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Platinum Level Lost AccountForensics Analysis for Equifax

Client: Fingerhut Services: InterConnect Size: $4 Million per Year

Investigation Dates: February 19, 2010 (COO), March 2, 2010 (Credit Business Analyst), March 8, 2010 (VP New Customer and Fraud Strategy), March 16, 2010 (SVP Chief Credit Officer) and March 17, 2010 (IT Project Manager) Report Delivery Date: March 23, 2010 LINKS TO REPORT SECTIONS Section One: Executive Summary

Fingerhut’s requirements and summary of findings Section Two: Conclusions and Recommendations

Recommended actions to improve performance and status rating Section Three: Detailed Analysis In-depth analysis of Equifax’s perceived performance Section Four: Verbatim Comments from Decision-Makers Respondents’ remarks for deeper insight into critical perceptions LINK TO THE FORENSICS DASHBOARD View this and all other reports by clicking on the link below and then entering your password and user name: www.askdashboard.com

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Gain a competitive advantage through knowledge Sales and Account Forensics is a unique and powerful tool to help you sell and manage your accounts more effectively. We built this report on the open feedback we obtained from senior prospects and account decision-makers, so you possess direct insights into their candid perceptions and opinions that shape how and why they do business with you…or, as the case may be, don’t do business with you. You will likely:

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Use this report as a learning tool with your team. If there’s a problem and you take a punitive approach, you’ll compromise the benefits you can achieve.

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If this is an AccountForensics report, it may be constructive to establish an open dialogue with your client on what you learned from this report. This can “change the level of conversation” you are presently having and strengthen your position.

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Executive Summary

FINGERHUT’S REQUIREMENTS

Control and speed of making changes to score models.

One of the main things we were looking for was speed to market when making a change to score models. We need to put more of the changes in our hands as far as making strategy changes on our own. (Credit Business Analyst)

Guidance to grow Fingerhut’s business and flexibility to use multiple credit reporting companies.

I think we were looking for new ways to help us grow our business. We needed more flexibility to pull from different credit bureaus and we needed a better fail-over process. (Credit Business Analyst)

Enhanced user friendliness in the platform.

…and more business user-friendly than what they were seeing with InterConnect. (Credit Business Analyst)

Ability to support the individual credit strategies of Fingerhut’s 5 new brands using the same credit platform.

The substantial changes were first that we are going from a single brand to a multi brand company. We launched a new brand last year and we have aspirations to launch four new brands in the future. Each new brand will have a different credit strategy. (SVP Chief Credit Officer) All of these brands would come back to the same credit platform. There wouldn’t be independent systems for each brand. (SVP Chief Credit Officer)

Ability to offer different and segmented credit products through up-selling and cross-selling.

The second change is launching new products. In a given brand we had just one credit product. We need to up-sell or cross-sell depending on the segment the different credit products. (SVP Chief Credit Officer)

Section One

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Support Fingerhut’s web-centric model by providing credit strategies for customers accessing Fingerhut’s web site who were not solicited or pre-approved.

The third change would be that we were predominately a catalog, pre-screen driven growth company but now we are making web-centricity as a much bigger part of our growth journey in the future. How do we make sure that folks who apply for credit over the web are handled and made into a bigger part of our growth journey? (SVP Chief Credit Officer) We need to make sure that we have the right credit strategies for people who come to the website but were not solicited or pre-approved. We need to support their aspirations for purchasing from Fingerhut and Bluestem. (SVP Chief Credit Officer) As we launch new brands and for our existing brand we need to have the ability to integrate and roll out new models. (SVP Chief Credit Officer) We need to integrate that and test it relatively quickly. Even if you were in a single brand business we would want to do that as a core functionality as well. (SVP Chief Credit Officer)

Comprehensive technical support that is application specific and knowledgeable.

From an IT perspective you need to have a regular contact who knows the product I am working with and knows the application of that product. They need to assist in technical issues with that application or with problems in the system or getting files transmitted to us. We need comprehensive support from them. (IT Project Manager)

Provide partner level strategic guidance to grow Fingerhut’s business.

We need a partner who can bring vision and strategic forethought to the table. What can they suggest that we do different to try and grow? (VP New Customer and Fraud Strategy)

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EXECUTIVE SUMMARY OF FINDINGS

Prevailing Themes Fingerhut’s Executives Fingerhut’s Managers Equifax’s Strategic View Equifax lacked a strategic, consultative, comprehensive, and “life cycle” view of Fingerhut. Further, the account team did not grasp Fingerhut’s growth goals. Fingerhut wanted Equifax to proactively make suggestions and this didn’t happen. When they were made, it was too late. Equifax’s contract limited the ability to easily source other bureaus, and Fingerhut’s attempts to change this were put off. Strategic dialog has improved given that the “right parties” are involved in the relationship. Equifax, however, still has a culture that is a “bit rigid”.

Lack of Strategic View Lacks consultative, “comprehensive

view”. Account team “never seemed to

grasp” growth objective for Fingerhut’s total business. Contract restricted flexibility with

other bureaus. Not responsive to requests to use

other bureaus until contract renewal – stifled conversations. Did not have “life cycle” view of

relationship and this affected understanding of Fingerhut’s broader strategy of new accounts and collections. While strategic dialog improved,

there were “gaps” in the past. Post InterConnect relationship

improved given “right parties involved”. Culture still a “bit rigid”. Not “fully vested” or “mature

enough” to be technology driven.

Equifax’s Strategic Support Fingerhut wanted Equifax to

propose strategic ideas – “some things fell down”. Equifax did not propose ideas or

new platform. InterConnect 3.0 had limitations. Improvements suggested at “the

11th hour”.

The InterConnect Platform Equifax failed to demonstrate long term commitment to InterConnect. There was concern it would be discontinued or not kept current. Further, 4.0 had few users. Experian’s platform has more functionality and capabilities. InterConnect requires more steps to accommodate changes, and tech support was needed to modify score cards. Offering innovative scoring techniques would have increased Equifax’s value.

Mixed Signals and Deficiencies Equifax not clear on “long term

vision and commitment” to InterConnect. InterConnect did not support “rapid

deployment”. Concern InterConnect would be

discontinued or not updated. InterConnect’s competitiveness

diminished by not keeping platform up-to-date and having few users. Experian’s platform has more

features and functionalities. InterConnect required extensive

steps for changes – not as easy to configure as Experian’s platform. Offering innovative scoring

techniques to address risk and identify target segments would have made Equifax more valuable.

Ability to Use Other Reporting Agencies Fingerhut required ability to “flip

a switch to go to another bureau” to grow business. Limitations realized during recent outage. Contract required using Equifax

first before accessing TransUnion or Experian. This was “cumbersome”, costly and a “sore spot”. Modifying score cards required

tech support from Equifax. InterConnect 4.0’s enhanced

rules engine met Fingerhut’s functionality requirements. Annual updates met Fingerhut’s

functionality requirements. Equifax “headed in the right

direction”.

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Equifax’s contract impeded flexibility to use other bureaus. This was “cumbersome”, costly, and a significant “sore spot”. InterConnect was headed in the right direction. Annual updates met functionality needs and the 4.0 version met Fingerhut’s requirements.

Equifax did not follow-through on changes in 2008 and InterConnect’s value was overstated. These caused “value to fall off”. New Fingerhut employees could

see deficiencies tenured ones could not.

Fingerhut wanted “more control” and “flexibility” to customize user interface.

Equifax’s Sales/Account Team and the Sales Process The RFP was triggered by InterConnect’s functionality limitations and inability to implement new risk models and campaign strategies. As Fingerhut was growing, the company needed a “comprehensive solution”. Had Equifax been proactive, the RFP could have been avoided. Equifax failed to understand Fingerhut’s concerns and did not offer improvements. This created an “expectation mess”. Equifax’s claims on the numbers of users did not hold up to Fingerhut’s scrutiny. This was “problematic”. Further, references were not relevant because they did not use InterConnect in ways Fingerhut would. Experian’s references, in contrast, were on-target. Equifax changed its sales/account team as Fingerhut brought in new executive leadership. The relationship “never gelled” and value diminished. Equifax’s new account team did not attempt to build a relationship with Fingerhut’s new leadership

Fingerhut’s Dissatisfaction and the RFP Process “Gap appeared” once Fingerhut

had clarity on “future roadmap” and software functionality. RFP triggered by “dissatisfaction”

with InterConnect’s “speed to market” and functionality limitations. Speed to market incorporated implementing new risk models and new campaign strategies. Fingerhut “evolved as a company”

and sought a “comprehensive solution”. RFP could have been avoided with

proactive discussions and upgrades. “An expectation mess” resulted

from Equifax not understanding concerns and not suggesting action plan.

Equifax’s Sales and Account Management Team Account team did not keep

Fingerhut in the loop and there was “big confusion” over what was communicated versus reality. This was “problematic”. A “big problem” was that the

number of users cited did not match Fingerhut’s findings. Equifax changed the account team

at the same time Fingerhut changed senior management. Relationships “never gelled” and “things broke down”. Equifax

Equifax’s Value Proposition Equifax “failed to sustain value”

in relationship after changes in sales/account team and Fingerhut’s exec team. Changes created “comedy of

errors” – “set-up for a perfect storm”. Enhanced communications “grew

to be expected” as Fingerhut expanded exec team. Fingerhut’s new exec team

canceled the weekly calls with Equifax when they first came on board. Fingerhut wanted communication

and ideas from Equifax. Hand-off between all teams was

“cumbersome”; both sides responsible.

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team, and enhanced communications grew to be expected as executives were added. The COO was never courted, prompting this executive to state that his tenure was marked by a “broken relationship with Equifax”. Proactively offering ideas and best practices, along with building relationships, would have taken Equifax to a much higher level. Eventual suggestions prompted Fingerhut to question why they weren’t offered sooner.

missed issues. COO’s tenure marked by “broken

relationship with Equifax”. Sales team was not proactive, had

inconsistent communications, and did not build relationships with senior Fingerhut execs. No attempt was made to meet them, especially the COO with whom Equifax used to have a strong relationship. Equifax’s eventual suggestions

prompted Fingerhut to wonder why they were not offered earlier. Achieving “world class” support

would require proactive ideas to generate revenue and reduce costs, providing best practices, and building relationships. Relationships are improving,

prompting more business to remain with Equifax than planned.

Equifax’s References InterConnect 4.0 addressed

concerns but references were not provided that supported claims. References were not relevant to

Fingerhut – they didn’t use InterConnect for “rapid modeling changes”. Fingerhut requested “relevant set

of references” and Equifax failed to deliver. Fingerhut could not tell if 4.0 would

meet requirements based on references. Experian’s references were in-line

with what Fingerhut wanted – using latest version, had capabilities Fingerhut wanted, and in similar industry.

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Equifax’s Technical Support and Relationship Equifax’s technical support was highly valued. The team was willing to make changes, understood requirements and goals, and was very knowledgeable and responsive. The relationship deteriorated with the personnel changes in both companies.

Equifax’s Technical Support was Very Strong “Very positive” interaction and

strong relationship with Fingerhut. Willing to make changes. Understood requirements and

expectations to support growth and risk management. Technical team shared Fingerhut’s

requirements with the account team.

Equifax’s Value Proposition CFTs provided “the best

experience”. Responsive, knowledgeable, and supportive. Tech support was “excellent”. Relationship not the same since

Equifax changed sales and account team.

Insights into Experian Experian was positioned as analytic and technical. The company is initiating a strong market strategy that is more consultative. Experian had many users of its platform in applications that were relevant to Fingerhut. The platform is “data agnostic” and “more mature”. This allowed Fingerhut to be flexible and more efficient. In contrast, InterConnect’s functionality would need to be developed. Experian’s team was “higher performing”, strategic, flexible, engaged, connected, and proactive. In contrast, Equifax’s strong analytical team was not integrated with the strategy team. Experian’s platform’s strengths notwithstanding, Equifax’s technical team was responsive and the rules editor is much easier than Experian’s.

Experian’s Platform and Proven Capabilities Experian had many customers on

the platform in relevant applications. “Confidence” in Experian’s strong

market and proven ability. “Concerned” about problems with

4.0 and being the only user “pushing” for changes. Experian’s platform less expensive

and time intensive to accommodate changes in score cards than 3.0. InterConnect 4.0 met requirements

but would not allow easy use of other bureaus. Experian’s platform does.

Competitive Comparisons Equifax’s strong analytical team not

integrated with strategy team to deliver comprehensive solution. Experian’s account team “higher

performing” and strategic. Experian positioned as an “analytic

and technology business”. Experian is “data agnostic” and

their platform “more mature”, enabling Fingerhut to be flexible and “avoid duplicate work” Decision based on usability versus

long term direction”. Experian provided “functionality on

Experian Very Engaged More flexible and engaged for

“strategic solutions”. “Easier to work with” to achieve

goals. Fingerhut has more responsibility

but is apprehensive about change due to “control”. Equifax rated high for

responsiveness. Equifax’s rules editor “more

straight forward” than Experian’s.

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a proactive basis” versus functionality that would need to be developed. Experian’s team “more engaged,

connected, and proactive” – a “huge plus”. Experian is “sending the right

messages” to all levels. Experian is building a “very strong

market strategy with a more consultative approach”.

Overview of Titles and Names As Used in this Report

Title Name Executives

Chief Operating Officer Ray Frigo Senior Vice President, Chief Credit Officer Saby Sengupta Vice President, New Customer and Fraud Strategy Ted Rogers

Managers Credit Business Analyst Connie Thomsen IT Project Manager Diania Hook

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AskForensics Conclusions and Recommendations While Fingerhut’s RFP was triggered by InterConnect’s deficiencies and Equifax’s lack of providing proactive and sustained strategic support, the reasons for losing the InterConnect business with Fingerhut also encompassed sales and account actions and relationships; inappropriate references; and untimely management turnover in both companies. With this understanding, it’s now paramount to fortify Equifax’s remaining business in Fingerhut and InterConnect installations in other accounts. Fortify Equifax’s Remaining Business with Fingerhut Achieve and sustain a strategic, partner level relationship for Equifax’s remaining business at

Fingerhut. Equifax should proactively offer insights and recommendations to grow Fingerhut’s business. This level of dialog could provide a springboard to re-launch InterConnect, and other services, at Fingerhut.

Continue with the highly professional platform transition. This has already improved Equifax’s standing in Fingerhut and has resulted in Equifax retaining more business than Fingerhut intended.

