
`
`"Developments in the pricing of credit card services", G.B.
`Canner et al.
`JayS. Walker,
`James A .
`[75] Inventors:
`Ridgefield;
`U.P.I., Feb.S, 1992, "American
`
`Express launches new
`Jorasch,
`
`Stamford, both o f Conn.
`
`Optima card strategy", Paul Deckelman.
`Times, Oct. 18, 1996, "Consumer
`Los Angeles
`Checklist/
`[73] Assignee: Walker Asset Management Limited
`
`
`
`Kathy M. Kristof; Free Round of Talks at the Bar", Kathy M.
`Partnership,
`
`Stamford, Conn.
`part D, p. 3.
`Kristof,
`Wire, Apr. 9, 1996, "Howard I. Atkins named chief
`Business
`
`financial officer of New York Life Insurance".
`Dec. 15, 1994, "The Irvine
`Orange County Metropolitan,
`Sec. 1, p. 44.
`
`solution", Jim Callahan,
`Int. Cl. 6 ......................................................
`[51]
`G06F 17/00
`Sep. 29, 1996, "No big deal from the Pru",
`The Independent,
`
`
`
`[52] U .S. Cl. .................................. 705/38; 705/39
`705/35;
`Steve Lodge, p. 17.
`
`
`
`[58] Field of Search .................................... 705/1, 20, 26,
`May 8, 1988, "Pre-ap­
`The San Diego Union-Tribune,
`
`
`705/30, 34, 35, 38, 39; 345/326, 327, 329,
`
`
`
`proved plastic provides punch for purchasing a home",
`
`
`335, 352; 395/200.33, 200.47, 200.49
`Marsha Kay Seff, p. F-22.
`n 151, p. 9, Mar. 12, 1996, "Concen­
`Cards International,
`
`trating on quality".
`U.S. PATENT DOCUMENTS
`p. 4D, Sep. 30, 1996, "Keybank
`Plain Dealer,
`USA card
`4,724,521
`
`2/1988 Carron et a!. ........................... 395/712
`rates lower for fast bill payers".
`4,774,664
`
`
`9/1988 Campbell eta!. ...................... 364/408
`v CLXI, 187, p. 8, Sep. 30, 1996, "Key
`
`American Banker,
`5,297,026
`3/1994 Hoffman
`364/408
`.................................
`
`Corp Card: Higher Payments Mean Lower Rates".
`5,477,040
`
`12/1995 Lalonde ... ... ... .... ... ... ... ... ... .... .. 235/380
`5,513,250
`
`
`4/1996 McAllister .. ... .... ... ... ... ... ... .... ... . 379/91
`Debit Card News, v 1, n 21, p 1+, Apr. 29, 1996, "A New
`5,663,757
`
`9/1997 Morales .................................... 348/13
`
`Debit Day Dawns For Department Stores".
`
`(List continued on next page.)
`Money, Jun. 1992, vol. 21, n 6, p. 39(2),
`Beth Kobliner,
`Primary Examiner-Thomas Peeso
`
`
`"How to Get Better Deals on Loans and Credit Cards".
`
`Attorney, Agent, or Firm-Fitzpatrick, Cella, Harper &
`Money, Sep. 1994, vol. 23, n 9, p. 80(3),
`Vanessa O'Connell,
`
`Scinto; Jeffrey L. Brandt
`
`"When it Pays to Wrestle With Your Banker".
`Bee, Jul. 28, 1996, "Lay Your Cards On The
`Sacramento
`[57]
`Table", Nancy Lloyd, p. Dl.
`An apparatus, method, and program for customizing credit
`
`
`
`
`Dec. 26, 1995, "Consumers
`
`The Houston Chronicle,
`lose
`
`
`
`accounts and calculating an appropriate price for this cus­
`
`
`
`
`their way in blizzard of credit card offers", Debra Fowler, p.
`
`
`
`
`
`tomization. Customers with existing credit accounts and
`1.
`Business
`
`
`
`
`customers applying for new accounts can customize various
`Feb. 4, 1996, "Card sharks",
`
`Pittsburgh Post-Gazette, Patri­
`
`
`
`parameters of their accounts, in exchange for a fee to be
`
`cia Sabatini, p. Cl.
`
`
`
`collected by the credit issuer. The fee may depend on the
`Feb. 8, 1995, "Credit
`
`Winston-Salem Journal,
`card features
`
`
`
`particular set of parameters selected by the customer.
`
`
`
`a fixed interest rate", Mark Dillon, p. C8.
`Jan. 1996, vol. 8, No. 10, p. 13,
`
`Credit Card Management,
`
`
`"Risk-based repricing draws flak".
