From: J'[redacted] <[redacted]@cardconnect.com>
Sent: Monday, August 28, 2017 1:28:48 PM
To: Mike Watson
Cc: [redacted]
Subject: RE: Spreetail

Got it. Let me know if there's anything else I can do. I'll talk to you after 2.

From: Mike Watson
Sent: Monday, August 28, 2017 1:26 PM
To: J'[redacted]
Cc: [redacted]
Subject: Re: Spreetail

I think they're going to show is the decline was related to address verification. We have a few
other instances where they had similar issues and shifted to a different solution.

Sent from my iPhone

On Aug 28, 2017, at 1:23 PM, J'[redacted] <[redacted]@cardconnect.com> wrote:

> They said that they would be presenting a case to the court that we directly caused their 2.5m
> in losses.
>
>
>
> Sent from my iPhone
>
>> On Aug 28, 2017, at 1:14 PM, Mike Watson <[redacted]
>> wrote:
>>
>> What did the suit say?
>>
>> Sent from my iPhone
>>
>>> On Aug 28, 2017, at 12:13 PM, J'[redacted][redacted]@cardconnect.com>
>>> wrote:
>>>
>>> FYJ
>>>
>>> ---------- Forwarded message ---------
>>> From: REDACTED
>>> Date: Mon, Aug 28, 2017 at 11:30 AM
>>> Subject: Spreetail Lawsuit
>>> To: Marketing Team <[redacted]
>>> [redacted]
>>> Hey team,
>>>
>>>
>>> I wanted to let you know that we were officially served with the lawsuit by Spreetail on Friday
>>> afternoon. I am attaching the court filing to this email so you can be aware of the specifics
>>> but wanted to give you an overview as well.
>>>
>>>
>>> The lawsuit covers multiple complaints but is primarily focused on the losses that Spreetail
>>> incurred in Q420] 6. Spreetail says that we "hid" those losses even thought: 1) they would have
>>> been able to see declines themselves if they were looking at their own portal data, 2) we had
>>> multiple conversations regarding those declines and 3) the numbers and percentages of those
>>> declines were on their monthly statements.
>>>
>>> We believe that it's going to be very difficult for Spreetail to make their argument stick, but
>> it
>>> comes with the territory.
>>>
>>> REDACTED
>>>
>>>
>>>
>>>
>>>>

>From:J'[redacted]
>Sent: Monday, August 28, 2017 1:35:13 PM
>To: Mike Watson
>Subject: RE: Spreetail

>Here you go

>From:Mike Watson
>Sent: Monday, August 28, 2017 1:33 PM
>To: J'[redacted]
>Subject: Re: Spreetail

>Can you send that along?

>Sent from my iPhone

>> On Aug 28, 2017, at 1:23 PM, J' [redacted]@cardconnect.com> wrote:
>>
>> They said that they would be presenting a case to the court that we directly caused their 2.5m
>> in losses.
>>
>>
>>
>> Sent from my iPhone
>>
>>> On Aug 28, 2017, at 1:14 PM, Mike Watson <[redacted]
>>> wrote:
>>>
>>> What did the suit say?
>>>
>>> Sent from my iPhone
>>>
>>>> On Aug 28, 2017, at 12:13 PM, J'[redacted][redacted] wrote:
>>>>
>>>> FYI
>>>>
>>>> ---------- Forwarded message ---------
>>>> From: [redacted]
>>>> Date: Mon, Aug 28, 2017 at 11:30 AM
>>>> Subject: Spreetail Lawsuit
>>>> To: Marketing Team <[redacted]
>>>> [redacted]
>>>>
>>>> Hey team,
>>>>
>>>>
>>>> I wanted to let you know that we were officially served with the lawsuit by Spreetail on Friday
>>>> afternoon. I am attaching the court filing to this email so you can be aware of the specifics
>>>> but wanted to give you an overview as well.
>>>>
>>>>
>>>> The lawsuit covers multiple complaints but is primarily focused on the losses that Spreetail
>>>> incurred in Q42016. Spreetail says that we "hid" those losses even thought: I) they would have
>>>> been able to see declines themselves if they were looking at their own portal data, 2) we had
>>>> multiple conversations regarding those declines and 3) the numbers and percentages of those
>>>> declines were on their monthly statements.
>>>>
>>>>
>>>> We believe that it's going to be very difficult for Spreetail to make their argument stick, but it
>>>> comes with the territory.
>>>>
>>>> REDACTED
>>>>
>>>>
>>>>
>>>>
>>>>>

From: J' [redacted] [redacted]
Sent: Monday, August 28, 2017 2:00:52 PM
To: Mike Watson
Subject: RE: Spreetail

I'm free now...