Maintain technical relationships with Fingerhut’s operating team. Fingerhut highly valued Equifax’s CFTs. Moving forward, Equifax would be well served to:

o Share information on platform enhancements. While Experian’s platform is a superior strategic fit, the user teams have distinct preferences toward InterConnect.

o Offer beta programs in contained applications, such as to strategically support specific Fingerhut brands.

Continue to engage, and broaden relationships with, senior Fingerhut executives. Involve

Equifax’s senior leadership when appropriate and schedule senior level meetings at least every 6 months. Emphasis should be upon the COO, and Equifax should solicit this executive’s recommendations on initiating relationships with other executives (make the COO a champion). Use this analysis as a pretext to meet at a very senior level. This can establish a different level of strategic and partner level dialog.

Conclusions and Recommendations

Section Two

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Strategically Fortify and Expand Other InterConnect Accounts Demonstrate a financial and strategic commitment to InterConnect.

Schedule strategic level meetings with senior leadership at each client. The focus should be to

identify emerging concerns and opportunities. Using this knowledge, Equifax should then initiate focused action plans where Equifax’s teams are held accountable for follow-through and results.

When accounts are going through high level transition, Equifax should carefully assess account assignments and minimize transitions that could impact relationships and knowledge. Consistency and seamlessness take on more importance when there are significant changes in client executive teams.

Strategically select and provide reference accounts that truly reflect each prospect’s business model and applications.

Establish a corporate system/template that incentivizes account teams to be continually proactive and innovative. This requires a thorough and strategic understanding of each customer’s business model.

Reinforce on-going collaboration between Equifax’s CFTs and the account teams to identify emerging issues and to immediate address concerns and opportunities.

Proactively address account issues before clients initiate RFPs. The issues that caused Fingerhut’s defection from InterConnect were avoidable. Consideration should be given to:

o Accounts coming up for scheduled evaluation/renewal. o Evergreen accounts where problems could be brewing. o Critical customers that Equifax cannot afford to lose.

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Executives’ Insights: Equifax’s Strategic View 1. Equifax’s lack of strategic vision: Equifax needs a more consultative and “comprehensive

view” of Fingerhut’s business. Understanding Fingerhut’s growth goals would enable Equifax to provide suggestions to achieve those goals. “They need to step back and help us understand what they can do to help us to that next level.” Equifax’s account team “never seemed to grasp” Fingerhut’s objective to grow the total business. Equifax focused on “what was the next thing they could sell”, and not responsive to using other bureaus. While not regretting the earlier decision to select InterConnect, Fingerhut did not see “eye-to-eye” with Equifax or discuss the platform’s long term direction with Equifax. When introducing new platforms, Equifax would improve its effectiveness by first running existing data through the proposed solution and demonstrating the enhanced results. This would alleviate Fingerhut from “trying to figure out” how new tools fit in with the company’s business model.

There was a “pretty big gap” in Equifax recognizing Fingerhut’s opportunities. Equifax’s contract impeded Fingerhut’s flexibility to use other bureaus without incurring penalty fees. Equifax “always wanted to stifle those conversations” about resolving this until contract renewal. “Short-term revenue objectives cost Equifax a long-term relationship.”

While strong tactically, Equifax’s sales and account team had “gaps” on the “strategic engagement

and relationship” relating to transparency on the “roadmap” and functionality. Fingerhut and Equifax, however, have forged a new “level of engagement” for strategic dialog and understanding. Equifax now realizes the need to focus on the relationship component instead of just the technical side.

Equifax did not have a “life cycle” view of the relationship and this created a gap in understanding

Fingerhut’s broader strategy of new accounts and collections, and where Fingerhut was heading. Equifax’s lack of a “comprehensive solution” made it difficult for Fingerhut. A more bundled approach is easier for handling multiple requirements, such as management and collections.

The post InterConnect engagement with Equifax has been improved by having the “right parties involved” from business and cross-functional areas, meeting on a regular basis (likely quarterly), and including executive level participation to ensure an understanding of direction and priorities. While Equifax appears to be “more willing to look at things through a different lens”, it “seems to be” engrained in Equifax’s culture to “be a bit rigid”. While Equifax wants to be more technology driven, the company isn’t “fully vested” or “mature enough” to have this position in Fingerhut.

Section Three

Overall Findings, Analysis and Conclusions The Details

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Equifax needs a more consultative and “comprehensive view” of Fingerhut’s business. Understanding Fingerhut’s growth goals would enable Equifax to provide suggestions to achieve those goals. “They need to step back and help us understand what they can do to help us to that next level.”

I think there is an opportunity to engage more as a consultant. They could understand more what our growth goals are, and they need to step back and think what ideas they could suggest to us to achieve those goals. They could look at me, my peers, and the senior leaders above me and tell us what they would do if they were in our shoes. They need to bring that thought process to the table. They need a more comprehensive view. They need to step back and help us understand what they can do to help us to that next level. (VP New Customer and Fraud Strategy)

Equifax’s account team “never seemed to grasp” Fingerhut’s objective to grow the total business. Equifax focused on “what was the next thing they could sell”, and not responsive to using other bureaus.

Although we had multiple discussions around it they never seemed to grasp it. It was more about what was the next thing they could sell versus recognizing that the more volume we could create the more money they would make. They weren’t responsive to wanting to help grow in ways that might force us to use another bureau’s data, for example. (VP New Customer and Fraud Strategy)

While not regretting the earlier decision to select InterConnect, Fingerhut did not see “eye-to-eye” with Equifax or discuss the platform’s long term direction with Equifax.

At the time I think it was a good decision to go with Equifax. I don’t question that. I just don’t know that we ever saw eye-to-eye or talked more with each other in terms of where we were going and where the product was going. (COO)

There was a “pretty big gap” in Equifax recognizing Fingerhut’s opportunities. Equifax’s contract impeded Fingerhut’s flexibility to use other bureaus without incurring penalty fees. Equifax “always wanted to stifle those conversations” about resolving this until contract renewal. “Short-term revenue objectives cost Equifax a long-term relationship.”

I didn’t feel like they were well aligned in recognizing where our opportunities were. There was a pretty big gap. They may not be able to offer every single thing we need. Their contract was structured in such a way that I had to do everything with them first that greatly impeded our growth and strategic direction. We talked about that challenge and they didn't take any proactive steps. They always wanted to stifle those conversations. They wanted to talk about these issues when the contract was over. I think that hurt them. Short-term revenue objectives cost Equifax a long-term relationship. (VP New Customer and Fraud Strategy) Everything went through Equifax’s platform and we always had to pull their data first. One of my opportunities to grow is to leverage more bureaus. If I source a prospect from a different credit bureau I still had to go get Equifax’s data first. But their data before was the one telling me not to market to this person. We would have to pay a penalty fee if we waterfall that individual to another bureau. I had to pay a penalty fee on every single person I would process is basically what would happen. That costs me more and doesn’t help me grow. They can say they are trying to align with us but actions are stronger than words. (VP New Customer and Fraud Strategy)

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While strong tactically, Equifax’s sales and account team had “gaps” on the “strategic engagement and relationship” relating to transparency on the “roadmap” and functionality. Fingerhut and Equifax, however, have forged a new “level of engagement” for strategic dialog and understanding. Equifax now realizes the need to focus on the relationship component instead of just the technical side.

I would say that the relationship was very, very good from a day to day tactical execution of our day to day strategy. There were gaps on the strategic engagement and relationship in terms of making sure that we have transparency in what the roadmap is and what the new functionality and databases are. The relationship is not just the whole InterConnect. We do quite a bit of other business with the team. That is something that was missing on both sides. We have since then course corrected. There is now a level of engagement on both Equifax’s side as well as ours to make sure that both sides have more strategic engagement. Both sides understand what the other needs. What is the focus area in terms of them helping us with our growth journey? (SVP Chief Credit Officer) There were no issues with the day to day team. It was the sales and account team that failed to have a strategic engagement with us. There were gaps where we didn’t understand where the broader strategy was headed from Equifax’s perspective. We have both recognized that gap and we just had our first meeting yesterday at the strategic level. (SVP Chief Credit Officer) There is a recognition that there needs to be more focus on the Equifax side on this relationship versus just a technical engagement. (SVP Chief Credit Officer)

Equifax did not have a “life cycle” view of the relationship and this created a gap in understanding Fingerhut’s broader strategy of new accounts and collections, and where Fingerhut was heading. Equifax’s lack of a “comprehensive solution” made it difficult for Fingerhut. A more bundled approach is easier for handling multiple requirements, such as management and collections.

I think where Equifax lags behind is on having a comprehensive solution. I call it life-cycle solutions. From a technology perspective InterConnect can do things from a new account origination perspective but there are other solutions who can handle from a life cycle perspective. The preference is for folks to use a tool that can handle the life-cycle management. It makes it easier on the client side. They don’t have to learn new tools for different aspects of the business like management and collections. That is something for Equifax to keep in mind. (SVP Chief Credit Officer) Engagement is beyond new accounts. There is account management and collections. Engagement is a life cycle function versus just new accounts. I think what led to it is probably a focus around day to day strategy versus really understanding where we were headed. (SVP Chief Credit Officer)

The post InterConnect engagement with Equifax has been improved by having the “right parties involved” from business and cross-functional areas, meeting on a regular basis (likely quarterly), and including executive level participation to ensure an understanding of direction and priorities.

They are addressing the gap by ensuring that we have the right parties involved. We have a sponsor and the right level of engagement from the business side. That is something we are doing on our side. We have cross-functional representation on the Bluestem side. In these strategy meetings we have executives from the Bluestem side rather than the day to day tactical operational team from Bluestem. That is the first correction. (SVP Chief Credit Officer) The second correction is to meet on a regular basis. We expect it to be every quarter. We have a rhythm in terms of these meetings. (SVP Chief Credit Officer) Third we want to make sure they understand where we are headed and what our priorities are. We did that yesterday and they could walk away understanding what our priorities are. Obviously on their

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side I feel it is a step in the right direction to have the same level of engagement at the executive level above and beyond the tactical team. (SVP Chief Credit Officer)

While Equifax appears to be “more willing to look at things through a different lens”, it “seems to be” engrained in Equifax’s culture to “be a bit rigid”. While Equifax wants to be more technology driven, the company isn’t “fully vested” or “mature enough” to have this position in Fingerhut.

I was trying to understand if it is ingrained in Equifax’s culture to be a bit rigid. I don’t know if it is or not. It seems to be. Since then they have been more willing to look at things through a different lens. Maybe it has been a learning experience as well. Maybe they have recognized it and are doing something about it. (VP New Customer and Fraud Strategy) I think Equifax wants to be more technology and life cycle driven, but I don’t know if they aren’t fully vested or if they aren’t mature enough in that regard to be considered there. (VP New Customer and Fraud Strategy)

When introducing new platforms, Equifax would improve its effectiveness by first running existing data through the proposed solution and demonstrating the enhanced results. This would alleviate Fingerhut from “trying to figure out” how new tools fit in with the company’s business model.

When Equifax’s is working on new data tools they need to take our data and use it in the new tool and show us the results. We can then evaluate the value of the new data or the new score. They can proactively take our data and work with the relationship manager and come back to show how the new tool can present the data. That is an effective way of engaging rather than us trying to figure out how the new tool can fit into our business model. (SVP Chief Credit Officer)

The InterConnect Platform

2. InterConnect - Mixed signals and deficiencies: Equifax “wasn’t clear what the long term vision and commitment was to the application”. “Rapid deployment” to make changes is important to Fingerhut. InterConnect’s configurability, cost, and the time required to accommodate strategy changes “compelled us to look at other alternatives”. Fingerhut was concerned InterConnect would be discontinued or not fully updated. Not keeping the platform up-to-date with many users diminished its competitiveness. InterConnect lacked features and functionalities incorporated into Experian’s platform.

InterConnect “is not particularly well parameterized”, requiring extensive steps for changes. It’s “very intensive from a project standpoint”. Competing products “tend to be much more user configurable”. Equifax did not follow-through on promised changes to InterConnect in 2008. Further, the value Equifax cited about these changes was questionable to Fingerhut. This is when “the value started to fall off”. Long time Fingerhut employees were unaware of what they were not getting. Those who joined Fingerhut from other companies, however, had “a pretty clear picture” of what InterConnect was not providing. To become a “world class” partner, Equifax would need to meet expectations, proactively offer recommendations, and provide innovative scoring techniques to address risk and identify target segments.

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“Rapid deployment” to make changes is important to Fingerhut. InterConnect’s configurability, cost, and the time required to accommodate strategy changes “compelled us to look at other alternatives”.

For us it was about the configurability, cost, and time it took to perform a change in strategies that compelled us to look at other alternatives. The score cards we create can change based on the observations we make. Rapid deployment of those changes is important to us. (COO)

InterConnect “is not particularly well parameterized”, requiring extensive steps for changes. It’s “very intensive from a project standpoint”. Competing products “tend to be much more user configurable”.

I think the InterConnect platform is not particularly well parameterized. A lot of the work to update score cards, etc., is very intensive from a project standpoint. Some of the features in competing products tend to be much more user configurable as opposed to requiring us to invest and take a long time to actually complete a score card implementation. (COO)

Fingerhut was concerned InterConnect would be discontinued or not fully updated. Not keeping the platform up-to-date with many users diminished its competitiveness.

There were concerns that the platform may be discontinued or not as updated as we would like to see it. If there are not as many users on it, then the ability to add new features and keep the platform current, up to date, and competitive starts to diminish. For us it is good to see more users on it rather than fewer. (COO)

Equifax “wasn’t clear what the long term vision and commitment was to the application”. InterConnect lacked features and functionalities incorporated into Experian’s platform.

From a tracking standpoint with respect to this application, I think it wasn’t clear what the long term vision and commitment was to the application. I think that is something they have to square away in the market. The fact of the matter is they fell behind in some ways versus Experian. That is a gap that I think they need to close. (probe) They lacked new features and functionality in the platform. (COO)

Equifax did not follow-through on promised changes to InterConnect in 2008. Further, the value Equifax cited about these changes was questionable to Fingerhut. This is when “the value started to fall off”. Long time Fingerhut employees were unaware of what they were not getting. Those who joined Fingerhut from other companies, however, had “a pretty clear picture” of what InterConnect was not providing.