`
`[21] Appl. No.: 08/815,224
`
`
`
`[22] Filed: Mar. 12, 1997
`
`[56]
`
`
`
`References Cited
`
`OTHER PUBLICATIONS
`
`ABSTRACT
`
`48 Claims, 7 Drawing Sheets
`
`I BANK CENTRAL CONTROLLER 2Ql
`
`30 I
`I BANK AGENT TERMINAL
`
`I OPERATOR I
`
`Petitioner Askeladden - Exhibit 1010 - Page 1
`
`

`
`5,970,478
`Page 2
`
`01HER PUBLICATIONS
`
`v 9, n 3, p. 92+, Jun. 1996, "Here
`Credit Card Management,
`
`Come The Yankees".
`10, 1996, "Two
`Providence Journal-Bulletin, p N/A, Apr.
`
`n 347, p. 9, Apr. 24, 1996, "UK
`
`Retail Banker International,
`
`
`
`Rhode Islands banks offer credit with a philanthropic twist".
`banks are 'a bunch of clowns"'.
`& Casualty,
`Jul. 8, 1996, p.
`
`
`National Underwriter Property
`n 148, p. 11, Jan. 30, 1996, "Preparing
`Cards International,
`1, "Regulators
`
`
`Move To Curtail Two Progressive Practices".
`& Casualty,
`
`for the smart revolution: Part One".
`Jun. 17, 1996, p.
`
`National Underwriter Property
`News, v 8, n 12, p. 11, Dec. 1995, "Trust
`Bank Technology
`6, "Tech Firms Look To Secure Internet-Based
`Transac­
`
`
`Co. Leapfrogs Into Lending On The Internet".
`tions".
`n 143, p. 3, Nov. 9, 1995, "United
`Cards International,
`n 163, p. 12, Sep. 17, 1996, "Big
`Cards International,
`
`Kingdom: Two banks launch Gold Visa cards".
`
`potential in a small market".
`Week, v 2, n 32, p 1+, Aug. 5,
`n 143, p. 2, Nov. 9, 1995, "Malaysia:
`
`Asset-Backed Securities
`Cards International,
`1996, "U.S. Issuers
`
`
`
`
`
`Invade British Credit Card Market". Arab Bank launches first credit card".
`
`Petitioner Askeladden - Exhibit 1010 - Page 2
`
`

`
`
`
`U.S. Patent Oct. 19, 1999
`
`Sheet 1 of 7 5,970,478
`
`BANK CENTRAL CONTROLLER
`
`,.
`
`BANK AGENT TERMINAL
`
`30
`
`OPERATOR
`
`FIG. 1
`
`Petitioner Askeladden - Exhibit 1010 - Page 3
`
`

`
`
`
`U.S. Patent Oct. 19, 1999
`
`Sheet 2 of 7 5,970,478
`
`
`
`BANK CENTRAl CONTROllER 20
`
`f
`
`RAM
`
`ROM
`
`22
`23
`� I
`
`CPU
`Z1 -
`
`COMM.
`PORT
`22.
`
`TO BANK
`AGENT
`TERM INA l30
`
`�
`
`�
`
`MO DEM 26
`
`,...--r--
`
`__..
`
`II CLOCK
`2411 DATA STORAGE
`I DEVICE 27
`PARAMETER DATABASE ( 27A
`. ( 278
`[ PROGRAM
`27(0
`
`CUSTOMER DATABASE
`
`--
`
`FIG. 2
`
`Petitioner Askeladden - Exhibit 1010 - Page 4
`
`

`
`
`
`U.S. Patent Oct. 19, 1999
`
`Sheet 3 of 7 5,970,478
`
`VIDEO MONITOR 39
`
`-
`
`rtJ KEYBOARD 40
`'"'� �
`
`BANK AGENT TERMINAL 30
`
`f
`
`MOUSE 41
`
`TO BANK
`CENTRAL
`CONTROLLER
`20
`
`VIDEO
`DRIVER
`18.
`
`RAM
`
`ROM
`
`I
`
`I
`
`CPU
`31 1-
`
`COMM.
