T O S H I B AT O S H I B A Fraud & Disputes – Know Who You Are Trading With

T O S H I B AT O S H I B A Agenda Card design security features Types of Fraud Account Management Features Reporting Tools Communication/Partnering Efforts

T O S H I B AT O S H I B A Fraud loss rates (as a percentage of sales dollars) for commercial card products are historically lower than the same rate for all card products (i.e., consumer accounts) $1 for every $20,000 in purchases Commercial Card Fraud Now For the Good News...

T O S H I B AT O S H I B A Card Design Security Features Hologram Stylized Logo Tamper-evident signature panel (CVC2) Unique magnetic stripe coding (CVC1)

T O S H I B AT O S H I B A Fraud Types Lost/Stolen Mail Theft/Non-Receipt Unauthorized Use Counterfeit Card Skimming

T O S H I B AT O S H I B A Lost/Stolen 50+% of all fraud Perpetrator not sophisticated May know cardholder address, date of birth and social security number Generally does not have false identification Various types of spending

T O S H I B AT O S H I B A Mail Theft/Non-Receipt New account or replacement card recently mailed Perpetrator slightly more sophisticated Will know cardholder address, usually does not know date of birth and social security number Generally does not have false identification In-store purchases or mail/telephone order

T O S H I B AT O S H I B A Unauthorized Use Transactions are made without an actual plastic via mail or telephone orders Perpetrator is more sophisticated Adult or Internet-type transactions

T O S H I B AT O S H I B A Counterfeit Card Credit card has been manufactured Security features will not be present or authentic Poor quality of embossing Sophisticated perpetrator False identification used Often found within organized fraud rings

T O S H I B AT O S H I B A Skimming Magnetic stripe is compromised Card has been manufactured Identification matches with a false name embossed on credit card Sophisticated perpetrator - organized fraud rings Enhanced security features deter perpetrators

T O S H I B AT O S H I B A Account Management Features Transaction Activity Monitoring Fraud vs. Abuse Fraud Types Abuse Types Validation Process Contacting Agency Program Coordinators

T O S H I B AT O S H I B A Reporting Tools Pathway Net Reports 161, 511 Transaction View query TBR 400 Report Cash Advance Report Specific MCC Exception Reporting

T O S H I B AT O S H I B A Fraud Detection System Criteria for queues based on current fraud trends Reacts to request for authorization Queues are populated with authorization “hits” on criteria Queues can be defined for specific MCCs, dollar amounts, states/countries, etc.

T O S H I B AT O S H I B A Fraud Detection System Detection cases are reviewed by a security representative Cardholder or Program Coordinator is contacted to validate activity Accounts may be temporarily suspended until activity is validated Account analyzed by history, previous spending patterns, type of transaction, recently issued card

T O S H I B AT O S H I B A Communication/Partnering Efforts When should local APC be contacted? When should national APC be contacted? What further steps can be taken to enhance transaction monitoring queues?

T O S H I B AT O S H I B A Dispute Resolution Information & Tips

T O S H I B AT O S H I B A Chargeback Flows Issuing Bank Acquiring Bank 30 Days 45, 60, 120,180 Days 45 Days 45 Days U.S. 90 Days Non-U.S. 60 Days Non-US electronic filing. Presentment Usage Code 1 Usage Code 2 2nd Presentment 1st Chargeback Arbitration Chargeback Usage Code 3 45 Days

T O S H I B AT O S H I B A Top 10 Chargeback Reasons 58%No Cardholder Authorization 2% Requested/Required Authorization Not Obtained 4% Duplicate Processing 4% Canceled Recurring Transactions 3% Request Transaction Information Not Received 3% Expired Card 3% Services Not Rendered 3% Credit Not Processed 2% Non-Receipt of Merchandise 2% Account Number not on File

T O S H I B AT O S H I B A Chargeback Tip - Disputes Cardholder should contact merchant to resolve dispute Cardholder must tender return of merchandise Quality of service requires supporting documentation Issuers may assist with cancellation of recurring payments on behalf of the cardholder

T O S H I B AT O S H I B A Chargeback Tip - Timeframe Cardholder - Notify dispute department within 60 days from the date on statement where first presentment of incorrect charge appears Bank One - 60 days for resolution on basic dispute types Merchant - 30 days to validate charge prior to a reversal - 45 days from our last reversal to validate

T O S H I B AT O S H I B A Chargeback Tips - Unauthorized Charges Signed letter or for fraud Account number on letter must match chargeback record Lost/Stolen affidavit is acceptable if last used date is listed and is prior to fraud transaction date Category level 2 (automated gas pump) chargebacks allowed if not counterfeit Letter from agency representative