I would say that there were some changes that were promised but never made in 2008 that I don’t think provided near the value that Equifax’s organization thought they were going to provide. It was a pretty substantial investment that was made. That is where I would say the value started to fall off. For the people who have been in the organization a long time and who grew up with the InterConnect, I don’t think they knew what they weren’t getting. Those of us who came in from the outside had a pretty clear picture of what other capabilities were out there that we weren’t getting. (VP New Customer and Fraud Strategy)

Meeting baseline expectations is the number one way to become world-class, followed by being proactive and offering innovative in scoring techniques “to raise our game”.

Additionally, hitting the SLAs (Service Level Agreements) and delivering against expectations is the baseline expectation, but that has to be part of it. That is probably number one and the issues with proactivity would be number two. Number three would be innovation. They need to be an innovative partner and they need to raise our game. They need to be a leader in the market. (COO)

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They need to innovate around other scoring techniques to help us further split the risk and identify those target segments that we want to go after. That is what we are looking for from a scoring standpoint. (COO)

Equifax’s Sales/Account Team and the Sales Process 3. Fingerhut’s dissatisfaction and the RFP process: A “gap appeared” with Equifax during the

RFP process once Fingerhut gained clarity on the “future roadmap and functionality of the software”. Fingerhut’s “dissatisfaction” with InterConnect’s “speed to market” and “existing functionality” limitations triggered the RFP. Fingerhut “evolved as a company” and sought a “comprehensive solution” to meet future requirements. Had Equifax initiated discussions on platform upgrades, the RFP would likely not have occurred and Equifax “would have been in much better shape” (“In my mind it should not have taken an RFP to do that.”).

Speed to market for Fingerhut encompasses implementing risk models and strategies and supporting new campaigns. Fingerhut’s expectation was “to implement very quickly”. By not proactively approaching Fingerhut with an understanding of concerns and an action plan to address them, Equifax created “an expectation mess”. As such, Equifax’s strategic alignment with Fingerhut “was moderate to low”. Equifax could have achieved world-class support through proactive suggestions to generate revenue and reduce costs, providing best practices, and building the relationship with Fingerhut.

A “gap appeared” with Equifax during the RFP process once Fingerhut gained clarity on the “future roadmap and functionality of the software”. Had Equifax initiated discussions on platform upgrades, the RFP would likely not have occurred and Equifax “would have been in much better shape” (“In my mind it should not have taken an RFP to do that.”)

I think that the gap appeared when we went through the RFP process. During the RFP we were able to understand what the future roadmap and the functionality of the software would be. In my mind it should not have taken an RFP to do that. Given that we already had an existing engagement the team could have come in and shared where things were headed and what the functionality was to be. Then we would want to recommend an upgrade to the platform. (SVP Chief Credit Officer) I think the reporting they offered up at that point could have been good but if they had been doing that proactively we would have been in much better shape and Equifax would have been in much better shape as well. (COO)

Fingerhut’s “dissatisfaction” with InterConnect’s “speed to market” and “existing functionality” limitations triggered the RFP. Fingerhut “evolved as a company” and sought a “comprehensive solution” to meet future requirements.

I think there was a bit of dissatisfaction that triggered the RFP. The speed to market of the platform we were on was an issue. I think what lead to the RFP process was that we have evolved as a company. We wanted to make sure that we were looking for a comprehensive solution that could help meet our future needs. We went into the RFP process with quite an open mind but we were clearly not happy with the speed to market as well as the existing functionality of the software. (SVP Chief Credit Officer)

Speed to market for Fingerhut encompasses implementing risk models and strategies and supporting new campaigns. Fingerhut’s expectation was “to implement very quickly”.

When I say speed to market I am talking about implementing risk models, risk strategies, and how to support new campaigns both from a pre-screen perspective and new strategies to support those campaigns including new credit models. It was our expectation is that we wanted a tool that would allow us to implement very quickly. (SVP Chief Credit Officer)

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By not proactively approaching Fingerhut with an understanding of concerns and an action plan to address them, Equifax created “an expectation mess”. As such, Equifax’s strategic alignment with Fingerhut “was moderate to low”.

I would say their alignment was moderate to low. I think there was a little bit of what I would call an expectation mess. For example, we were not happy with the speed to market. I don’t think that Equifax came to the table proactively to say that they heard our concerns and here is what you can do to meet your speed to market expectation. I would say that in that arena they were less than effective. (SVP Chief Credit Officer)

Equifax could have achieved world-class support through proactive suggestions to generate revenue and reduce costs, providing best practices, and building the relationship with Fingerhut.

I think it is a relationship where you are proactively coming forward with offers around ways we can continue to build our relationship. They can share insights they see in our business versus what they see in other companies that they support. They could help us generate additional revenue and save money. (COO)

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4. Equifax’s sales and account management team: Equifax’s account team dropped the ball on connecting Fingerhut “with the right vendors” and keeping Fingerhut fully in the loop. There was “big confusion” over what was being communicated to Fingerhut “versus what was reality”. This was “problematic”. A “big problem” was that the number of users Equifax cited did not match-up with the number Fingerhut found “when we dug into it”. The users Equifax alluded to could not be used as references.

Equifax reconfigured the account team at the same time Fingerhut made major executive changes. Equifax should have taken this into account when replacing its team members. Equifax’s previous sales team had a better relationship with Fingerhut’s senior management – “the relationship just never gelled” with the new team. It was at this level where “things broke down”. This caused Equifax to miss (or misunderstand) certain issues and this “created additional stress”.

During the COO’s one year tenure all that has been experienced “is a somewhat broken relationship with Equifax”. InterConnect lost its competitive edge and, in turn, cost Fingerhut “a lot of money and time.” If Equifax’s account team fully understood Fingerhut’s concerns this might not have happened. Once problems surfaced to the COO’s level it was too late (“breakage opens the door to new opportunities”). The Fingerhut credit team had already begun planning “other options”. The COO considered these events “unfortunate”.

Equifax’s sales team needed to be more proactive, and in particular consistent, with communications. They did not have relationships with senior Fingerhut executives. As such, Fingerhut “struggled” to get Equifax’s sales team to “think more like a consultant” and focus on Fingerhut’s goals. Equifax’s new account team did not attempt to meet all of Fingerhut’s new executives. This was most apparent with the COO. In the past, the “biggest link between the two businesses” was through this executive. Given the professed strategic relationship, Fingerhut expected Equifax’s “senior leaders”, like Dann Adams, to “reach out” and make sure there was consistency in the relationship. Equifax’s enhanced reporting resulted in Fingerhut questioning why this wasn’t being done earlier. While admitting a “breakdown on our end”, blame is placed on Equifax’s account team for not being proactive. Equifax’s account team “took the business for granted” and didn’t put in the effort to “build it and grow that relationship”. As such “they did a poor job”. Dann Adams was not getting a “complete picture” on the account team’s poor performance (“I think there was a breakdown there.”). Fingerhut’s senior executives are working to improve the Equifax relationship. During the migration away from InterConnect, Equifax’s operations and sales teams “have been incredibly professional”. This has resulted in Equifax retaining more business than originally planned.

Equifax’s account team dropped the ball on connecting Fingerhut “with the right vendors” and keeping Fingerhut fully in the loop. There was “big confusion” over what was being communicated to Fingerhut “versus what was reality”. This was “problematic”.

Some of the other deciding factors included that the account team seemed to drop the ball in terms of connecting us with the right vendors and making sure that we clearly understood where they were at with the product that we needed to be on to get the capabilities that we wanted. To some extent there was a big confusion over what they were communicating to us versus what was reality when we dug into it. That was problematic in this process. (COO)

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A “big problem” was that the number of users Equifax cited did not match-up with the number Fingerhut found “when we dug into it”. The users Equifax alluded to could not be used as references.

For example, we were told X number of users were using it but when we dug into it we found out that was really not the case and we couldn’t even check with them as references. That was a big problem for us in terms of validating the capabilities, performance, and user acceptance of the platform that they wanted us to be on. It was a much easier process with Experian. We were able to validate it very quickly. (COO)

Equifax’s sales team needed to be more proactive, and in particular consistent, with communications. They did not have relationships with senior Fingerhut executives. As such, Fingerhut “struggled” to get Equifax’s sales team to “think more like a consultant” and focus on Fingerhut’s goals.

The relationship with the sales team has been difficult because we have had transitions on both sides of the organization. I think the sales team has some pretty good folks on it. I think there is room for improvement in the form of more proactive communications. There is a lack of a relationship with the senior part of our organization. I think that the relationship on the business side had an impact on the overall decision process. It isn’t that they didn’t bring new things to the table that they were trying to sell. I think we struggled to get them to think more like a consultant and help us take full advantage of their system as we talked about what our organizational goals were. It wasn’t that they were never proactive, it was that it wasn’t consistent. (VP New Customer and Fraud Strategy)

Equifax reconfigured the account team at the same time Fingerhut made major executive changes. Equifax should have taken this into account when replacing its team members. Equifax’s previous sales team had a better relationship with Fingerhut’s senior management – “the relationship just never gelled” with the new team. It was at this level where “things broke down”. This caused Equifax to miss (or misunderstand) certain issues and this “created additional stress”.

The turnover happened at the same time in both organizations. I came in during October of 2008 and that is when they took several people off of the account. I think that hurt the relationship. If you have a major account who has just added some new players it is important to maintain consistency on your side. They should have considered if this was the right time to make the changes. Things were missed or misunderstood and that created additional stress in the process. (VP New Customer and Fraud Strategy) It is my understanding that the relationship with our senior managers was better before the change in the sales group. New people came on board on each side and the relationship just never gelled… It is with the more senior leaders of our organization where things broke down. (VP New Customer and Fraud Strategy)

Equifax made too many personnel changes at the same time Fingerhut brought on new leadership. Only one Equifax person remained on the team, and this person was not suitable for the role assigned.

To prevent the breakdown we had I would recommend to Equifax that they avoid making personnel changes on their side when their client has just made changes. The challenge there was that it wasn’t just one or two - it happened in several places. We had maybe one consistent person on the relationship and that wouldn’t have been the person I would have maintained day-to-day contact with (probe) He was fine, but for day-to-day contact, he was not technical and not senior enough. (VP New Customer and Fraud Strategy)

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Equifax’s new account team did not attempt to meet all of Fingerhut’s new executives. This was most apparent with the COO. In the past, the “biggest link between the two businesses” was through this executive. Given the professed strategic relationship, Fingerhut expected Equifax’s “senior leaders”, like Dann Adams, to “reach out” and make sure there was consistency in the relationship.

I would say that some of the Equifax folks worked to build a relationship with our senior managers but not all of them did so. We had several new C level parts of our organization and I don’t think, in some cases, there were any attempts, especially to our chief operating officer. That is where the biggest link between the two businesses used to be in the past. (VP New Customer and Fraud Strategy) In a one month period there were three major folks in the relationship that were gone. I would also say for a relationship that they presented as being strategic for them, I would have expected more of a reach-out from their senior leaders to make sure that the relationships from the past stayed in place. That didn’t happen. ) People like Dann Adams, for example. (VP New Customer and Fraud Strategy)

During the COO’s one year tenure all that has been experienced “is a somewhat broken relationship with Equifax”. InterConnect lost its competitive edge and, in turn, cost Fingerhut “a lot of money and time.” If Equifax’s account team fully understood Fingerhut’s concerns this might not have happened. The relationship “started to break down”.

They didn’t keep pace competitively with Experian’s products. As a consequence it cost us a lot of money and time to get new scoring techniques and score cards implemented. As a result it was costing us money. If Equifax had an account team who was looking at us and trying to keep us performing at our best and understanding our concerns, I don’t know that this would have happened. (probe) I am sure at some point the Equifax team did act proactively but at some level that relationship started to break down. You have to keep the context that I have been here only a year. All I have experienced is a somewhat broken relationship with Equifax. (COO)

Equifax’s enhanced reporting resulted in Fingerhut questioning why this wasn’t being done earlier. While admitting a “breakdown on our end”, blame is placed on Equifax’s account team for not being proactive.

When we met with Equifax during the RFP process they came forward and showed the different kinds of reporting they could do. I thought it was great and it begged the question ‘Why weren’t we doing this earlier?’ I think it was a breakdown on our end but it was certainly not proactive on the part of the account team. (COO)

Equifax’s account team “took the business for granted” and didn’t put in the effort to “build it and grow that relationship”. As such “they did a poor job”.

The account team took the business for granted and didn’t work hard enough to continue to build it and grow that relationship. As a consequence I think they did a poor job. (COO)

Dann Adams was not getting a “complete picture” on the account team’s poor performance (“I think there was a breakdown there.”). Once problems surfaced to the COO’s level it was too late (“breakage opens the door to new opportunities”). The Fingerhut credit team had already begun planning “other options”. The COO considered these events “unfortunate”.

I can tell you that there was a big gap between where Dann was at versus some of the people that we were dealing with. I think Dann was on top of his game, but I don’t know that he got a complete picture of how well or how poorly our account was being managed. I think there was some breakdown there. (COO)

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The problem bubbled up within our organization and by that time the damage had been done. By the time it reached my level of visibility it had gone pretty far. We started talking about our options and our capabilities and by that time the credit team had started to think about what other options were available to them. Once there is that breakage opens the door to new opportunities. That breakage occurred and opened that door. It was unfortunate. I would have just as soon have seen us stay with Equifax, but the breakage and the subsequent investigation led us to believe that we needed to make a change. (COO)

Fingerhut’s senior executives are working to improve the Equifax relationship. During the migration away from InterConnect, Equifax’s operations and sales teams “have been incredibly professional”. This has resulted in Equifax retaining more business than originally planned.

Our senior management is working through improving the relationship with Equifax. We are trying to plan quarterly meetings and I am trying to force more involvement from senior management on our side. I’ll tell you the same thing that I told some of the folks over there, I think their team on the operations side and on the sales side have been incredibly professional throughout this. I think that only helps them in the long run. We have had our challenges but I think the team has been incredibly professional. I think they have done themselves a justice in stating that they want to maintain the rest of this relationship that we have. Because of that they are keeping more business and we are swapping some of the other tools that are used. We are incorporating more of them in our process than I think we originally planned. (VP New Customer and Fraud Strategy)

5. Equifax’s references: While InterConnect 4.0 addressed Fingerhut’s concerns, Equifax did not provide references to support InterConnect’s claims. There was a “very significant gap” on the clarity of references Equifax provided. Equifax’s references “weren’t relevant” because they didn’t use InterConnect for “rapid modeling changes”. “The whole process was not well thought through and coordinated.” Fingerhut requested a “relevant set” of references using the new InterConnect platform and Equifax failed to provide this.