`PORT
`
`35
`
`MODEM 36
`
`� DEVICE 37
`
`DATA STORAGE
`
`,.--
`�----
`
`-- - -- --------
`
`--
`
`I� PROGRAM 0 37(
`
`FIG. 3
`
`Petitioner Askeladden - Exhibit 1010 - Page 5
`
`

`
`U.S. Patent Oct. 19, 1999
`
`Sheet 4 of 7 5,970,478
`
`PARAMETER DATABASE 27A
`
`f
`
`M ONTHLY CREDIT GRACE PAYMENT LATE
`ACCOUNT INTEREST TIME
`IDENTIFIER RATE
`PERIOD OF MINIMUM LIMIT PERIOD AMNESTY FEES
`INTEREST PAYMENT
`RATE
`
`FIG. 4
`
`Petitioner Askeladden - Exhibit 1010 - Page 6
`
`

`
`
`
`U.S. Patent Oct. 19, 1999
`
`Sheet 5 of 7 5,970,478
`
`CUSTOMER DATABASE 27B
`
`f
`
`NAME
`
`ADDRESS SOCIAL
`ACCOUNT ACCOUNT CUSTOMER
`SECURITY IDENTIFIER BALANCE RATING
`NUMBER
`
`FIG. 5
`
`Petitioner Askeladden - Exhibit 1010 - Page 7
`
`

`
`
`
`U.S. Patent Oct. 19, 1999
`
`Sheet 6 of 7 5,970,478
`
`CUSTOMER CONTACTS BANK AGENT
`
`St
`
`,,
`
`CUSTOMER PROVIDES CUSTOMER
`INFORMATION
`
`S2
`
`,,
`
`CUSTOMER SELECTS NEW CREDIT CARD
`PARAMETERS
`
`S3
`
`n
`
`BANK AGENT ENTERS NEW PARAMETERS
`
`AND CUSTOMER INFORMATION INTO
`BANK AGENT TERMINAL
`S4
`
`n
`
`NEW PARAMETERS AND
`CUSTOMER INFORMATION
`TRANSMilTED TO BANK CENTRAL
`CONTROLLER
`S5
`
`FIG. 6
`
`Petitioner Askeladden - Exhibit 1010 - Page 8
`
`

`
`
`
`U.S. Patent Oct. 19, 1999
`
`Sheet 7 of 7
`
`5,970,478
`
`BANK CENTRAL CONTROLLER RECEIVES
`
`CUSTOMER INFORMATION AND CREDIT CARD
`PARAMETERS FROM AGENT TERMINAL
`ill
`+
`BANK CENTRAL CONTROLLER RETRIEVES
`
`CUSTOMER PARAMETERS RELATING TO THE
`CUSTOMER INFORMATION ill
`
`BANK CENTRAL CONTROLLER CALCULATES
`PRICE OF NEW ACCOUNT BASED ON CREDIT
`CARD PARAMETERS AND CUSTOMER
`PARAMETERS ill
`
`ACCOUNT PRICE TRANSMmED TO
`CUSTOMER
`
`n
`
`ACCOUNT PRICE
`�
`ACCEPTABLE?
`
`YES
`
`CUSTOMER
`TOLD TO
`-N_O ---11� REVISE CREDIT
`CARD
`PARAMETERS
`S18
`
`CUSTOMER CREDIT CARD BILLED FOR COST
`OF NEW ACCOUNT
`
`BANK CENTRAL CONTROLLER
`STORES NEW ACCOUNT
`PARAMETERS IN CUSTOMER
`DATABASE
`
`S17
`
`FIG. 7
`
`Petitioner Askeladden - Exhibit 1010 - Page 9
`
`

`
`5,970,478
`
`SUMMARY OF 1HE INVENTION
`
`1
`METHOD, APPARATUS, AND PROGRAM
`
`
`FOR CUSTOMIZING CREDIT ACCOUNTS
`
`2
`dom to change the terms of existing accounts is even more
`
`
`
`
`
`severely limited, as described above. In fact, under the
`
`
`
`
`existing system, it is impossible for certain customers to
`BACKGROUND OF THE INVENTION
`
`
`
`obtain all of the account terms that they desire.
`The present invention relates generally to the field of 5
`
`
`
`
`
`
`While a customer can obtain new terms by switching to a
`
`
`new account, this can cause inconvenience in a number of
`
`
`
`
`credit accounts. More specifically, it relates to a method,
`ways.
`
`
`
`apparatus, and program for modifying the terms of existing
`
`
`
`credit accounts and customizing the terms of new credit
`First, the customer is inconvenienced by applying for the
`
`
`
`
`
`
`
`accounts to meet specific customer needs.
`
`
`
`
`new account and closing the old account. Second, the
`the world for 10 Credit accounts are widely used throughout
`
`
`
`customer is inconvenienced because he must switch any
`
`
`
`
`
`
`
`
`automatic payments that he has authorized (e.g., payment of
`
`
`
`
`non-cash payments for goods and services. Typically, the
`
`
`
`
`his utility bill) to the new account. Third, if the card holder
`
`
`
`authorized user of the account is issued a card and account
`
`
`
`neglects to switch an automatic payment, he may be incon­
`
`number that can be used to charge purchases to his account.
