Page 96 - Flip Banks TG

APPENDIX 2 Fraud Calculation

Appendix 2

Fraud Calculation

Fraudulent credit cards = 556,000

Assuming minimum annual credit card charges = $10

Fraudulent Customer Accounts = 2 million

Assuming cross selling conversion = 50%

Assuming margin from product = $50

Assuming no. of products sold per = 8 customer

Fraud amount = (1.1M X $10) + (1.1 M X $50X8) + +

Overdraft fees

+ Late fees

= > $500 M

Penalty = $185M