Experian’s references were more appropriate for Fingerhut than the ones Equifax provided. They were using the latest version, had the capabilities Fingerhut needed, and were in similar industries. Equifax’s references were firms in other industries that didn’t have the capabilities Fingerhut required.

Fingerhut would have preferred Equifax being transparent on not having references to meet Fingerhut’s specific requirements. This was the “biggest disappointment” and “not a good experience”. Fingerhut was able to “gain better insight” from Experian’s references on how their product performed because the reference companies were using it in ways Fingerhut would. Fingerhut was unable to tell if Equifax’s product would meet their requirements (“To us it didn’t seem if anyone was using the system in any way, shape, or form competitively with how we would use it today.”).

While InterConnect 4.0 addressed Fingerhut’s concerns, Equifax did not provide references to support InterConnect’s claims. There was a “very significant gap” on the clarity of references Equifax provided.

On paper InterConnect 4.0 appeared that it would address some of that concern but we ran into a challenge because we weren’t able to validate through other references that, in fact, InterConnect could do that. The references Equifax gave were in different industries that didn’t change credit profiles as quickly. I don’t think we had any references that made us feel comfortable that what it says on paper is what happens in practice with InterConnect. (SVP Chief Credit Officer) Equifax should have given a better reference to have a dialogue with. That was a very significant gap in terms of the Equifax team not having the clarity on who the actual company is that would be a good reference point for us. (SVP Chief Credit Officer)

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Equifax’s references “weren’t relevant” because they didn’t use InterConnect for “rapid modeling changes”. “The whole process was not well thought through and coordinated.” Fingerhut requested a “relevant set” of references using the new InterConnect platform and Equifax failed to provide this.

The references Equifax provided weren’t relevant. There was confusion about how long they had been using the new platform. The whole process was not well thought through and coordinated. We asked for a relevant set of companies that are on this platform and use the platform the way we would use it. (SVP Chief Credit Officer) You can give a reference of a company who was using the platform for a very simple strategy, but we are looking for the platform to make rapid modeling changes. If the reference you give me isn’t making modeling changes then that is not a relevant reference for me. (SVP Chief Credit Officer)

Fingerhut would have preferred Equifax being transparent on not having references to meet Fingerhut’s specific requirements. This was the “biggest disappointment” and “not a good experience”.

You also have to keep in mind that Equifax could have been up front and said that they didn’t have anybody who was using the functionality to the extent that we were looking for. We would have understood that. In the whole process that was the biggest disappointment. (SVP Chief Credit Officer) That was not a good experience for us. Clearly it was not well managed by the team. My recommendation for them would be to be clear about who a relevant reference would be. Make sure it is a relevant reference. If they don’t have a vendor who meets those needs then be open and transparent about that. (SVP Chief Credit Officer)

Experian’s references were more appropriate for Fingerhut than the ones Equifax provided. They were using the latest version, had the capabilities Fingerhut needed, and were in similar industries. Equifax’s references were firms in other industries that didn’t have the capabilities Fingerhut required.

The references we had for Equifax were all telecommunications and wireless companies that were using the product. They weren’t using the kind of capabilities that we need. Whereas Experian has customers that we knew were using the latest version of their product and had the capabilities that we needed and were competitive with us. (COO)

Fingerhut was able to “gain better insight” from Experian’s references on how their product performed because the reference companies were using it in ways Fingerhut would. Fingerhut was unable to tell if Equifax’s product would meet their requirements (“To us it didn’t seem if anyone was using the system in any way, shape, or form competitively with how we would use it today.”).

We were able to gain better insight in terms of how the product actually performs because they had customers using it in the same ways we would be using it. We couldn’t tell if the Equifax product would meet our needs. To us it didn’t seem if anyone was using the system in any way, shape, or form competitively with how we would use it today. (COO)

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Equifax’s Technical Support and Relationship

6. Equifax’s technical support was very strong: The Equifax operations team’s interaction with Fingerhut’s technical team “has been very positive”. Fingerhut viewed Equifax’s willingness to make changes as a “plus from an operational standpoint”. Equifax’s technical team understood Fingerhut’s functionality requirements and the expectations for the new platform to support future growth in risk management. The technical team shared this knowledge Equifax’s account team.

Fingerhut had a “very strong relationship” with Equifax’s technical team and will miss working with them. It “was unfortunate” that the account team didn’t stay connected with “key customers” within Fingerhut.

The Equifax operations team’s interaction with Fingerhut’s technical team “has been very positive”. Fingerhut viewed Equifax’s willingness to make changes as a “plus from an operational standpoint”.

I think the day to day interactions between their Equifax’s operations and our technical team and operations has been very positive. The technical team has been great. We have had no issues whatsoever there. That has been a very positive experience for us. On the project level I think they have done a nice job when we have had to make changes. That has been a plus from an operational standpoint. From an SLA (Service Level Agreement) systems standpoint, performance has been good in terms of our current experience. Those are the biggest positives. (COO)

Fingerhut had a “very strong relationship” with Equifax’s technical team and will miss working with them. It “was unfortunate” that the account team didn’t stay connected with “key customers” within Fingerhut.

I want to be sure you make the distinction between the account sales team and the technical team that worked on our business with us. The technical team and the operations team were great. We will miss working with those folks. I think the account sales team did not do a good job. I want to be sure you don’t lump all of those folks together. There was a very strong relationship that we had with the technical folks. It was unfortunate that the account management team wasn’t able to stay connected with some of the key customers within our company. (COO)

Equifax’s technical team understood Fingerhut’s functionality requirements and the expectations for the new platform to support future growth in risk management and the technical shared this knowledge with Equifax’s account team.

The most effective thing is that the (technical) team understood what we wanted in terms of our functionality. They understood what we were looking for in terms of what we expected the new tool to do in terms of handling our future growth in risk management. They were very clear in understanding what our needs were. (SVP Chief Credit Officer) I think the technical team was also effective in taking the time and demonstrating different functionalities of the software. The technical team was able to work through some use cases in terms of demonstrating that to the business (account) team. (SVP Chief Credit Officer)

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Insights into Experian

7. Experian’s platform and proven capabilities: While InterConnect 4 met Fingerhut’s requirements, Fingerhut was “uncomfortable” because they didn’t sense other customers were “live” on the new version. Experian, in contrast, “had many customers live on the product” in capabilities Fingerhut needed. It came down to “confidence” in Experian’s strong market and proven ability. Fingerhut was “concerned” about problems in Equifax’s new product and of being the only user “pushing” for changes to improve, develop, and expand the product (“We were concerned that we would be one of the bigger users who were taking advantage and stressing the system.”).

Experian’s product is much less expensive and time intensive to accommodate changes in score cards than the InterConnect version Fingerhut was using. Notwithstanding is the view that Equifax’s new version meets Experian’s performance level. InterConnect did not allow Fingerhut to use other bureaus outside of Equifax (“That was one of the issues that we were looking to address.”). Experian’s platform, in contrast, will enable Fingerhut to use scores from the 3 major providers – Experian, TransUnion, and Equifax. Fingerhut replaced the technology, not the data, with its switch to the Experian platform. By migrating to Experian’s platform, Fingerhut no longer has to “pull from a specific bureau first and then waterfall into the other bureaus”. Fingerhut uses Equifax and TransUnion data, not data from Experian.

While InterConnect 4 met Fingerhut’s requirements, Fingerhut was “uncomfortable” because they didn’t sense other customers were “live” on the new version. Experian, in contrast, “had many customers live on the product” in capabilities Fingerhut needed. It came down to “confidence” in Experian’s strong market and proven ability.

That had the capabilities that we were predominately seeking. What left us uncomfortable was that it didn’t appear that there were any customers live on that version of the product versus the competing product at Experian. Experian had many customers live on the product with the capabilities that we needed. For us it was confidence in the roadmap and strength in the market today with a competitive product and the proven ability of the competitive product. (COO)

Fingerhut was “concerned” about problems in Equifax’s new product and of being the only user “pushing” for changes to improve, develop, and expand the product (“We were concerned that we would be one of the bigger users who were taking advantage and stressing the system.”).

We were concerned about potential bugs in the new product as well as the fact that there are no other users pushing the company to make changes and continue to improve, develop, and expand the product. We were concerned that we would be one of the bigger users who were taking advantage and stressing the system. I would much rather be in a position to have other users also stressing and providing feedback and pushing the roadmap of development of their products. (COO)

Experian’s product is much less expensive and time intensive to accommodate changes in score cards than the InterConnect version Fingerhut was using. Notwithstanding is the view that Equifax’s new version meets Experian’s performance level.

The comparison between Equifax and Experian when a change to a score card is needed is going from weeks and thousands of dollars with Equifax to hours and a few dollars with Experian. The new Equifax product was supposed to be able to make those changes in hours as the Experian product was able to do. (COO)

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InterConnect did not allow Fingerhut to use other bureaus outside of Equifax (“That was one of the issues that we were looking to address.”). Experian’s platform, in contrast, will enable Fingerhut to use scores from the 3 major providers – Experian, TransUnion, and Equifax.

The InterConnect platform did not let us pull in data from the other bureaus. That was one of the issues that we were looking to address. If a platform can only utilize a single source we don’t have the flexibility because not all of the bureaus have everyone’s score. When we have multiple bureaus to pull from we have more options to get a hit on the file. (COO) We are still buying bureau scores and other things from Equifax—absolutely. On the bureau scores we are going to use—again one of the things that the Experian platform allows us to do—we are going to utilize multiple vendors including Experian and TransUnion. We will be able to pull their scores in as well. (COO)

Fingerhut replaced the technology, not the data, with its switch to the Experian platform. By migrating to Experian’s platform, Fingerhut no longer has to “pull from a specific bureau first and then waterfall into the other bureaus”. Fingerhut uses Equifax and TransUnion data, not data from Experian.

We were looking to replace the technology more than the data. We have maintained a strong relationship with Equifax. I think it is 20% of the business that we do with Equifax. We are keeping other parts of their solution. All we have done is replace the rules management platform. (VP New Customer and Fraud Strategy) We no longer have to pull from a specific bureau first and then waterfall into the other bureaus. We aren’t using Experian’s data. We are using data from Equifax and TransUnion on the Experian platform. (VP New Customer and Fraud Strategy)

8. Competitive comparisons: Equifax’s strong analytical team is not integrated with the strategy team to deliver a comprehensive solution. Equifax’s “competitors are doing that better”. Experian’s account team was “higher performing”. They thought strategically and this translated into better prices and ideas and how to work jointly on other opportunities. Experian positions itself as an “analytic and technology business” that is focused on how information is used. Experian is “data agnostic”. Experian’s capabilities and ease of implementing score cards are evidence of doing “a better job of keeping pace with the market”. Experian’s platform is “more mature” in enabling Fingerhut to be flexible and “avoid duplicate work”. It’s a “build one/use many” approach. This was in stark contrast to InterConnect. The decision “came down to usability versus long term direction”. Fingerhut felt Experian would provide “functionality on a proactive basis” versus “functionality that we were going to ask for that would need to be developed”.

While Equifax’s technical team “was great”, the account team “was not as good from a sales and account management perspective”. One of Equifax’s sales executives came across negatively when citing customers on the new InterConnect platform. Experian’s team, in comparison, is “more engaged, connected, and proactive” (“That is a huge plus and that extends up and down.”). So far Experian is “sending the right messages” to all levels. While Experian is new to the Fingerhut relationship, the company is “impressive” on talent acquisition and is “trying to build a very strong market strategy with a more consultative approach”.

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Equifax’s strong analytical team is not integrated with the strategy team to deliver a comprehensive solution. Equifax’s “competitors are doing that better”.

I know Equifax has a strong analytical team, but how can they integrate more with the strategy team to make sure that when they are selling new scores they really serve up that solution as a comprehensive solution to the vendor? Some of their competitors are doing that better. There is an opportunity for Equifax to engage their analytical team to provide solutions to their clients. (SVP Chief Credit Officer)

While Equifax’s technical team “was great”, the account team “was not as good from a sales and account management perspective”. Experian’s team, in comparison, is “more engaged, connected, and proactive” (“That is a huge plus and that extends up and down.”). So far Experian is “sending the right messages” to all levels.

I would say that the Equifax account team on our account was not as good from a sales and management perspective. The technical team we had from Equifax was great. The Equifax account team is not as good as the account team that we have now with Experian. The Experian team is more engaged, connected, and proactive. They come up with ideas to continue to build our relationship. That is a huge plus and that extends up and down. I think this is something where we collectively broke down a bit with Equifax. We all should have been more engaged. Right now Experian is sending a lot of the right messages in terms of their engagement at all levels. (COO)

Experian’s account team was “higher performing”. They thought strategically and this translated into better prices and ideas and how to work jointly on other opportunities. One of Equifax’s sales executives came across negatively when citing customers on the new InterConnect platform.

The Experian account team was a higher performing account team. An example of that would be the communication about what customers are on the platform. One of the sales people at Equifax came back and said, ‘I am not going to make any money on that so why would I do this or that…’, that kind of thing. He was not thinking strategically about the account and what we could be. Experian seemed to take the approach that they could work with us and figure some of this stuff out. That translated into better prices and better ideas about how we could work together on other opportunities. (COO)

Experian’s capabilities and ease of implementing score cards are evidence of doing “a better job of keeping pace with the market”.

From an application standpoint I think Experian has done a better job of keeping pace with the market. I think the evidence of Experian being ahead in the marketplace is in all of the things we have been talking about. Their capabilities and the time it took to implement a score card etc. (COO)

Experian’s platform is “more mature” in enabling Fingerhut to be flexible and “avoid duplicate work”. It’s a “build one/use many” approach. This was in stark contrast to InterConnect.

From a technical standpoint, I think the usability of Experian’s platform is more mature in the way you can manage the components and strategies. There is a build once/use many capability. And so, once developed, you can use the risk models in multiple places. You can add many strategies and models. So, the contrast to InterConnect was very strong in regard to flexibility and avoiding duplicate work. (VP New Customer and Fraud Strategy)

Experian positions itself as an “analytic and technology business” that is focused on how information is used. Experian is “data agnostic”.

