Targeted Data  Integrated Solutions  Modeling & Analytics Equifax intelligence ® Data Security & Privacy DMNYC Luncheon, May 11, 2006 Chris Lynde – SVP DMS Sales What You Need to Know Your Worst Nightmare Data contained in this presentation provided by FTC, DMA, Forrester, CMO Magazine and Internet Alliance

Targeted Data  Integrated Solutions  Modeling & Analytics Equifax intelligence ® A Chronology of Data Breaches  Prior to CA’s required breach notification act, which went into effect July 1, 2003, there have been public reports of 97 breaches of consumer data –Regulated financial banking records –Non-regulated customer name and address records –Pre & post graduate educational records –Children’s services records –Federal deposit insurance records –Commercial insurance records –Retail sales transaction records –Travel transaction records –Utilities, Telco, Cable records –Wire transfer records –US Department of Defense records –World Economic Forum attendee records And this is just what was reported! Slide 1

Targeted Data  Integrated Solutions  Modeling & Analytics Equifax intelligence ® Database Security Breaches Post 2/15/05 According to the Privacy Rights organizations…There have been 157 Breaches affecting nearly 55M individuals in the U.S. since the 2/15/05 watershed “best practice” announcement: from ChoicePoint that pro- actively disclosed the affected individuals, in effect adopting California’s law requiring notification on a national level.  There were over 9 million victims of identity theft last year - and the average victim spent 28 hours and $5,686 to resolve their case. (Javelin Strategy & Research, 2005)  One out of every four American families are affected by identity theft. (Fraud Resource Group 2005)  $50B+ nation-wide problem! Slide 2

Targeted Data  Integrated Solutions  Modeling & Analytics Equifax intelligence ® Recent Increase in Privacy Initiatives  Security breach continues to be the #1 Internet and Info industry issue in the United States  Media reports concerning theft of consumer data have brought consumer information privacy to the forefront of the congressional agenda  166 bills introduced in 38 states – 23 have passed data breach notification legislation.  Expect state-by-state expansion on the restrictions imposed by the California Notification Law  Expect to move downstream to unregulated data – name, address, city, state, zip  Expect more notification bills in the states – federal law is being debated by congress.  Expect enforcement of DMA’s new authentication rule adopted 2/1/2006  FTC will continue to test the boundaries of its enforcement powers in the privacy and protection arena What to expect… Slide 3

Targeted Data  Integrated Solutions  Modeling & Analytics Equifax intelligence ® The legislative Landscape  FTC reported in February 2005 that identity theft accounted for a staggering 39% of all fraud complaints nationwide  Major new consumer data security legislation is in the making  Senate legislation has already been introduced that would appropriate $60 million in funding to create a national identity theft center under the oversight of the FTC  More drastic measures are unlikely, but still on the table.  Marketers who think the new laws will affect only data brokers and criminals are sadly mistaken.  Other regulations are possible: at a recent House Committee of Financial Services hearing, lawmakers were actively contemplating expanding Gramm-Leach-Bliley to all industries that touch consumer financial information, including any firm that accepts payment by credit card.  A North Dakota law, enacted in June of 2005, states that companies that conduct business in the state must disclose the theft of any customer information —including name, address, and telephone number. Slide 4

Targeted Data  Integrated Solutions  Modeling & Analytics Equifax intelligence ®  Forrester believes that most consumer firms are operating in blissful ignorance of the laws that will soon land on their doorstep. But just as Sarbanes-Oxley rocked the world of the CFO, CMOs at consumer marketing organizations have no choice but to:  Take notice  Participate in creating federal regulation  Tighten up data security infrastructure and processes  Create notification policies  Review data sharing policies Wake up – A freight Train is Heading our Way What Proposed Data Laws Will Mean for Marketers Slide 5

Targeted Data  Integrated Solutions  Modeling & Analytics Equifax intelligence ® Costs to Companies Under Attack  It’s not just the financial implication – it’s your reputation and the industry as a whole!  A look at just a few of the recent headlines making the news $15M Record Fine for Data Breach - ChoicePoint Case Spotlighted ID Theft MasterCard: 40M Credit Card Accounts Exposed FTC settles with CardSystems over data breach – Company must adopt security measures, undergo audits LexisNexis Data Breach Bigger Than Estimated 310,000 Consumers May Be Affected Microsoft Settles FTC Charges Alleging False Security and Privacy Promises Ralph Lauren, HSBC in data breach debacle California reports massive data breach Slide 6 Paris Hilton’s cell phone hacked WANT TO STAY OUT OF THE SPOTLIGHT?

Targeted Data  Integrated Solutions  Modeling & Analytics Equifax intelligence ® Become Good Stewards of Consumer Data  Commit to and implement industry best practices –Know how your data/lists are used –Employ physical, administrative and technical safeguards –Encrypt all data transmissions and use secure physical transport –Seed all files and audit usage  Make your voices heard and support DMA lobbying efforts  Write your congressmen, senators and postal representatives – reinforce the integrity of our industry and let them know what you’re doing to protect the consumer  Understand the shifting landscape and support innovative ideas required to drive continued growth and performance  Always look after the best interest of our clients and their customers  Become good consumer advocates and champions of consumer data  Always provide consumer access to privacy policies and opt-outs What You Can Do… Slide 7

Targeted Data  Integrated Solutions  Modeling & Analytics Equifax intelligence ® Ethical Issues and the Future of our Industry  It’s up to us to re-build consumer trust –Our industry is under attack – need to unite and take a leading stance –Be proactive, not reactive –Encourage all list owners, marketers, brokers and managers to join Equifax in following industry best practices Infrastructure Security Data Encryption & Armed Delivery Identity Theft Monitoring Services Consumer Notification Services Slide 8

Targeted Data  Integrated Solutions  Modeling & Analytics Equifax intelligence ® Targeted DataIntegrated SolutionsMarketing & Analytics  Equifax Intelligence Thank You!