From: Mike Watson
Sent: Monday, August 28, 2017 1:56 PM
To: J'[redacted]
Subject: Re: Spreetail

Let me know when you're free and I'll swing by

Sent from my iPhone

On Aug 28, 2017, at 1:35 PM, J'[redacted] [redacted]@cardconnect.com> wrote:

> Here you go
>
> From: Mike Watson
> Sent: Monday, August 28, 2017 1:33 PM
> To: J'[redacted]
> Subject: Re: Spreetail
>
> Can you send that along?
>
> Sent from my iPhone
>
>> On Aug 28, 2017, at 1:23 PM, J'[redacted]@cardconnect.com> wrote:
>>
>> They said that they would be presenting a case to the court that we directly caused their 2.5m
>> in losses.
>>
>>
>>
>> Sent from my iPhone
>>
>>> On Aug 28, 2017, at 1:14 PM, Mike Watson <[redacted]@cardconnect.com>
>>> wrote:
>>>
>>> What did the suit say?
>>>
>>> Sent from my iPhone
>>>
>>>> On Aug 28, 2017, at 12:13 PM, J'[redacted] [redacted]@cardconnect.com>
>>>> wrote:
>>>>
>>>> FYI
>>>>
>>>> ---------- Forwarded message ---------
>>>> From: [redacted]
>>>> Date: Mon, Aug 28, 2017 at 11:30 AM
>>>> Subject: Spreetail Lawsuit
>>>> To: Marketing Team <[redacted]
>>>> [redacted]
>>>> Hey team,
>>>>
>>>>
>>>> I wanted to let you know that we were officially served with the lawsuit by Spreetail on Friday
>>>> afternoon .. I am attaching the court filing to this email so you can be aware of the specifics
>>>> but wanted to give you an overview as well.
>>>>
>>>>
>>>> The lawsuit covers multiple complaints but is primarily focused on the losses that Spreetail
>>>> incurred in Q42016. Spreetail says that we "hid" those losses even thought: 1) they would
>>>> have been able to see declines themselves if they were looking at their own portal data, 2) we
>>>> had multiple conversations regarding those declines and 3) the numbers and percentages of
>>>> those declines were on their monthly statements.
>>>>
We believe that it's going to be very difficult for Spreetail to make their argument stick, but it
>>>> comes with the territory,
>>>>
>>>> [redacted]

From:J'[redacted]@cardconnect.com>
Sent: Monday, August 28, 2017 1:23:39 PM
To: Mike Watson
Subject: RE: Spreetail

They said that they would be presenting a case to the court that we directly caused their 2.5m in losses.



Sent from my iPhone

> On Aug 28, 2017, at 1:14 PM, Mike Watson <[redacted]@cardconnect.com> wrote:
>
> What did the suit say?
>
> Sent from my iPhone
>
>> On Aug 28, 2017, at 12:13 PM, J'[redacted] [redacted]@cardconnect.com> wrote:
>>
>> FYI
>>
>> ---------- Forwarded message ---------
>> From:[redacted]
>> Date: Mon, Aug 28, 2017 at 11:30 AM
>> Subject: Spreetail Lawsuit
>> To: Marketing Team <[redacted]>
>> [redacted]
>>
>> Hey team,
>>
>>
>> I wanted to let you know that we were officially served with the lawsuit by Spreetail on Friday
>> afternoon. I am attaching the court filing to this email so you can be aware of the specifics
>> but wanted to give you an overview as well.
>>
>>
>> The lawsuit covers multiple complaints but is primarily focused on the losses that Spreetail
>> incurred in Q42016. Spreetail says that we "hid" those losses even thought: 1) they would have
>> been able to see declines themselves if they were looking at their own portal data, 2) we had
>> multiple conversations regarding those declines and 3) the numbers and percentages of those
>> declines were on their monthly statements.
>>
>>
>> We believe that it's going to be very difficult for Spreetail to make their argument stick, but it
>> comes with the territory.
>>
>> [redacted]
>>
>>
>>
>>
>>>

From: Mike Watson
Sent: Monday, August 28, 2017 1:33:33 PM
To: J'[redacted]
Subject: Re: Spreetail

Can you send that along?