Experian positions themselves as an analytic and technology business. How do I make use of the data? They can provide data but they want to be data agnostic. They don’t care where the data

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comes from. They want to help an organization make good use of the information. (VP New Customer and Fraud Strategy)

The decision “came down to usability versus long term direction”. Fingerhut felt Experian would provide “functionality on a proactive basis” versus “functionality that we were going to ask for that would need to be developed”.

It came down to usability and long term direction and what we believe each organization could provide for long-term support. Who is going to provide us functionality on a proactive basis that are things we want to do versus what is the functionality that we are going to ask for that would need to be developed. I think there is more off the shelf that is available in the Experian platform. (VP New Customer and Fraud Strategy)

While Experian is new to the Fingerhut relationship, the company is “impressive” on talent acquisition and is “trying to build a very strong market strategy with a more consultative approach”.

The weakness for Experian is that they don’t know us very well. They have done some impressive hiring of some individuals. They are trying to build a very strong market strategy with a more consultative approach. I think they are strong in that regard and that definitely helps them. . (VP New Customer and Fraud Strategy)

Meeting baseline expectations is the number one way to become world-class, followed by innovation in scoring techniques “to raise our game”.

Additionally, hitting the SLAs (Service Level Agreements) and delivering against expectations is the baseline expectation, but that has to be part of it. That is probably number one and the issues with proactivity would be number two. Number three would be innovation. They need to be an innovative partner and they need to raise our game. They need to be a leader in the market. (COO) They need to innovate around other scoring techniques to help us further split the risk and identify those target segments that we want to go after. That is what we are looking for from a scoring standpoint. (COO)

Managers’ Insights: Equifax’s Strategic View

1. Equifax’s strategic support: Fingerhut’s management team wanted Equifax to propose ideas

for “sales things and strategies” and act as a partner to grow Fingerhut’s business. “That is where they felt that some things fell down.”

Equifax did not propose new ideas or a new platform. InterConnect 3.0 had limitations, and improvements weren’t recommended until “the 11th hour”.

Fingerhut’s management team wanted Equifax to propose ideas for “sales things and strategies” and act as a partner to grow Fingerhut’s business. “That is where they felt that some things fell down”. Equifax did not propose new ideas or a new platform. InterConnect 3.0 had limitations, and improvements weren’t recommended until “the 11th hour.”

The management down in Eden Prairie tried to get some sales things and strategies. That is where they felt that some things fell down. I am not sure where Equifax dropped the ball. From what I hear from our people we were looking for a strategic partner to help us grow our business. For some reason they didn’t think they were getting that from Equifax. Equifax didn’t present new ideas or a new platform. InterConnect 3.0 has some limitations. I think my upper management didn’t think they were getting offered 4.0 or improvements to InterConnect until it came down to the 11th hour. (Credit Business Analyst)

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The InterConnect Platform

2. Ability to use other reporting agencies: Growing Fingerhut’s business required the ability to

easily “flip a switch to go to another bureau”. When a recent outage occurred “there was nothing we could do”. Equifax’s contract required using its data first before accessing TransUnion or Experian, and this added costs. “It was kind of a sore spot”.

Modifying score cards required technical support from Equifax. It was “cumbersome” to access Experian and TransUnion while having to go to Equifax first. “We didn’t have a switch to let us pull from another company.”

Growing Fingerhut’s business required the ability to easily “flip a switch to go to another bureau”. When a recent outage occurred “there was nothing we could do”.

I think we were looking for new ways to help us grow our business. We needed more flexibility to pull from different credit bureaus and we needed a better fail-over process. If Equifax was down we needed an easy way to flip a switch to go to another bureau. We did have a large outage a year or so ago and there was nothing we could do. We tried to capture the applications in our front end system and then reprocessed them. (Credit Business Analyst)

Modifying score cards required technical support from Equifax. It was “cumbersome” to access Experian and TransUnion while having to go to Equifax first. “We didn’t have a switch to let us pull from another company.”

It required the Equifax technical team to make any changes with the InterConnect platform when we wanted to modify a score card. That was cumbersome. (Credit Business Analyst) The old platform didn’t let us draw on Experian or TransUnion. We didn’t have a switch to let us pull from another company. If a customer applied for credit and Equifax was a no-hit then we would waterfall to TransUnion and try and pull it from TransUnion. We had that setup in our rules in the InterConnect platform to waterfall to TransUnion. However, we had to go to Equifax first rather than TransUnion or Experian. (Credit Business Analyst)

Equifax’s contract required using its data first before accessing TransUnion or Experian, and this added costs. “It was kind of a sore spot”.

In our risk area they have been doing some testing with pre-screening at TransUnion, and when those transactions come in ideally we would like to pull from TransUnion first, but because of the contract we have to pull Equifax first. That is an added cost. It is kind of a sore spot. (Credit Business Analyst)

3. Improvements to InterConnect: Improvements to InterConnect enhanced the rules engine and Fingerhut’s “capability to do things”. The platform “was very easy to work with”.

Equifax issued two annual updates to InterConnect every year that met the functionality changes Fingerhut wanted. “Equifax was headed in the right direction with the added functionality to the system.” Fingerhut, however, would have liked “more control” and “flexibility” to customize the user interface.

Improvements to InterConnect enhanced the rules engine and Fingerhut’s “capability to do things”. The platform “was very easy to work with”.

I liked working with InterConnect. I did rule changes with InterConnect. They have made a number of improvements over the past years with our rules engine and our capability to do things. From my standpoint it was a good system to work with. I didn’t use it to do manual review work. I mostly supported it from an IT standpoint and made rule changes. I was happy with the product. I thought it was very easy to work with. (IT Manager)

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Equifax issued two annual updates to InterConnect every year that met the functionality changes Fingerhut wanted. “Equifax was headed in the right direction with the added functionality to the system.”

We had at least two minor releases a year in InterConnect that were based on functionality changes we wanted. We upgraded based on what was available at Equifax every couple of years. (IT Manager) I did feel that Equifax was headed in the right direction with the added functionality to the system. Again, I am not business I am IT. I thought they were making improvements that were beneficial to us from an IT perspective. (IT Manager)

Fingerhut would have liked “more control” and “flexibility” to customize the user interface. I think one thing we saw in the Equifax was giving the business more control over what the UI (User Interface) looked like. I think there is potential to add some more functionality to InterConnect to give a little bit more flexibility to the companies who are licensing the product. (IT Manager)

Equifax’s Sales/Account Team and the Sales Process

4. Equifax’s value proposition: Equifax “failed to sustain value in the relationship” when changes in Equifax’s sales team and Fingerhut’s management team occurred. The relationship eroded once Fingerhut’s new management team came on board. It could have been related to the new sales team taking Fingerhut “for granted”.

Equifax and Fingerhut changed teams at the same time. As Equifax brought in a new sales team, Fingerhut appointed a new Chief Credit Officer and the leadership in the business analyst group changed. This all happened within 4 months and created a “comedy of errors” (“It was a set-up for a perfect storm.”)

As Fingerhut has grown, and added more VPs, there is “a lot more emphasis” on strong communications and keeping a higher number of executives “in the loop”. Enhanced communications “grew to be expected” by Fingerhut’s new management team. Prior to the changeover in teams, Equifax was in regular communication with Fingerhut. Fingerhut’s new management team, however, initially diminished the importance of the weekly calls in which Equifax participated. This affected communication. Fingerhut would have liked Equifax to have kept in better touch and to have contributed ideas. The handoff between all teams, both Fingerhut’s and Equifax’s, “seemed cumbersome”. There were “issues” on both ends.

Equifax “failed to sustain value in the relationship” when changes in Equifax’s sales team and Fingerhut’s management team occurred. It could have been related to the new sales team taking Fingerhut “for granted”.

I guess they failed to sustain value in the relationship between sales and our upper management. I am not that close to know what happened or who tried what. Prior to our management change and the change in the Equifax sales team we had a great relationship with the sales team. We were smaller. We had only 2 VPs and we had a sales rep. That person’s immediate boss seemed to be there for us. We could ask questions and get answers quickly. (Credit Business Analyst) I am not sure if Equifax took for granted that we were always going to be their client. I kind of have a feeling that that happened with the changes in the sales team. (Credit Business Analyst)

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The relationship eroded once Fingerhut’s new management team came on board. Prior to this point, Equifax was in regular communication with Fingerhut. Fingerhut’s new management team, however, initially diminished the importance of the weekly calls in which Equifax participated. This affected communication. Fingerhut would have liked Equifax to have kept in better touch and to have contributed ideas.

Equifax needed to be flexible with our new management. I don’t know where the breakdown happened. We had a great relationship with sales and they were here in Minneapolis regularly. They were on a weekly phone call. When our new management came in they didn’t think the weekly call was important enough at first. It seemed like there was a lack of communication. I don’t know if our management felt that Equifax should have reached out or if we should have reached out and introduced our new management. I think it was communication and bringing new ideas to the client. That is what I am hearing they wished Equifax would have done better. (Credit Business Analyst)

As Fingerhut has grown, and added more VPs, there is “a lot more emphasis” on strong communications and keeping a higher number of executives “in the loop”. Enhanced communications “grew to be expected” by Fingerhut’s new management team.

In terms of the account team, over the last couple of years our company has had a lot of management changes. With all of the management changes I think we need strong communications at a high level with our vendors. This is certainly a trend I observed over the last few years. There has been a lot more emphasis on that, especially since we grew to a lot more VPs. We are seeing some strong benefits with that and over the last years, this grew to be expected by our new management. (IT Project Manager) For example, two years ago we had 1 VP and now we have 5 VPs in the credit area. The one VP could rely on other people for communications and it wasn’t quite as critical. But with 5 VPs you need to be sure that they are all kept in the loop. There need to be discussions at a higher level. It has become more important in the last couple of years. I have seen that with other vendors as well as Equifax. (IT Project Manager)

Equifax and Fingerhut changed teams at the same time. As Equifax brought in a new sales team, Fingerhut appointed a new Chief Credit Officer and the leadership in the business analyst group changed. This all happened within 4 months and created a “comedy of errors” (“It was a set-up for a perfect storm.”)

The change in the Equifax sales team happened at the same time we had a change in management. We got a new Chief Credit Officer and shortly after that they changed the sales staff at Equifax. My VP left the company and I got a new Director. (Credit Business Analyst) There were 3 or 4 changes in personnel in 4 months’ time. Our sales rep, her boss, and her boss’ boss got changed. My VP left, we got a new director, we got a whole new VP in Customer Acquisitions and he had his own way of thinking about things. It was like a comedy of errors. It was a setup for the perfect storm. (Credit Business Analyst)

The handoff between all teams, both Fingerhut’s and Equifax’s, “seemed cumbersome”. There were “issues” on both ends.

The handoff seemed cumbersome between our companies. Be aware of your customers’ needs; keep the lines of communication open on both ends. I will admit that our management team dropped the ball, too. Equifax came in for a daylong meeting and my director and the two VPs came and went. I don’t even know if the chief credit officer was in town that weekend. I think on both ends there were issues. (Credit Business Analyst)

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Equifax’s Technical Support and Relationship

5. Equifax’s value proposition: Equifax’s dedicated Customer Fulfillment Teams provided “the best experience”. This structure allowed Fingerhut to “bounce questions” and receive assistance for rule changes and suggestions. The CFTs were very “responsive”, “knowledgeable”, and “supportive”.

Equifax’s technical support was “excellent” and did “everything exceptionally well”. There have been recent changes in Equifax’s sales and account team, and “the relationship just hasn’t been the same since those changes”.

Equifax’s dedicated Customer Fulfillment Teams provided “the best experience”. This structure allowed Fingerhut to “bounce questions” and receive assistance for rule changes and suggestions. The CFTs were very “responsive”, “knowledgeable”, and “supportive.

I most appreciated that over the 8 years I have worked with them that we had different teams working with us. In the first few years we struggled with design and the people we worked with. When Equifax went to the CFTs (Customer Fulfillment Team) with Wade and Jonathan, I think that was the best experience to have that dedicated team to bounce question off of. From my perspective they have been great. As we got ready to move to the different platforms they were always there to help us make our rule changes and suggest better ways to do things. (Credit Business Analyst) I have nothing but good things to say about the CFT team. They were always very responsive and knowledgeable about products. They were very supportive of anything we needed to do. (IT Project Manager) We have had a couple of ideas and the CFT team has come through with solutions that were appropriate and helpful for us to implement what we needed to do in a short period of time. (IT Project Manager)

Equifax’s technical support was “excellent” and did “everything exceptionally well”. There have been recent changes in Equifax’s sales and account team, and “the relationship just hasn’t been the same since those changes”.

Our Client Functional Team is excellent (technical team). The group we have had over the last couple of years is very responsive to our requests. I think there has been a change in our account representation (sales & account team) over the last couple of years and we have had a switch in management. I am not sure if that is where the disconnect happened. The relationship just hasn’t been the same since those changes. (Credit Business Analyst) I think the CFT team did everything exceptionally well. (IT Project Manager)

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Insights into Experian

6. Experian very engaged: Experian’s system provides for “user flexibility” and the company is “more engaged with our management team for strategic solutions”. While participating in the decision to switch to Experian, however, the Credit Business Analyst rated Equifax first in terms of responsiveness.

Experian is “easier to work with” in terms of achieving what Fingerhut’s management wants to achieve. While this increases analysts’ responsibilities, Fingerhut is apprehensive about this change because is adds staff members having access to the platform and this affect the manager’s “control”. Experian’s ability to edit rules in multiple places within three applications is confusing. Equifax’s rules editor provided one point of making changes and this was “a little more straight forward”.

Experian’s system provides for “user flexibility” and the company is “more engaged with our management team for strategic solutions”. Further, Experian is “easier to work with” in terms of achieving what Fingerhut’s management wants to achieve. While this increases analysts’ responsibilities, Fingerhut is apprehensive about this change because is adds staff members having access to the platform and this affect the manager’s “control”.

There is a lot of user flexibility with the Experian system. It seems to be more engaged with our management for strategic solutions. We should be able to add and subtract score cards as we want from within the platform. We can change our whole rules flow if we want to. With flexibility comes a whole lot of responsibility. (Credit Business Analyst) Experian’s platform is easier to work with when you consider what our management wants to do and where they want to take the company. (Credit Business Analyst) My management is going to have 6 people who can make changes. That scares me a bit because of control. I am still not sure about deployment. (Credit Business Analyst)

While participating in the decision to switch to Experian, the Credit Business Analyst rated Equifax first in terms of responsiveness.

