1. 21/01/03 Paymentech proprietary and confidential information By John Florinis, Scotiabank As presented to FCA 240 at Seneca March 2003 www.paymentech.net Hackers on the Rise 82,094 reported instances in 2002 52,658 in 2001 and 21,756 in 2000 (Source: CERT, 2003)) 55% increase – How many go unreported? Symantec reported 689 attacks on FI’s 48% of those attacks were severe (Source: Symantec, 2003) Symantec reported 616 attacks on e- commerce merchants 19% of those attacks were severe (Source: Symantec, 2003)

2. 21/01/03 Paymentech proprietary and confidential information By John Florinis, Scotiabank As presented to FCA 240 at Seneca March 2003 www.paymentech.net Hackers 24% of hacker attacks are intended 76% are opportunistic (Symantec, 2003) Hackers fall into 2 groups: Thrill Seekers – hack for the challenge Professionals – usually work for foreign governments and organized criminal gangs

3. 21/01/03 Paymentech proprietary and confidential information By John Florinis, Scotiabank As presented to FCA 240 at Seneca March 2003 www.paymentech.net Credit Card Fraud Projected Visa fraud in Canada is over $92 million 330,686 fraudulent transactions Average sale = $105.91 Average loss = $278.83 <1% of transactions are fraudulent Internet fraud accounts for 5% ($4.6 MM) of Visa Canada’s total fraud loss Source: Visa Canada

4. 21/01/03 Paymentech proprietary and confidential information By John Florinis, Scotiabank As presented to FCA 240 at Seneca March 2003 www.paymentech.net Credit Card Fraud

5. 21/01/03 Paymentech proprietary and confidential information By John Florinis, Scotiabank As presented to FCA 240 at Seneca March 2003 www.paymentech.net Credit Card Fraud

6. 21/01/03 Paymentech proprietary and confidential information By John Florinis, Scotiabank As presented to FCA 240 at Seneca March 2003 www.paymentech.net Identity Theft Definition: “Identity theft or fraud involves “stealing” another person’s identifying information, such as SIN number, DOB and mother’s maiden name, in order to to fraudulently establish credit, run up debt, and take over any financial or miscellaneous accounts, and obtain false documents” - Ariana-Michele Moore Celent Communications

7. 21/01/03 Paymentech proprietary and confidential information By John Florinis, Scotiabank As presented to FCA 240 at Seneca March 2003 www.paymentech.net Identity Theft Over 100,000 identities are stolen every year in the U.S. (Source: Celent Communications) Rising at a CAGR of 20.7% from 2002 – 2006 (Source: Celent Communications) The Internet has given criminals a new way to obtain personal information Example – Criminals created a spoof eBay site and had customers enter credit card details and personal information. Example – Job posting sites

8. 21/01/03 Paymentech proprietary and confidential information By John Florinis, Scotiabank As presented to FCA 240 at Seneca March 2003 www.paymentech.net Identity Theft

9. 21/01/03 Paymentech proprietary and confidential information By John Florinis, Scotiabank As presented to FCA 240 at Seneca March 2003 www.paymentech.net Identity Theft Impact on Financial Services Industry Over the past 5 years identity fraud has cost close to $2 billion USD. (Source: Celent Communications) Intangible loss – brand equity and consumer confidence. Increase in security spending and employee training.

10. 21/01/03 Paymentech proprietary and confidential information By John Florinis, Scotiabank As presented to FCA 240 at Seneca March 2003 www.paymentech.net Identity Theft