Sent from my iPhone

> On Aug 28, 2017, at 1:23 PM, J'[redacted]@cardconnect.com> wrote:
>
> They said that they would be presenting a case to the court that we directly caused their 2.5m
> in losses.
>
>
>
> Sent from my iPhone
>
>> On Aug 28, 2017, at 1:14 PM, Mike Watson <[redacted]
>> wrote:
>>
>> What did the suit say?
>>
>> Sent from my iPhone
>>
>>> On Aug 28, 2017, at 12:13 PM, J'[redacted] [redacted]@cardconnect.com> wrote:
>>>
>>> FYI
>>>
>>> ---------- Forwarded message ---------
>>> From: [redacted]
>>> Date: Mon, Aug 28, 2017 at 11:30 AM
>>> Subject: Spreetail Lawsuit
>>> To: Marketing Team <[redacted]
>>> Cc: [redacted]
>>> Hey team,
>>>
>>>
>>> I wanted to let you know that we were officially served with the lawsuit by Spreetail on Friday
>>> afternoon. I am attaching the court filing to this email so you can be aware of the specifics
>>> but wanted to give you an overview as well.
>>>
>>>
>>> The lawsuit covers multiple complaints but is primarily focused on the losses that Spreetail
>>> incurred in Q42016. Spreetail says that we "hid" those losses even thought: 1) they would have
>>> been able to see declines themselves if they were looking at their own portal data, 2) we had
>>> multiple conversations regarding those declines and 3) the numbers and percentages of those
>>> declines were on their monthly statements.
>>>
>>>
>>> We believe that it's going to be very difficult for Spreetail to make their argument stick, but it
>>> comes with the territory.
>>>
>>> REDACTED

From: REDACTED
Sent: Tuesday, May 09, 2017 4:54 PM
To: REDACTED
Subject: RE: Spreetail

Yes. That's the one that was originally through [redacted] correct

From: REDACTED
Sent: Tuesday, May 9, 2017 4:22 PM
To: REDACTED
Subject: Re: Spreetail

Is this the main account?

Sent from my iPhone

> On May 9, 2017, at 4:13 PM, REDACTED wrote:
>
> Let me know if you guys need my help.
>
>> On May 9, 2017 4:03 PM, "REDACTED wrot
>>
>> Spoke to [redacted]. He's going to hold off on calling them today.
>>
>>> On May 9, 2017 3:58 PM, "REDACTED wrote:
>>>
>>> Here is merchant number [redacted]
>>>
>>>> On May 9, 2017 3:47 PM, "REDACTED wrote:
>>>>
>>>> Spreetail
>>>>
>>>>> On May 9, 2017 3:36 PM, "REDACTED wrote:
>>>>>
>>>>> Who is the MID for?
>>>>>
>>>>>> On May 9, 2017 2:36 PM, "REDACTED wrote:
>>>>>>
>>>>>> Do you all have some time to take a look at a MID today?
>>>>>>
>>>>>> (b)(6)

From: REDACTED [mailto:REDACTED]
Sent: Friday, May 26, 2017 3:29 PM
To: REDACTED
Cc: REDACTED; REDACTED
Subject: RE: Spreetail - URGENT

I think the issue is that they want to look back at the reporting (we only provide 6 months of online
reporting to align with PCI requirements. They need to go back to look at their Q4 2016 and it is
not online anymore. We have static pdf copies of the statement files.

They could always go to the merchant statement to pull this data.

From: REDACTED
Sent: Monday, May 08, 2017 2:43 PM
To: REDACTED; REDACTED; REDACTED
Subject: FW: Spreetail declines

FYI ..

From: REDACTED [mailto:REDACTED
Sent: Monday, May 08, 2017 1:58 PM
To: REDACTED; REDACTED; REDACTED
Cc: REDACTED
Subject: Spreetail declines

Can you all confirm the volume of declines Spreetail is experiencing?

Here is the data at a high level:
Auth success: [redacted]
Auth declines: [redacted]

From: REDACTED [mailto:REDACTED
Sent: Tuesday, November 22, 2016 11:25 AM
To: REDACTED; REDACTED
Subject: FW: Spreetail

This is from Spreetail to all of their vendors.

From: REDACTED [mailto:REDACTED
Sent: Friday, November 18, 2016 4:50 PM
To: REDACTED
Cc: REDACTED; REDACTED; REDACTED
Subject: Spreetail

From:REDACTED
Sent: Friday, May 5, 2017, 11:17 AM
To: REDACTED
Subject: FW: Spreetail

They have a new merchant account processing with us.

From: REDACTED [mailto:REDACTED]
Sent: Friday, May 05, 2017 11:13 AM
To: REDACTED
Cc: REDACTED
Subject: RE: Spreetail

MID is: [redacted]

From:REDACTED
Sent: Friday, May 26, 2017 4:47 PM
To: 'REDACTED
Cc: REDACTED; REDACTED
Subject: RE: Spreetail - URGENT

We aren't able to pull up history that old.  All of our reporting is kept for 6 months per PCI
requirements.

The merchant statements would have to show this information but we do not keep them internally
past 6 months.

Thanks

REDACTED

From: REDACTED[mailto:REDACTED
Sent: Friday, May 26, 2017 3:29 PM
To: REDACTED
Cc: REDACTED; REDACTED
Subject: RE: Spreetail - URGENT

I think the issue is that they want to look back at the reporting (we only provide 6 months of online
reporting to align with PCI requirements). They need to go back to look at their Q4 2016 and it is
not online anymore. We have static pdf copies of the statement files.