If I had to rate them it would be Equifax, Experian, and TransUnion as far as response to what I need. We are going to Experian and I truly don’t have enough experience to decide if they are stronger than Equifax. (Credit Business Analyst)

Experian’s ability to edit rules in multiple places within three applications is confusing. Equifax’s Rules Editor provided one point of making changes and this was “a little more straight forward”.

I have heard some things about the Experian product that confuse me. It may just be because I am not involved in it. I have heard that there are three applications that work together. Things can be done in multiple places in those applications. InterConnect was all controlled by the “Rules Editor”, so this provided a single point of making changes versus multiple editing tools. I think it was a little more straightforward. (IT Manager)

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Interviews with Senior Executives Investigation Dates: February 19, 2010 (COO), March 8, 2010 (VP New Customer and Fraud Strategy) and March 16, 2010 (SVP Chief Credit Officer) Account Team Effectiveness - Interaction with Decision Makers Actions and support from Equifax’s account team that were most effective. I think the day to day interactions between their Equifax’s operations and our technical team and operations has been very positive. The technical team has been great. We have had no issues whatsoever there. That has been a very positive experience for us. On the project level I think they have done a nice job when we have had to make changes. That has been a plus from an operational standpoint. From an SLA (Service Level Agreement) /systems standpoint, performance has been good in terms of our current experience. Those are the biggest positives. (probe) The decision to use the InterConnect platform was before my time. Ted (Rogers) might be in a better position to answer that question. I just joined the company a year ago. (probe) I think the InterConnect platform is not particularly well parameterized. A lot of the work to update score cards, etc., is very intensive from a project standpoint. Some of the features in competing products tend to be much more user configurable as opposed to requiring us to invest and take a long time to actually complete a score card implementation. For us it was about the configurability, cost, and time it took to perform a change in strategies that compelled us to look at other alternatives. The score cards we create can change based on the observations we make. Rapid deployment of those changes is important to us. (COO) Their support team is very responsive and works really well with our day to day folks. (probe) The relationship with the sales team has been difficult because we have had transitions on both sides of the organization. I think the sales team has some pretty good folks on it. I think there is room for improvement in the form of more proactive communications. There is a lack of a relationship with the senior part of our organization. I think that the relationship on the business side had an impact on the overall decision process. It isn’t that they didn’t bring new things to the table that they were trying to sell. I think we struggled to get them to think more like a consultant and help us take full advantage of their system as we talked about what our organizational goals were.

Section Four

Comments from Decision Makers/Stakeholders Anecdotal Remarks for Deeper Insight into Critical Prospect Perceptions

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(probe) It wasn’t that they were never proactive, it was that it wasn’t consistent. (probe) The turnover happened at the same time in both organizations. I came in during October of 2008 and that is when they took several people off of the account. I think that hurt the relationship. If you have a major account who has just added some new players it is important to maintain consistency on your side. They should have considered if this was the right time to make the changes. Things were missed or misunderstood and that created additional stress in the process. (probe) It is my understanding that the relationship with our senior managers was better before the change in the sales group. New people came on board on each side and the relationship just never gelled. It isn’t that we can’t get along. I am working with them now and I get along with them perfectly fine with them and I think they are doing a good job for us right now. It is with the more senior leaders of our organization where things broke down. (probe) I would say that some of the Equifax folks worked to build a relationship with our senior managers but not all of them did so. We had several new C- level parts of our organization and I don’t think, in some cases, there were any attempts, especially to our chief operating officer. That is where the biggest link between the two businesses used to be in the past. (VP New Customer and Fraud Strategy) The most effective thing is that the (technical) team understood what we wanted in terms of our functionality. They understood what we were looking for in terms of what we expected the new tool to do in terms of handling our future growth in risk management. They were very clear in understanding what our needs were. I think the technical team was also effective in taking the time and demonstrating different functionalities of the software. The technical team was able to work through some use cases in terms of demonstrating that to the business (account) team. (SVP Chief Credit Officer) Services and support that Equifax did not provide that, if provided, would have put Equifax “over the top” and made the company “best in class.” Equifax showed us the next generation of the product. I’ve forgotten what version it was. That had the capabilities that we were predominately seeking. What left us uncomfortable was that it didn’t appear that there were any customers live on that version of the product versus the competing product at Experian. Experian had many customers live on the product with the capabilities that we needed. For us it was confidence in the roadmap and strength in the market today with a competitive product and the proven ability of the competitive product. (probe) We were concerned about potential bugs in the new product as well as the fact that there are no other users pushing the company to make changes and continue to improve, develop, and expand the product. We were concerned that we would be one of the bigger users who were taking advantage and stressing the system. I would much rather be in a position to have other users also stressing and providing feedback and pushing the roadmap of development of their products. (probe) The comparison between Equifax and Experian when a change to a score card is needed is going from weeks and thousands of dollars with Equifax to hours and a few dollars with Experian. The new Equifax product was supposed to be able to make those changes in hours as the Experian product was able to do. (probe) We are still defining the full scope of the project to make a change from the InterConnect platform to the Experian product. We don’t believe it is going to be huge, but

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certainly there will be some work involved. (probe) I don’t think there is any issue with the credit information and identity theft avoidance features that Equifax provides. I think both Equifax and Experian are good stewards of the data. That was not a primary decision point in any way, shape, or form. (probe) We are still buying bureau scores and other things from Equifax—absolutely. On the bureau scores we are going to use—again one of the things that the Experian platform allows us to do—we are going to utilize multiple vendors including Experian and TransUnion. We will be able to pull their scores in as well. (probe) Today our provider is predominately Equifax. I don’t know what the ratio is. This will open up additional opportunities for us to use the right score in the right situation. (probe) The InterConnect platform did not let us pull in data from the other bureaus. That was one of the issues that we were looking to address. (probe) If a platform can only utilize a single source we don’t have the flexibility because not all of the bureaus have everyone’s score. When we have multiple bureaus to pull from we have more options to get a hit on the file. (probe) I couldn’t give you a percentage of people who didn’t come up on Equifax. I think Ted Rogers could give you a lot more insight on the specifics of that. (COO) To prevent the breakdown we had I would recommend to Equifax that they avoid making personnel changes on their side when their client has just made changes. The challenge there was that it wasn’t just one or two - it happened in several places. We had maybe one consistent person on the relationship and that wouldn’t have been the person I would have maintained day-to-day contact with (probe) He was fine, but for day-to-day contact, he was not technical and not senior enough. (probe) In a one month period there were three major folks in the relationship that were gone. I would also say for a relationship that they presented as being strategic for them, I would have expected more of a reach-out from their senior leaders to make sure that the relationships from the past stayed in place. That didn’t happen. (probe) People like Dann Adams, for example. (VP New Customer and Fraud Strategy) I think that the gap appeared when we went through the RFP process. During the RFP we were able to understand what the future roadmap and the functionality of the software would be. In my mind it should not have taken an RFP to do that. Given that we already had an existing engagement the team could have come in and shared where things were headed and what the functionality was to be. Then we would want to recommend an upgrade to the platform. (probe) I think there was a bit of dissatisfaction that triggered the RFP. The speed to market of the platform we were on was an issue. I think what lead to the RFP process was that we have evolved as a company. We wanted to make sure that we were looking for a comprehensive solution that could help meet our future needs. We went into the RFP process with quite an open mind but we were clearly not happy with the speed to market as well as the existing functionality of the software. (probe) When I say speed to market I am talking about implementing risk models, risk strategies, and how to support new campaigns both from a pre-screen perspective and new strategies to support those campaigns including new credit models. It was our expectation is that we wanted a tool that would allow us to implement very quickly. (SVP Chief Credit Officer)

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Needs & Expectations – Client’s Requirements, Equifax’s Understanding of Client’s Emerging Needs, and Equifax’s Perceived Capabilities Client’s most critical strategic needs and challenges that Equifax was to address and solve. From a tracking standpoint with respect to this application, I think it wasn’t clear what the long term vision and commitment was to the application. I think that is something they have to square away in the market. The fact of the matter is they fell behind in some ways versus Experian. That is a gap that I think they need to close. (probe) They lacked new features and functionality in the platform. (probe) There were concerns that the platform may be discontinued or not as updated as we would like to see it. If there are not as many users on it, then the ability to add new features and keep the platform current, up to date, and competitive starts to diminish. For us it is good to see more users on it rather than fewer. (COO) We are in a business that has gone through rapid growth but at the same time it is our goal to be more rapid growth. We need a partner who can bring vision and strategic forethought to the table. What can they suggest that we do different to try and grow? Although we had multiple discussions around it they never seemed to grasp it. It was more about what was the next thing they could sell versus recognizing that the more volume we could create the more money they would make. They weren’t responsive to wanting to help grow in ways that might force us to use another bureau’s data, for example. But in the end they make more money when we process more transactions. Somehow that was missed in their thought process. You have to look at the total relationship and now just a single point of view. (VP New Customer and Fraud Strategy) The substantial changes were first that we are going from a single brand to a multi brand company. We launched a new brand last year and we have aspirations to launch four new brands in the future. Each new brand will have a different credit strategy. Our ability to roll out credit strategy tailored to those brands is something different. We didn’t have that before. The second change is launching new products. In a given brand we had just one credit product. We need to up-sell or cross-sell depending on the segment the different credit products. The third change would be that we were predominately a catalog, pre-screen driven growth company but now we are making web-centricity as a much bigger part of our growth journey in the future. How do we make sure that folks who apply for credit over the web are handled and made into a bigger part of our growth journey? We need to make sure that we have the right credit strategies for people who come to the website but were not solicited or pre-approved. We need to support their aspirations for purchasing from Fingerhut and Bluestem. Those are what I would call the three areas where we have expanded. As we launch new brands and for our existing brand we need to have the ability to integrate and roll out new models. How do we champion challenge relatively quickly and be able to test things very quickly, both internally developed models as well as integration of new third party models? We need to integrate that and test it relatively quickly. Even if you were in a single brand business we would want to do that as a core functionality as well. (probe) All of these brands would come back to the same credit platform. There wouldn’t be independent systems for each brand. (SVP Chief Credit Officer)

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How closely Equifax’s solutions were aligned with client’s strategic objectives. At the time I think it was a good decision to go with Equifax. I don’t question that. I just don’t know that we ever saw eye-to-eye or talked more with each other in terms of where we were going and where the product was going. (COO) I would say technology-wise Equifax was trying to be there. I didn’t feel like they were well aligned in recognizing where our opportunities were. There was a pretty big gap. They may not be able to offer every single thing we need. Their contract was structured in such a way that I had to do everything with them first that greatly impeded our growth and strategic direction. We talked about that challenge and they didn't take any proactive steps. They always wanted to stifle those conversations. They wanted to talk about these issues when the contract was over. I think that hurt them. Short-term revenue objectives cost Equifax a long-term relationship. (probe) Everything went through Equifax’s platform and we always had to pull their data first. One of my opportunities to grow is to leverage more bureaus. If I source a prospect from a different credit bureau I still had to go get Equifax’s data first. But their data before was the one telling me not to market to this person. We would have to pay a penalty fee if we waterfall that individual to another bureau. I had to pay a penalty fee on every single person I would process is basically what would happen. (probe) That costs me more and doesn’t help me grow. They can say they are trying to align with us but actions are stronger than words. (probe) I discussed this with Equifax a couple of different times even down to the bitter end with Brian Crawford. I had a warm conversation with him about this situation. I told him that I didn’t understand how Equifax could continue to miss it. How can they suggest that we discuss it when the contract is over? If they don’t address it now they won’t have a contract when the contract is over. I am using Brian as an example but I don’t think it was just one individual. The situation seems pervasive so I would guess it is not one person. (probe) I was trying to understand if it is ingrained in Equifax’s culture to be a bit rigid. I don’t know if it is or not. It seems to be. Since then they have been more willing to look at things through a different lens. Maybe it has been a learning experience as well. Maybe they have recognized it and are doing something about it. (VP New Customer and Fraud Strategy) I would say their alignment was moderate to low. I think there was a little bit of what I would call an expectation mess. For example, we were not happy with the speed to market. I don’t think that Equifax came to the table proactively to say that they heard our concerns and here is what you can do to meet your speed to market expectation. I would say that in that arena they were less than effective. (probe) On paper InterConnect 4.0 appeared that it would address some of that concern but we ran into a challenge because we weren’t able to validate through other references that, in fact, InterConnect could do that. (probe) The references Equifax gave were in different industries that didn’t change credit profiles as quickly. I don’t think we had any references that made us feel comfortable that what it says on paper is what happens in practice with InterConnect. (probe) Equifax should have given a better reference to have a dialogue with. That was a very significant gap in terms of the Equifax team not having the clarity on who the actual company is that would be a good reference point for us. (probe) The references Equifax provided weren’t relevant. There was confusion about

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how long they had been using the new platform. The whole process was not well thought through and coordinated. We asked for a relevant set of companies that are on this platform and use the platform the way we would use it. You can give a reference of a company who was using the platform for a very simple strategy, but we are looking for the platform to make rapid modeling changes. If the reference you give me isn’t making modeling changes then that is not a relevant reference for me. They have to make sure about what is important for the client and pick an company that is using the platform in that way so that there can be an appropriate dialogue. You also have to keep in mind that Equifax could have been up front and said that they didn’t have anybody who was using the functionality to the extent that we were looking for. We would have understood that. In the whole process that was the biggest disappointment. We didn’t have any relevant references and also not having the level of understanding from Equifax of saying here is a relevant vendor. That was not a good experience for us. Clearly it was not well managed by the team. My recommendation for them would be to be clear about who a relevant reference would be. Make sure it is a relevant reference. If they don’t have a vendor who meets those needs then be open and transparent about that. (probe) I would say that the relationship was very, very good from a day to day tactical execution of our day to day strategy. There were gaps on the strategic engagement and relationship in terms of making sure that we have transparency in what the roadmap is and what the new functionality and databases are. The relationship is not just the whole InterConnect. We do quite a bit of other business with the team. That is something that was missing on both sides. We have since then course corrected. There is now a level of engagement on both Equifax’s side as well as ours to make sure that both sides have more strategic engagement. Both sides understand what the other needs. What is the focus area in terms of them helping us with our growth journey? (probe) There were no issues with the day to day team. It was the sales and account team that failed to have a strategic engagement with us. There were gaps where we didn’t understand where the broader strategy was headed from Equifax’s perspective. We have both recognized that gap and we just had our first meeting yesterday at the strategic level. (probe) They are addressing the gap by ensuring that we have the right parties involved. We have a sponsor and the right level of engagement from the business side. That is something we are doing on our side. We have cross-functional representation on the Bluestem side. In these strategy meetings we have executives from the Bluestem side rather than the day to day tactical operational team from Bluestem. That is the first correction. The second correction is to meet on a regular basis. We expect it to be every quarter. We have a rhythm in terms of these meetings. Third we want to make sure they understand where we are headed and what our priorities are. We did that yesterday and they could walk away understanding what our priorities are. Obviously on their side I feel it is a step in the right direction to have the same level of engagement at the executive level above and beyond the tactical team. I think the question is what led to some of the gap. I think people get really focused on their day to day stuff. You don’t treat it as a strategic account. There is a recognition that there needs to be more focus on the Equifax side on this relationship versus just a technical engagement.