`
`
`
`
`venienced or embarrassed by interrupted service or delivery
`
`
`
`
`The credit card issuer (e.g., a bank) pays the merchant, and
`15
`
`
`
`
`of an item that he expects to receive. Further, because the
`
`the card holder then pays the card issuer. The issuer's
`
`
`terms of the new account are predetermined, the customer
`
`
`
`
`revenues are received by charging the merchant a fee for
`
`may not be happy even after he has switched to a new
`
`
`
`
`
`each transaction, and charging the card holder periodic fees
`
`
`account. The new account may not have the type of credit
`
`and interest on unpaid balances.
`terms that he wants.
`
`
`
`
`cards 20 From the card issuer's perspective, issuing credit
`For customers with bad credit, the situation is even worse.
`
`
`
`
`
`
`can be a very profitable business. A good customer can
`per year. As a result,
`
`
`
`While customers with good credit histories are able to
`
`
`generate hundreds of dollars of revenue
`
`
`
`
`switch to new accounts, customers with poor credit histories
`
`
`
`card issuers want to keep as many of their customers as they
`
`
`
`may be unable to qualify for the standard terms of any credit
`
`
`can. This is especially true for their best customers. Card
`As a result,
`
`
`
`card issuer. the customer is unable to open a new
`
`
`
`in the hopes of 25 issuers also want to attract new customers,
`
`
`account, and is forced to continue with the terms of his
`
`
`generating additional revenue.
`
`
`
`existing accounts. Worse yet, customers with weak financial
`
`
`
`
`Credit card issuers have traditionally tried to attract new
`
`
`
`
`credentials may be unable to qualify for any credit card. This
`
`
`
`customers by advertising in banks and places of business,
`
`
`
`
`can have significant drawbacks when trying to obtain goods
`
`
`
`and by sending offers to potential customers by mail. The
`
`
`or services typically available only with the use of a credit
`
`terms (or parameters) of these offers vary. For example,
`30
`
`
`card, such as renting a car. Not having a credit card can also
`
`
`
`
`
`various credit card accounts offer different combinations of
`
`
`preclude many forms of commerce now widely practiced,
`
`
`
`
`interest rates, credit limits, and annual fees. Many of these
`
`
`
`
`such as ordering merchandise by telephone. Indeed, the
`
`
`
`
`offers promise the customer a low introductory interest rate
`
`
`
`desirability of having credit cards will only increase with the
`
`for a relatively short period of time, such as six months.
`
`
`growth of commerce over the Internet, a medium in which
`
`
`Other offers promise rewards for card usage such as rebates
`35
`
`
`
`physical exchanges of currency are not possible.
`
`
`
`on products (e.g., GENERAL MOTORS), cash rebates (e.g.,
`
`
`
`
`DISCOVER), or frequent flyer miles (e.g., AMERICAN
`
`
`
`AIRLINES/CITIBANK). Until now, credit card issuers have
`One aspect of the invention is a data processing apparatus
`
`
`
`
`
`
`
`typically relied on this relatively limited range of product
`
`
`
`for pricing a credit account having at least one customer­
`to 40
`
`
`
`differentiation in combination with traditional advertising
`
`
`
`
`
`specified credit parameter. This apparatus includes a CPU
`
`
`
`
`distinguish their accounts from competitor's offerings. To
`
`
`
`and a memory containing a program, to be executed by the
`
`
`
`the best of our knowledge, credit card issuers have never
`
`
`
`
`CPU, for receiving the credit parameters and calculating a
`
`
`
`tried to attract new customers by offering customizable
`
`
`price for a corresponding credit account.
`
`
`accounts, in which the customer is free to choose the terms
`Another aspect of the invention is a method of pricing a
`
`
`
`
`
`
`
`of the account, as a means to distinguish their product from 45
`
`
`
`
`credit account having at least one specified credit parameter.
`the competition.
`
`
`The method includes the steps of receiving the credit
`
`
`
`
`Perhaps more importantly, credit card issuers have never
`
`
`
`parameters, calculating a price for a corresponding credit
`
`
`
`
`offered customizable accounts to retain existing customers
`
`
`account, and outputting the price.
`
`
`that are about to switch to a competitor's card. In fact, until
`Other aspects of the invention include a computer pro­
`
`
`
`
`
`
`
`now, no effective way has been devised for a credit card 50
`
`
`gram and an apparatus corresponding to the method
`
`
`
`
`issuer to retain an existing customer who is about to switch
`
`
`described above, and an embodiment using a central con­
`
`to a competitor's card.
`
`
`
`troller and a number of agent terminals. Additional aspects
`
`
`
`
`The existing mechanisms for retaining customers are very
`
`
`
`
`of the invention are directed to the central controller and the
`
`
`
`limited. In certain cases, banks have been known to waive an
`the 55
`
`agent terminal individually.
