On October 27, 2009, Eufora, LLC was issued a U.S. Patent covering aspects of their prepaid debit card “credit builder” features. The patent is U.S. Patent No. 7,607,570 and is titled: “Methods of Establishing Credit”. The patent, apparently, relates to techniques used by Eufora in their Eufora Elite Credit Builder line of cards.
No press release was issued by Eufora (at least as far as we can tell), so the patent quietly issued without any announcement. Here is a quote from the Abstract of the patent:
A method for building credit may include providing an authorized user of a pre-paid card issued by a service provider. The service provider may charge the authorized user a fee for the pre-paid card and establish a loan loaning the authorized user an amount equal to the fee under loan terms specifying a repayment schedule. The repayment schedule may include periodic installments and a minimum amount due for each of the periodic installments, where the loan may be independent from the load applied to the pre-paid card. The authorized user repays the loan in accordance with the loan terms so as to create a credit history. The service provider may report the credit history to a credit bureau to improve a credit score of the authorized user.
While it is unclear whether such patents are enforceable, it appears that the patent covers the use of prepaid debit card accounts where the card is issued to a card holder in exchange for a fee, and then a loan is issued “loaning the authorized user an amount equal to the fee under loan terms specifying a repayment schedule including periodic installments and a minimum amount due for each of the periodic installments, the loan being independent from the load applied to the pre-paid card; and the authorized user repaying the loan in accordance with the loan terms.”
If interested, you can read the whole patent here.