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Also the engagement is not just the InterConnect. The engagement is beyond the InterConnect tool. We do a lot of business in terms of bureau data that we buy from Equifax and the different models we buy from Equifax. Engagement is beyond new accounts. There is account management and collections. Engagement is a life cycle function versus just new accounts. I think what led to it is probably a focus around day to day strategy versus really understanding where we were headed. (SVP Chief Credit Officer) Competitor Insight – Actions Competitors are Undertaking to Acquire Account/Gain Share Equifax’s primary competitor. Experian and TransUnion. (COO) Experian and TransUnion. (VP New Customer and Fraud Strategy) Experian and TransUnion. (SVP Chief Credit Officer) Emerging strengths of Equifax’s competitors that could impact client’s business. From a bureau scoring standpoint I think they are all pretty competitive. Ted will have some different insights than I will on that. I think they are all really good companies and they each have competitive products on the bureau side. On the application side it is really Equifax and Experian in terms of the primary options that we were looking at. From an application standpoint I think Experian has done a better job of keeping pace with the market. (probe) I think the evidence of Experian being ahead in the marketplace is in all of the things we have been talking about. Their capabilities and the time it took to implement a score card etc. (probe) I am not so sure if Experian can produce a more up to date version faster than Equifax. (probe) I do think Experian’s platform has a larger market share than Equifax’s platform, although I can’t say that with certainty. The references we had for Equifax were all telecommunications and wireless companies that were using the product. They weren’t using the kind of capabilities that we need. Whereas Experian has customers that we knew were using the latest version of their product and had the capabilities that we needed and were competitive with us. We were able to gain better insight in terms of how the product actually performs because they had customers using it in the same ways we would be using it. We couldn’t tell if the Equifax product would meet our needs. To us it didn’t seem if anyone was using the system in any way, shape, or form competitively with how we would use it today. (probe) The references provided by Experian were in other business besides just telecommunications. Some of the other deciding factors included that the account team seemed to drop the ball in terms of connecting us with the right vendors and making sure that we clearly understood where they were at with the product that we needed to be on to get the capabilities that we wanted. To some extent there was a big confusion over what they were communicating to us versus what was reality when we dug into it. That was problematic in this process.

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For example, we were told X number of users were using it but when we dug into it we found out that was really not the case and we couldn’t even check with them as references. That was a big problem for us in terms of validating the capabilities, performance, and user acceptance of the platform that they wanted us to be on. It was a much easier process with Experian. We were able to validate it very quickly. (COO) I think Equifax has very rich data and I think that they are on par or slightly leading. I think where Equifax lags behind is on having a comprehensive solution. I call it life-cycle solutions. From a technology perspective InterConnect can do things from a new account origination perspective but there are other solutions who can handle from a life cycle perspective. The preference is for folks to use a tool that can handle the life-cycle management. It makes it easier on the client side. They don’t have to learn new tools for different aspects of the business like management and collections. That is something for Equifax to keep in mind. I know Equifax has a strong analytical team, but how can they integrate more with the strategy team to make sure that when they are selling new scores they really serve up that solution as a comprehensive solution to the vendor? Some of their competitors are doing that better. There is an opportunity for Equifax to engage their analytical team to provide solutions to their clients. At this point I think we have been clear about what our expectations are and where we are headed. Equifax needs to work on that game path in terms of making sure they can help us with our growth journey. (SVP Chief Credit Officer) Emerging weaknesses of Equifax’s competitors that could impact client’s business. N/A. (COO) TransUnion knows that they are a data company and they sell themselves as that. They are not a very broad partner and I think they know that. It is a weakness for them that they have a limited relationship with us, but their strength is that they really understand what they are focused on. They try and make more of that happen rather than worry what they don’t have. The weakness for Experian is that they don’t know us very well. They have done some impressive hiring of some individuals. They are trying to build a very strong market strategy with a more consultative approach. I think they are strong in that regard and that definitely helps them. I think they bring one of the more comprehensive and mature technology solution sets to the industry. (VP New Customer and Fraud Strategy) Equifax’s competitors’ primary differential over Equifax. That is a tough question. I think Dann Adams and some of his team is strong and good. Equifax clearly has some competitive products out there. Likewise with Experian and TransUnion. I have worked with TransUnion the very least. I would say that the Equifax account team on our account was not as good from a sales and management perspective. The technical team we had from Equifax was great. The Equifax account team is not as good as the account team that we have now with Experian. The Experian team is more engaged, connected, and proactive. They come up with ideas to continue to build our relationship. That is a huge plus and that extends up and down. I think this is something where we collectively broke down a bit with Equifax. We all should have been more engaged. Right now Experian is sending a lot of the right messages in terms of their engagement at all levels.

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(probe) The Experian account team was a higher performing account team. An example of that would be the communication about what customers are on the platform. One of the sales people at Equifax came back and said, ‘I am not going to make any money on that so why would I do this or that…’, that kind of thing. He was not thinking strategically about the account and what we could be. Experian seemed to take the approach that they could work with us and figure some of this stuff out. That translated into better prices and better ideas about how we could work together on other opportunities. (COO) From a technical standpoint, I think the usability of Experian’s platform is more mature in the way you can manage the components and strategies. There is a build once/use many capability. And so, once developed, you can use the risk models in multiple places. You can add many strategies and models. So, the contrast to InterConnect was very strong in regard to flexibility and avoiding duplicate work. (probe) I would say from the perspective of core functionality either platform could do either thing. It came down to usability and long term direction and what we believe each organization could provide for long-term support. Who is going to provide us functionality on a proactive basis that are things we want to do versus what is the functionality that we are going to ask for that would need to be developed. I think there is more off the shelf that is available in the Experian platform. (probe) We no longer have to pull from a specific bureau first and then waterfall into the other bureaus. We aren’t using Experian’s data. We are using data from Equifax and TransUnion on the Experian platform. (probe) We were looking to replace the technology more than the data. We have maintained a strong relationship with Equifax. I think it is 20% of the business that we do with Equifax. We are keeping other parts of their solution. All we have done is replace the rules management platform. (probe) The thing that comes to mind that Equifax should be watching is that they need to set a commitment and stick to it. On a production (technical) basis things happen pretty well. If they need to deliver a file to us by X day they do that every single month. There are no problems with that. If you have to make a change to that then things get more complicated. It makes it more difficult for change management. Maybe that is what they want. They want change management so they try and deter you from making changes. On an ad hoc project basis it can be more of a challenge from a timing perspective. I came from the service industry and the responsiveness of some of the projects was less than what my expectations were. I don’t know if I have the wrong expectations, though. (probe) Our senior management is working through improving the relationship with Equifax. We are trying to plan quarterly meetings and I am trying to force more involvement from senior management on our side. I’ll tell you the same thing that I told some of the folks over there, I think their team on the operations side and on the sales side have been incredibly professional throughout this. I think that only helps them in the long run. We have had our challenges but I think the team has been incredibly professional. I think they have done themselves a justice in stating that they want to maintain the rest of this relationship that we have. Because of that they are keeping more business and we are swapping some of the other tools that are used. We are incorporating more of them in our process than I think we originally planned. (probe) In respect to TransUnion, TU knows that they are data and they present themselves as data. There isn’t a whole lot from a technology or processes standpoint. Experian positions themselves as an analytic and technology business. How do I make use of the data? They can provide data but they want to be data agnostic. They don’t care

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where the data comes from. They want to help an organization make good use of the information. (VP New Customer and Fraud Strategy) Equifax’s primary differential over its competitors. N/A. (COO) I haven’t figured out where Equifax is. They are somewhere in between Experian and TransUnion. They need to figure out who they want to be as well. I can’t really put my thumb on it and say ‘this is their strategic position.’ I think Equifax wants to be more technology and life cycle driven, but I don’t know if they aren’t fully vested or if they aren’t mature enough in that regard to be considered there. (VP New Customer and Fraud Strategy) Value Proposition - Increased Revenue, Reduced Costs and Increased Value Examples of how Equifax failed to sustain value. They didn’t keep pace competitively with Experian’s products. As a consequence it cost us a lot of money and time to get new scoring techniques and score cards implemented. As a result it was costing us money. If Equifax had an account team who was looking at us and trying to keep us performing at our best and understanding our concerns, I don’t know that this would have happened. (probe) I am sure at some point the Equifax team did act proactively but at some level that relationship started to break down. You have to keep the context that I have been here only a year. All I have experienced is a somewhat broken relationship with Equifax. (COO) I don’t know if I would say Equifax failed to sustain value on the InterConnect platform. They are working to change things. What the organization had invested technology-wise with them took the organization to a certain level. I would say that there were some changes that were promised, but never made in 2008 that I don’t think provided near the value that Equifax’s organization thought it was going to provide. It was a pretty substantial investment that was made. That is where I would say the value started to fall off. For the people who have been in the organization a long time and who grew up with the InterConnect, I don’t think they knew what they weren’t getting. Those of us who came in from the outside had a pretty clear picture of what other capabilities were out there that we weren’t getting. (probe about prior Experian experience at last job) I used to work for an Experian competitor, so I had knowledge of both platforms, but not hands-on experience. (VP New Customer and Fraud Strategy) Communications Tools – Effective Tools and Perceived Areas for Improvement Communication and management reports that were effective and on target with requirements. When we met with Equifax during the RFP process they came forward and showed the different kinds of reporting they could do. I thought it was great and it begged the question ‘Why weren’t we doing this earlier?’ I think it was a breakdown on our end but it was certainly not proactive on the part of the account team. I think the reporting they offered up at that point could have been good but if they had been doing that proactively we would have been in much better shape and Equifax would have been in much better shape as well. (probe) I think there had been some changes to the account team since we first began our

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involvement with the InterConnect platform. Ted may be able to give you the exact history. (probe) I wouldn’t say the honeymoon was over or that the Equifax team got complacent, instead I would say you have to be fighting for the business every day. The account team took the business for granted and didn’t work hard enough to continue to build it and grow that relationship. As a consequence I think they did a poor job. (COO) Equifax customized the reporting for us. Unless you want me to dive into a lot of details, I would say that we were happy with the reporting aspects. (Credit Business Analyst) From a data perspective Equifax’s reporting is fine. I think TU rules in the volume of data but I don’t see anything from an Equifax perspective that is an issue from quality or coverage. (probe) I don’t know if there were any challenges with InterConnect’s reporting. (VP New Customer and Fraud Strategy) How Equifax could have leveraged its service and relationship to become and sustain world-class performance, if budgets and other constraints were not factors. I think it is a relationship where you are proactively coming forward with offers around ways we can continue to build our relationship. They can share insights they see in our business versus what they see in other companies that they support. They could help us generate additional revenue and save money. Additionally, hitting the SLAs (Service Level Agreement) and delivering against expectations is the baseline expectation, but that has to be part of it. That is probably number one and the issues with proactivity would be number two. Number three would be innovation. They need to be an innovative partner and they need to raise our game. They need to be a leader in the market. (probe) They need to innovate around other scoring techniques to help us further split the risk and identify those target segments that we want to go after. That is what we are looking for from a scoring standpoint. (probe) Through the course of the RFP they did come forward with some suggestions on how they might use some of the data they have to better model the risk. By that point it is a little too late. If they had been doing that proactively all along and if they had been working with us in that capacity they would have been in much better shape. (probe) Our online brand is consolidated over the same platform as the catalog business. (COO) I think there is an opportunity to engage more as a consultant. They could understand more what our growth goals are, and they need to step back and think what ideas they could suggest to us to achieve those goals. They could look at me, my peers, and the senior leaders above me and tell us what they would do if they were in our shoes. They need to bring that thought process to the table. They need a more comprehensive view. They need to step back and help us understand what they can do to help us to that next level. (VP New Customer and Fraud Strategy) Strategic Planning - Opportunities & Goal Setting (Respondent’s Comments) Strategic initiatives and plans that may require issuing new RFPs. Our contracts last between 3 and 5 years. (COO)

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Whether Equifax will be included in these initiatives. Yes we would include Equifax in the future. I think Dann Adams is a great guy and I think Equifax has a lot to offer. I would consider Equifax for a variety of different opportunities in the future. If we were to work on the same operational level like we have been I would want a different account team working on our account. (COO) Additional Comments (Respondent’s Comments) It seems that there was some kind of breakdown in their own account management chain of command. I would recommend that they work on fixing that. (probe) I can tell you that there was a big gap between where Dann was at versus some of the people that we were dealing with. I think Dann was on top of his game, but I don’t know that he got a complete picture of how well or how poorly our account was being managed. I think there was some breakdown there. (probe) The problem bubbled up within our organization and by that time the damage had been done. By the time it reached my level of visibility it had gone pretty far. We started talking about our options and our capabilities and by that time the credit team had started to think about what other options were available to them. Once there is that breakage it opens the door to new opportunities. That breakage occurred and opened that door. It was unfortunate. I would have just as soon have seen us stay with Equifax but the breakage and the subsequent investigation led us to believe that we needed to make a change. What needs to happen is for Dann to get out and meet the accounts. He needs to get this feedback first hand. I would strongly encourage Dann to get out and meet the accounts and be on the road visiting the key customers. He needs to hear what is going on first hand. I want to be sure you make the distinction between the account sales team and the technical team that worked on our business with us. The technical team and the operations team were great. We will miss working with those folks. I think the account sales team did not do a good job. I want to be sure you don’t lump all of those folks together. There was a very strong relationship that we had with the technical folks. It was unfortunate that the account management team wasn’t able to stay connected with some of the key customers within our company. (COO) Equifax’s day-to-day technical team is absolutely incredible. I said that to their most senior leaders. I said that to Dann Adams. The quality of the folks that you deal with on a day-to-day basis is absolutely incredible. I think it is bigger than that though. I think we will enjoy the new vendor’s day-to-day folks just as much. We take more control of things into our hands so there is less dependence there. I want to make sure in all commentary that it is recognized how great individuals are that are on the day-to-day technical team. Those folks are Wayne Baggerly (sic), Karish Patel (sic), Jonathan Throwman (sic) They are top-notch. I want to make sure that is in any documentation. (VP New Customer and Fraud Strategy) When Equifax’s is working on new data tools they need to take our data and use it in the new tool and show us the results. We can then evaluate the value of the new data or the new score. They can proactively take our data and work with the relationship manager and come back to show how the new tool can present the data. That is an effective way of engaging rather than us trying to figure out how the new tool can fit into our business model. (SVP Chief Credit Officer)