`
`
`
`annual fee at the request of a card holder, or even reduce
`The invention provides numerous advantages to both
`
`
`
`
`
`
`
`interest rate of an account. But these cases are relatively rare,
`
`
`
`
`
`credit card issuers and credit card holders, by providing a
`
`
`and there are no automated mechanisms known to us for
`
`
`
`
`method, apparatus, and program for customizing the terms
`
`
`determining when and how to make an adjustment to the
`
`
`
`of credit accounts, for both new and existing customers.
`
`
`account terms in order to retain a customer.
`card 60
`
`
`
`
`The invention benefits credit card issuers because it
`
`
`In addition to the problems faced by the credit
`
`
`
`
`enables them to attract new customers by offering custom­
`
`
`
`
`
`issuers, customers (i.e., the card holders) face a separate set
`
`
`
`
`ized credit card accounts that meet the customer's needs. It
`
`
`
`of problems. Customers with good credit histories often
`
`
`may even be used to attract new customers that might not be
`
`
`receive numerous offerings to sign up for new credit cards.
`
`
`
`able to qualify for credit cards with more traditional terms.
`
`
`
`But while customers are free to seek out an account with
`have always been faced 65
`
`
`
`For example, a card issuer may be willing to issue a credit
`
`terms that they desire, customers
`
`card with a low credit limit and a high annual fee to people
`
`
`with a yes/no decision for each account-there is no way to
`
`with poor credit histories.
`
`
`
`
`specify the exact parameters desired. The customers' free-
`
`Petitioner Askeladden - Exhibit 1010 - Page 10
`
`

`
`
`
`BRIEF DESCRIPTION OF THE DRAWINGS
`
`5,970,478
`
`4
`3
`The invention also benefits credit card issuers by enabling
`
`
`
`
`controllers may be modified to incorporate the present
`
`
`
`
`
`
`them to retain existing customers and reduce account attri­
`
`
`invention in various ways, such as by adding an additional
`
`
`
`tion. If a customer calls to cancel his account, the card issuer
`
`
`
`
`file server (with or without a CPU dedicated to credit card
`
`
`may be able to rewrite the terms of the customer's existing
`
`
`
`
`customizing transactions). Alternatively, the present inven-
`5 tion may be implemented
`
`
`
`account and thereby entice him to stay.
`
`
`using existing hardware entirely,
`
`
`
`by making appropriate software updates at an existing
`
`
`
`
`The invention also benefits credit card issuers by provid­
`
`
`
`
`central controller and existing agent terminals,in accordance
`
`
`ing them with an opportunity to charge a fee for changing the
`
`
`
`with the present invention as taught below.
`
`terms of a customer's account.
`
`
`
`Alternatively, although not so depicted in FIGS. 2 and 3,
`By enabling the card issuers to attract new customers and
`
`
`
`
`
`
`
`10 a stand-alone system can be implemented in a single loca­
`
`
`
`
`retain existing customers, the invention can provide the card
`
`
`
`tion by combining the functions of the agent terminal and the
`
`
`issuer with more opportunities to make a profit. This is
`
`
`
`
`central controller, and eliminating the communication links
`
`
`
`
`particularly important when the invention is used to retain
`
`and redundant hardware.
`
`
`customers that generate large profits for the card issuer.
`FIG. 2 is a block diagram of a preferred central controller
`
`
`
`
`
`The invention benefits credit card holders by enabling
`
`
`
`15 20. The central controller includes a CPU 21 that performs
`
`
`them to find a card with credit terms that they desire, and to
`
`
`
`
`the processing functions of the controller. It also includes a
`
`
`modify those terms as their needs change. For example, the
`
`read only memory 22 (ROM) and a random access memory
`
`
`
`invention can be used by a card holder who is worried about
`23 (RAM). The ROM 22 is used to store at least some of the
`
`
`
`rising interest rates to lock in a fixed interest rate for a given
`
`
`
`program instructions that are to be executed by the CPU 21,
`period of time.
`20 such as portions
`
`of the operating system or BIOS, and the
`
`
`
`
`The invention also benefits credit card holders by elimi­
`
`
`RAM 23 is used for temporary storage of data. A clock
`
`
`
`
`nating the problems, described above, of switching to a new
`
`
`
`
`circuit 24 provides a clock signal, which is required by the
`
`
`card to obtain credit terms that they need.
`
`CPU 21. The use of a CPU in conjunction with ROM, RAM,
`
`
`
`
`Further advantages and features of the invention will be
`
`
`and a clock circuit is well known to those skilled in the art
`25 of CPU-based
`
`
`
`apparent to those skilled in the art upon an examination of
`
`
`electronic circuit design.
`
`
`
`
`the following detailed description of preferred embodiments
`
`
`
`The central controller 20 also includes a communication
`
`
`taken in conjunction with the accompanying drawings.