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Interviews with Managers Investigation Dates: March 2, 2010 (Credit Business Analyst) and March 17, 2010 (IT Project Manager) Account Team Effectiveness - Interaction with Decision Makers Actions and support from Equifax’s account team that were most effective. Our Client Functional Team is excellent (Technical Team). The group we have had over the last couple of years is very responsive to our requests. I think there has been a change in our account representation (Sales & Account Team) over the last couple of years and we have had a switch in management. I am not sure if that is where the disconnect happened. The relationship just hasn’t been the same since those changes. (probe) The CFT includes Wade Baggerly (sic) and his group. They are excellent and very good to work with. (Credit Business Analyst) I have nothing but good things to say about the CFT team. They were always very responsive and knowledgeable about products. They were very supportive of anything we needed to do. I don’t work with the account team as much because I am in IT. Their communications and work efforts were with the credit side. I don’t have a lot to say about working with them. (probe) When I was in involved with the account team I thought they were fine. I was involved in meetings when they were doing presentations and things like that. Like I said I wasn't involved on a daily basis. I didn’t have any problem with anything they did. In that context everything was fine. (probe) I didn’t work directly with the account team. I did more work with the CFT team. (IT Project Manager) Services and support that Equifax did not provide that, if provided, would have put Equifax “over the top” and made the company “best in class.” I am not involved in the relationship first hand. The management down in Eden Prairie tried to get some sales things and strategies. That is where they felt that some things fell down. (probe) I am not sure where Equifax dropped the ball. From what I hear from our people we were looking for a strategic partner to help us grow our business. For some reason they didn’t think they were getting that from Equifax. Equifax didn’t present new ideas or a new platform. InterConnect 3.0 has some limitations. I think my upper management didn’t think they were getting offered 4.0 or improvements to InterConnect until it came down to the 11th hour. (Credit Business Analyst) I think the CFT team did everything exceptionally well. I was very pleased with them. I can’t speak to the account team, as I said. (IT Project Manager) Needs & Expectations – Client’s Requirements, Equifax’s Understanding of Client’s Emerging Needs, and Equifax’s Perceived Capabilities Client’s most critical strategic needs and challenges that Equifax was to address and solve. One of the main things we were looking for was speed to market when making a change to score models. We need to put more of the changes in our hands as far as making strategy changes on our own.

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I think we were looking for new ways to help us grow our business. We needed more flexibility to pull from different credit bureaus and we needed a better fail-over process. If Equifax was down we needed an easy way to flip a switch to go to another bureau. We did have a large outage a year or so ago and there was nothing we could do. We tried to capture the applications in our front end system and then reprocessed them. The big things were score models, speed to market, flexibility and more business user-friendly than what they were seeing with InterConnect. (probe) It required the Equifax technical team to make any changes with the InterConnect platform when we wanted to modify a score card. That was cumbersome. (probe) I tried to merge them to create the cohesive story. The outage was for a couple of days in April of 2009. The system went down on a Sunday afternoon. We were doing some changes and I happened to notice it. It wasn’t until Monday afternoon or a little more than 24 hours until they got us back up. Then we had our reps trying to resubmit the 4000 applications in the system. They rerouted us to a back-up system but it wasn’t powerful enough to handle us pounding it with 300-400 apps per hour. I think it was about a year ago. They got us back up again but it wasn’t stable. (probe) The old platform didn’t let us draw on Experian or TransUnion. We didn’t have a switch to let us pull from another company. (probe) If a customer applied for credit and Equifax was a no-hit then we would waterfall to TransUnion and try and pull it from TransUnion. We had that setup in our rules in the InterConnect platform to waterfall to TransUnion. However, we had to go to Equifax first rather than TransUnion or Experian. In our risk area they have been doing some testing with pre-screening at TransUnion and when those transactions come in ideally we would like to pull from TransUnion first, but because of the contract we have to pull Equifax first. That is an added cost. It is kind of a sore spot. (Credit Business Analyst) A company needs to be working with us to meet our business needs. They need to understand our needs and offer solutions. Sometimes there are multiple solutions to meet those needs. From an IT perspective you need to have a regular contact who knows the product I am working with and knows the application of that product. They need to assist in technical issues with that application or with problems in the system or getting files transmitted to us. We need comprehensive support from them. (IT Project Manager) How closely Equifax’s solutions were aligned with client’s strategic objectives. I think Equifax was aligned fine. I am IT I am not the business side. I can’t answer for how the business felt about that. From a technical standpoint I have always appreciated working with Equifax. They have always been very easy to work with. From a strategic standpoint most of my work has been with the CFT. I have been happy with the solutions that the CFT has offered. We have had a couple of ideas and the CFT team has come through with solutions that were appropriate and helpful for us to implement what we needed to do in a short period of time. (probe) I liked working with InterConnect. I did rule changes with InterConnect. They have made a number of improvements over the past years with our rules engine and our capability to do things. From my standpoint it was a good system to work with. I didn’t use it to do manual review work. I mostly supported it from an IT standpoint and made rule changes. I was happy with the product. I thought it was very easy to work with.

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(probe) We had at least two minor releases a year in InterConnect that were based on functionality changes we wanted. We upgraded based on what was available at Equifax every couple of years. We didn’t typically do upgrades to our system with things that were going into future versions at Equifax. We were always doing functional changes in the system. (probe) The upgrade from 2.0 to 3.0 was something we paid for. We also paid for any functionality that we added to the system. Normally an upgrade was not just a straight upgrade but we added functionality at the same time. We paid for any application changes we made that required involvement from Equifax. (probe) I did feel that Equifax was headed in the right direction with the added functionality to the system. Again, I am not business I am IT. I thought they were making improvements that were beneficial to us from an IT perspective. I can’t answer whether those upgrades met business’ concept of where they needed to go. (IT Project Manager) Competitor Insight – Actions Competitors are Undertaking to Acquire Account/Gain Share Equifax’s primary competitor. Experian and TransUnion. (Credit Business Analyst) Experian and TransUnion. (IT Project Manager) Emerging strengths of Equifax’s competitors that could impact client’s business. I am just getting to know the Experian platform. There is a lot of user flexibility with the Experian system. It seems to be more engaged with our management for strategic solutions. We should be able to add and subtract score cards as we want from within the platform. We can change our whole rules flow if we want to. With flexibility comes a whole lot of responsibility. We only use TransUnion as data providers. They are okay but a little difficult to work with as compared to Equifax. In my experience with credit reporting Equifax is great to work with. They understand our need to test and our need for new subscriber codes and it is a little more difficult to work with TransUnion. (probe) Experian’s platform is easier to work with when you consider what our management wants to do and where they want to take the company. (Credit Business Analyst) Emerging weaknesses of Equifax’s competitors that could impact client’s business. I don’t see any downsides yet. It is very flexible for us to change. My management is going to have 6 people who can make changes. That scares me a bit because of control. I am still not sure about deployment. With Equifax we can schedule deployment. Jonathan, our CFT, is on hand to help us. l am not sure how that will work with Experian. It is too soon to know how that will work. (Credit Business Analyst) I was involved early on in the RFP process but I have not been involved in the detailed discussions since they made the decision to go with Experian. I have heard some things about the Experian product that confuse me. It may just be because I am not involved in it. I have heard that there are three applications that work together. Things can be done in multiple places in those applications. InterConnect was all controlled by the “Rules Editor”, so this provided a single point of making changes versus multiple editing tools. I think it was a little more straightforward. I really don’t have a lot of background to do a comparison simply because I have not been involved in seeing anything other than the high level presentations that they did early in the process. (probe) We are still in the process of transition. They are working on the design. I have a

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project manager working for me who is managing that project. There are a couple of Business Analysts doing the analytical work for the business side. In the past it had normally been me but due to other work load I haven’t been as involved. (IT Project Manager) Equifax’s competitors’ primary differential over Equifax. I am not sure how to answer that. From my perspective I have been happy with the Equifax team and the product. I was involved in the RFP that chose Experian but I wasn’t really the decision maker. If I had to rate them it would be Equifax, Experian, and TransUnion as far as response to what I need. We are going to Experian and I truly don’t have enough experience to decide if they are stronger than Equifax. (Credit Business Analyst) Equifax’s primary differential over its competitors. I am really not sure. (Credit Business Analyst) Value Proposition - Increased Revenue, Reduced Costs and Increased Value Examples of how Equifax failed to sustain value. I want to mention some positives first. I most appreciated that over the 8 years I have worked with them that we had different teams working with us. In the first few years we struggled with design and the people we worked with. When Equifax went to the CFTs with Wade and Jonathan, I think that was the best experience to have that dedicated team to bounce question off of. From my perspective they have been great. As we got ready to move to the different platforms they were always there to help us make our rule changes and suggest better ways to do things. (probe) I guess they failed to sustain value in the relationship between sales and our upper management. I am not that close to know what happened or who tried what. (probe) Prior to our management change and the change in the Equifax sales team we had a great relationship with the sales team. We were smaller. We had only 2 VPs and we had a sales rep. That person’s immediate boss seemed to be there for us. We could ask questions and get answers quickly. When our management changed some of my responsibilities changed and I didn’t have as much to do with the sales team as I had previously. We now had 3 or 4 people working with the Equifax sales team. I have heard our management was disappointed but I don’t know specifics. (Credit Business Analyst) I really wasn’t involved in the discussion why they chose Experian over Equifax. I can’t honestly say what it was that made them make the decision to switch over. I think there were positives for both systems. There were pluses and negatives on both sides but nothing I saw was major. The decision to make the change was made at the VP level mostly on the business side. I really wasn’t involved in any discussions as to choosing one over the other. (IT Project Manager) Communications Tools – Effective Tools and Perceived Areas for Improvement Communication and management reports that were effective and on target with requirements. Equifax customized the reporting for us. Unless you want me to dive into a lot of details, I would say that we were happy with the reporting aspects. (Credit Business Analyst)

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How Equifax could have leveraged its service and relationship to become and sustain world-class performance, if budgets and other constraints were not factors. Equifax needed to be flexible with our new management. I don’t know where the breakdown happened. We had a great relationship with sales and they were here in Minneapolis regularly. They were on a weekly phone call. When our new management came in they didn’t think the weekly call was important enough at first. It seemed like there was a lack of communication. I don’t know if our management felt that Equifax should have reached out or if we should have reached out and introduced our new management. I think it was communication and bringing new ideas to the client. That is what I am hearing they wished Equifax would have done better. (Credit Business Analyst) I think one thing we saw in the Equifax was giving the business more control over what the UI (User Interface) looked like. I think there is potential to add some more functionality to InterConnect to give a little bit more flexibility to the companies who are licensing the product. In terms of the technical team I don’t think there is anything they could do to improve. The team we had was an excellent experience. I don’t have any recommendations for them. In terms of the account team, over the last couple of years our company has had a lot of management changes. With all of the management changes I think we need strong communications at a high level with our vendors. This is certainly a trend I observed over the last few years. There has been a lot more emphasis on that, especially since we grew to a lot more VPs. We are seeing some strong benefits with that and over the last years, this grew to be expected by our new management. The more that senior management of vendors can stay in touch with senior management at our company, the more beneficial it would be to them. Vendors should also make sure they not only satisfy the technical side, but also continue to meet the needs of the business side as they are the ones that make all the contracting decisions. (probe) I think this is a stronger trend then it was a few years ago. In the past I have seen that there has been communications but they really need to be across different levels of executives. For example, two years ago we had 1 VP and now we have 5 VPs in the credit area. The one VP could rely on other people for communications and it wasn’t quite as critical. But with 5 VPs you need to be sure that they are all kept in the loop. There need to be discussions at a higher level. It has become more important in the last couple of years. I have seen that with other vendors as well as Equifax. (IT Project Manager) Strategic Planning - Opportunities & Goal Setting (Respondent’s Comments) Strategic initiatives and plans that may require issuing new RFPs. I am not sure. (Credit Business Analyst) Whether Equifax will be included in these initiatives. I don’t know. (IT Project Manager) Additional Comments (Respondent’s Comments) I would suggest that they be aware of changes that happen in a company. Equifax was great when we were first shut down in 2002. They got us up and going. We had a great relationship. I am not sure if Equifax took for granted that we were always going to be their client. I kind of have a feeling that that happened with the changes in the sales team. The handoff seemed cumbersome between our companies. Be aware of your customers’ needs; keep the lines of communication open on both ends. I will admit that our

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management team dropped the ball, too. Equifax came in for a daylong meeting and my director and the two VPs came and went. I don’t even know if the chief credit officer was in town that weekend. I think on both ends there were issues. (probe) The change in the Equifax sales team happened at the same time we had a change in management. We got a new Chief Credit officer and shortly after that they changed the sales staff at Equifax. My VP left the company and I got a new Director. There were 3 or 4 changes in personnel in 4 months’ time. Our sales rep, her boss, and her boss’ boss got changed. My VP left, we got a new director, we got a whole new VP in Customer Acquisitions and he had his own way of thinking about things. It was like a comedy of errors. It was a setup for the perfect storm. The VP New Customer Acquisition would also agree that it was not due to Equifax’s technical support team that we made the decision to change, because they were top-notch. The VP and I even participated in a reference call with the technical team lead, Wade. (Credit Business Analyst)