`
`
`port 25 which enables the CPU 21 to communicate with
`
`
`
`
`
`devices external to the central controller 20. In particular, the
`
`
`
`communication port 25 facilitates communication between
`30 the modem 26 and the CPU 21, so that information arriving
`FIG. 1 is an overall system block diagram of a preferred
`
`
`
`
`
`embodiment of the present invention.
`
`from the modem 26 can be processed by the CPU 21, and the
`
`
`CPU 21 can send information to remote locations via the
`
`
`
`FIG. 2 is a block diagram of the central controller of FIG.
`modem 26.
`1.
`
`
`of FIG. 1. 35 While the illustrated embodiment uses a modem 26 to
`FIG. 3 is a block diagram of the agent terminal
`
`
`
`
`
`
`communicate with devices outside the central controller 20,
`
`
`FIG. 4 is a table depicting a preferred set of fields for the
`
`
`it should be understood that other methods of communicat­
`
`
`parameter database of FIG. 2.
`
`
`
`ing with external devices may be used instead of a modem.
`FIG. 5 is a table depicting a preferred set of fields for the
`
`
`
`
`
`
`These other methods include hard-wired connections, radio
`
`
`customer database of FIG. 2.
`40 communications,
`
`
`optical communications, and the like.
`
`
`FIG. 6 is a flow chart depicting initiation of account
`
`CPU 21 can also store information to, and read informa­
`
`customization in the agent terminal.
`
`
`tion from, a data storage device 27. This data storage device
`
`
`FIG. 7 is a flow chart depicting the operation of the central
`
`
`
`27 includes a parameter database 27a and a customer
`controller.
`
`
`
`database 27b, which are described below. In addition, it
`
`
`
`by 45 includes a program 27c, which can be read and executed
`
`
`the CPU 21, thereby controlling the operation of the central
`
`
`
`controller 20. While FIG. 2 depicts separate parameter and
`
`
`
`
`customer databases, a single database that incorporates both
`FIG. 1 depicts the flow of information for customizing a
`
`
`
`of those sets of data can also be used.
`
`
`
`
`pre-existing credit card account in accordance with the
`
`present invention. In this embodiment, a bank central con-50
`
`
`
`FIG. 3 is a block diagram of a preferred agent terminal30,
`
`
`
`
`
`
`
`troller 20 is linked to at least one bank agent terminal 30.
`
`which can be located at a bank branch or office, by way of
`As discussed
`
`
`
`
`Although a single agent terminal is depicted in FIG. 1, any
`example.
`above, there can be any number of
`
`number of agent terminals can be used. The link between
`
`
`
`
`agent terminals 30 linked up to one central controller 20.
`
`
`
`each agent terminal30 and the central controller 20 need not
`
`
`
`Like the central controller 20 described above, the agent
`
`
`
`be a physical link-each can, for example, be linked via
`
`
`a CPU 31, ROM 32, RAM 33, and a 55 terminal 30 includes
`
`
`modem, as described below, or any other appropriate com­
`
`
`
`clock circuit 34. The agent terminal 30 also includes a
`
`
`
`
`munications channel. A transaction can be initiated from any
`
`
`communication port 35 which interfaces with a modem 36
`
`
`one of the agent terminals 30. The information required to
`
`
`
`that facilitates communication between the agent terminal
`
`
`implement the transaction is passed between the agent
`
`
`
`
`30 and the central controller 20. Of course, instead of the
`
`
`
`terminal 30 and the central controller 20, until the transac­
`60 modem 36 depicted
`
`in FIG. 3, methods of communication
`tion is complete.
`
`
`
`can be used, as described above for the central controller 20.
`
`
`
`A standard computer, such as an IBM-compatible PC or an
`
`
`The system depicted in FIG. 1 may be embodied in
`
`
`
`Apple Macintosh, running appropriate software, may be
`
`
`
`
`hardware specifically provided to implement the present
`
`
`
`used as the agent terminal. Existing terminals, currently
`
`
`invention. Alternatively, the system may be implemented
`
`65 being used for other functions in banks, may also be used.
`
`
`
`using hardware and infrastructure that may already exist to
`
`
`link terminals in banks (or other locations) to a central
`
`
`
`The agent terminal30 also includes an input device in the
`
`
`
`controller being used for other purposes. Existing central
`
`
`form of a keyboard 40 and a mouse 41, connected to receive
`
`DETAILED DESCRIPTION OF THE
`
`PREFERRED EMBODIMENTS
`
`Petitioner Askeladden - Exhibit 1010 - Page 11
`
`

`
`5,970,478
`
`5
`6
`holder; the grace period, which is a period following a
`
`
`
`
`
`input from an operator. Any of a wide variety of alternative
`
`
`
`purchase during which interest does not accrue; payment
`
`
`input devices would also be suitable for this purpose
`(including,
`
`
`
`amnesty, which records the number of times a customer is
`
`for example, touchscreens, digitizing tablets,
`
`
`and the like). The input device may interface
`
`
`permitted to skip a monthly payment which is inconvenient
`trackballs,
`5
`
`to pay; and a late fee, which is a fee that is charged when a
`directly with the CPU 31, as shown in FIG. 3. Alternatively,
`
`
`
`customer does not pay his bill on time.
`
`an appropriate interface circuit may be placed between the
`
`
`
`CPU 31 and the input device.
`Parameter database 27a is preferably indexed by the
`
`
`
`
`
`
`
`
`
`The agent terminal30 also includes a video monitor
`
`
`
`account 39 for identifier, linking parameter database 27a with
`
`conveying information to the operator.
`
`
`
`customer While the preferred database 27b. Of course, the invention is not
`
`
`
`
`
`
`10 limited to the parameters described above, and alternative
`video monitor 39 is a CRT, other video display devices,
`
`
`
`parameters may be used.
`
`
`including LCD, LED, and thin film transistor panels, may be
`
`
`used as well. Individual indicators may also be used to
`FIG. 7. is a flowchart of the operation of the central
`
`
`
`
`
`convey information to the operator, including incandescent
`20 (which, along with other hardware
`controller
`described
`and neon lamps, LEDs, and the like. A video driver 38
`
`
`below, is depicted in FIG. 2). The steps of the process shown
`15 in FIG. 7 may be implemented in a computer program
`39 (or to any
`
`interfaces the CPU 31 to the video monitor
`
`
`27c
`device).
`other type of video display
`
`
`
`that may be installed at the central controller 20 from a
`
`
`
`The agent terminal 30 also includes a data storage device
`
`
`
`
`computer readable medium and then stored therein in the
`
`
`
`37, in which a program 37c is stored. This program includes
`
`
`
`data storage device 27. Alternatively, the program 27c may
`
`
`instructions that can be read by and executed by the CPU 31,
`
`be installed in the ROM 22 or the RAM 23.
`20
`
`
`
`
`thereby controlling the operation of the agent terminal 30.
`First, in step Sll, the central controller 20 receives the
`
`
`
`
`
`
`
`FIG. 6 depicts the initiation of a transaction at an agent
`
`
`
`
`credit card parameters and customer parameters that were
`
`
`terminal. The steps of the process of FIG. 6 are performed
`
`
`
`transmitted from the agent terminal30. The central control­
`30 (which, along with
`at an agent terminal
`other hardware
`
`
`
`
`ler 20 retrieves the customer parameters corresponding to
`in FIG. 3). These steps may
`(which is preferably
`
`
`an
`25 the received customer information
`be
`
`described below, is depicted
`) in step S12. These retrieved
`
`implemented in a computer program that may be installed at
`
`
`
`account identifier
`customer
`
`the agent terminal 30 from, for example, a computer read­
`
`
`
`
`
`
`parameters are preferably stored in the customer database
`able medium (such as a floppy disk or CD-ROM) and then
`27b.
`device 37 (such as a hard disk
`
`stored in the data storage
`A preferred set of customer parameters for existing cus-
`
`
`
`
`drive). After being installed,
`
`the program 37c can run from
`30 tamers is depicted
`
`
`in FIG. 5. These parameters are stored in
`
`
`
`the data storage device 37. Alternatively, the program 37c
`
`
`
`customer database 27b. This set includes each customer's
`As yet
`
`
`
`can run directly from the computer readable medium.
`(such as a credit
`
`
`name and address; an account identifier
`card
`number); social
`
`
`
`another alternative, not shown in the figures, the computer
`number (which is commonly
`security
`used
`records); the
`
`
`
`
`program may be installed at the central controller 20 from a
`
`
`
`to identify individuals on their credit history
`
`
`
`
`computer readable medium and then stored therein in one or 35
`(indicating
`
`account balance the amount of money that the
`owes to the card issuer)
`more of ROM memory 22, RAM memory 23 and the data
`customer
`
`; and a customer rating.
`
`
`storage device 27, for access and use by the agent terminals
`
`
`
`
`The customer rating rates the credit of the customer. This
`as required.
`
`
`
`could be based on a customer's past payment history for the
`
`
`
`account in question. Alternatively, it could be based on
`
`
`
`
`The process starts when a customer contacts a bank agent
`40 information
`
`
`
`
`in step Sl. The customer provides customer information in
`
`
`
`obtained from a credit reporting agency such as
`
`
`step S2. Preferably, this customer information includes an
`
`
`
`
`TRW or EQUIFAX. The credit rating could also be based on
`
`account identifier that uniquely specifies a particular credit
`
`
`
`
`
`
`other factors such as the customer's income. A three-level
`
`card account. The customer selects the new credit card
`
`
`
`
`
`
`customer rating of good, average, and bad may be estab-
`
`
`
`lished based on any of the above-mentioned factors, and
`parameters that he wants to have in step S3. These param­
`
`limit and 45
`
`
`
`then stored in the customer database 27b. Of course, the
`
`
`
`eters include, for example, the interest rate, credit
`
`
`
`
`invention is not limited to the parameters described above,
`
`
`
`
`monthly minimum payment. This information is entered by
`
`
`and alternative parameters may be used.
`
`the bank agent into the agent terminal 30 in step S4. The
`
`
`
`
`credit card parameters and the customer information are then
`Returning now to FIG. 7, the central controller 20 then
`
`
`
`
`
`
`transmitted to the central controller 20 in step S5.
`
`
`
`calculates the price of modifying the account in step S13
`
`
`
`
`Alternatively, the information can be entered by the cus-50
`
`
`
`based on the credit card parameters received from the agent
`
`
`tamer directly into a suitable terminal.
`
`
`
`terminal along with the customer parameters from the cus-
`
`
`
`
`
`
`
`Each of the steps S1-S5 described above is executed by tomer database 27b. For example, a customer requesting a
`
`
`
`
`
`
`the CPU 31, which executes a program 37c stored in the data lower interest rate and lower minimum payments might be
`
`
`
`
`storage device 37. The communication with the central charged a fee of twenty dollars.
`port 35 and 55
`
`controller 20 takes place via the communication
`
`
`One example of calculating a price based on some of these
`the modem 36.
`
`
`parameters, and the effects of each of those parameters on
`
`
`
`FIG. 4 depicts a preferred the price, set of parameters pertaining to is described below.
`
`
`(1) The Interest
`each credit account. These parameters are stored in the
`
`
`
`Rate:
`
`
`
`
`parameter database 27a. When the customer selects the
`Decreasing the interest rate on the card will result in less
`
`
`
`60 revenue
`
`
`parameters in step S3 of FIG. 6, he selects from the available
`
`
`for the card issuer, so the customer will have to pay
`
`
`
`
`
`
`
`parameters. The preferred parameters include: the interest a premium for lowering the interest rate. A base price due to
`
`
`
`
`
`rate that is charged on unpaid balances; the time period of the change in interest rate can be computed by multiplying
`
`
`
`
`
`
`the interest rate, which is the amount of time for which the the decrease in interest rate by the expected average monthly
`
`
`
`
`
`interest rate must remain fixed; the monthly minimum balance for the customer by the expected life of the cus-
`65 tamer.
`
`
`
`payment, which will typically be a percentage of the out­
`standing balance; the credit limit, which is the maximum For example, a customer who wants to lower his interest
`
`
`
`
`
`
`
`rate by 2%, and who carries
`of $500, and
`
`amount of credit that the issuer will extend to the card
`
`an average balance
`
`Petitioner Askeladden - Exhibit 1010 - Page 12
`
`

`
`5,970,478
`
`6 months
`1 yr
`2 yr
`
`110%
`120%
`130%
`
`Payments lower by 30%
`Payments stays the same
`Payments increase by 30%
`
`120%
`100%
`80%
`
`7
`8
`
`
`
`who has an expected customer life of 3 years, will result in
`
`customer rating from the customer database (shown in FIG.
`
`
`
`
`
`the following base:
`
`
`
`5). For example, the price may be tripled for customers with
`
`
`
`
`a bad credit rating, doubled for customers with an average
`Base=2%x$500x3=$30
`
`
`
`
`credit rating, and left unchanged for customers with a good
`
`(2) The Time Period of the Interest Rate:
`
`5 credit rating.
`
`Interest rates which are fixed over a long period of time
`
`
`Once the price information has been calculated, it is
`
`
`
`
`
`will result in greater exposure to adverse changes in market
`
`
`
`transmitted to the customer in step S14.
`
`
`
`
`rates, therefore the price for changing parameters will
`
`
`In some instances, the price of modifying the account may
`
`increase as the length of the fixed period of coverage
`
`
`
`be zero. For example, if a customer wants to increase his
`
`
`
`mcreases. The following multipliers for example may be
`
`
`
`10 minimum monthly payments by 30%, the credit card com­
`used:
`
`
`pany may modify his account for free. A card issuer may
`
`
`even be willing to pay a customer to change the terms of his
`
`
`account when the new terms are more profitable for the
`
`
`
`
`issuer. Thus, the phrase "calculating the price", or equivalent
`
`
`
`
`15 phraseology used herein to describe an exchange of value
`
`
`for a change in credit terms, contemplates not only the
`(3) The Monthly Minimum Payments:
`
`
`
`computation of a price to be paid by the customer, but also
`
`
`
`Smaller minimum payments will tend to increase the risk
`
`circumstances in whic