They could always go to the merchant statement to pull this data.

From: REDACTED [mailto:REDACTED
Sent: Saturday, May 27, 2017 1:03 PM
To: REDACTED; REDACTED
Cc: REDACTED
Subject: Re: Spreetail - URGENT

Sorry for all the emails guys. I had a call with [redacted] today and got some
more clarification on a couple of things.

1. The decline rate for Q4 that [redacted] is referencing is 25%. This 25%
decline rate only includes transactions that were declined due to AVS
mismatch, all other declines have been filtered out. Do we have the ability
to specify decline reasons when running a report?

Thanks,

REDACTED

On Fri, May 26, 2017 at 4:47 PM, REDACTED wrote:

> We aren't able to pull up history that old. All of our reporting is kept for 6 months per PCI
> requirements.
>
> The merchant statements would have to show this information but we do not keep them internally
> past 6 months.

From: REDACTED [mailto:REDACTED]
Sent: Tuesday, July 11, 2017 11:26 AM
To: REDACTED
Cc: REDACTED; REDACTED; REDACTED
Subject: RE: CardConnect Support for Spreetail

The CardConnect gateway account is through Bolt. I see the setting you are referencing below and
that is set at the VAR level, so that isn't something we can change for just this account, it is all or
nothing.

I do see that they are still using a direct gateway integration for the merchant account they went
live with earlier this year.

Let me know if I can provide any further details.

Thanks,
REDACTED

From: REDACTED
Sent: Friday, July 7, 2017 5:10 PM
To: REDACTED
Cc: REDACTED; REDACTED; REDACTED
Subject: Re: CardConnect Support for Spreetail

Thanks, REDACTED. A couple of things:

•    Can you send me a screen shot of bolt showing the decline recovery settings?
•    My understanding is that the original bolt integration is no longer being used. Is that correct?

Thanks
REDACTED

Sent from my iPhone

On Jul 7, 2017, at 4:50 PM, REDACTED wrote:

>
> All,
>
>
> REDACTED called in to support the Spreetail account listed below. The merchant is stating they
> have a 30% decline rate on their transactions.
>
>
> (b)(6)
>
> Merchant: Spreetail
>
> MID: [redacted]

From: REDACTED [mailto:REDACTED]
Sent: Friday, August 25, 2017 3:09 PM
To: REDACTED
Cc: REDACTED; REDACTED; REDACTED
Subject: Fwd: Spreetail - AVS Decline Help

FYI. All the accounts are on the same settings in Bolt ...

Begin forwarded message:

From: "REDACTED" <REDACTED
Date: August 25. 2017 at 2:58:26 PM EDT
To: "REDACTED"<REDACTED
Cc: "REDACTED" <REDACTED."REDACTED"
<REDACTED
Subject: Re: Spreetail - AVS Decline Help

REDACTED,

Can you have someone on your team provide us a breakdown of the decline % or
# of declines that are due to AVS (Address Verification System) declines for
MID# [redacted] in comparison to MID# [redacted] for July and
Aug (MTD)?

Our customers billing address would rarely, if ever, change so we want ensure
there are no settings differences between the accounts that would cause AVS
declines to increase.

Thanks,
REDACTED

On Fri, Aug 25, 2017 at 1:44 PM, REDACTED, wrote:

> REDACTED -
>
>
>
> You and I spoke earlier today about the gateway decline rate differences between the
> two Spreetail MIDs.
> ([redacted] & [redacted] Below is a high level recap of what we
> discussed.
>
>
>
> MID [redacted] Decline Rate:
>
>
>
>   July- 13%
>   August MTD- 14%
> MID [redacted] Decline Rate:
>
>
>
>   July- 25%
>  August MTD- 24%

Kinnealy, Owen
From:
Sent:
To:
Subject:
Attachments:
Kinnealy, Owen
Tuesday, May 30, 2017 3:58 PM
Arnold, Luke
Fwd: Spreetail Follow up
image1.png; image2.png; image3.png; image4.png; image5.png

Begin forwarded message:

From: "Leaverton, Brett" <Brett.Leaverton@spreeta1l.com>
Date: May 30, 2017 at 1:24:48 PM EDT
To: "'Kinnealy, Owen'" <Owen.Kinnealy@cardconnect.com>
Cc: "Bauer, Jeff" <Jeff.Bauer@cardeonnect.com>, "Lemp, Matt" <Matt.Lemp@cardconnect.com>
Subject: RE: Spreetail Follow up

Owen,

I am still waiting for a response on this.

Last Thursday, we had another discussion with Card Connect where we were trying to obtain data from Q4 2016. In
Q4 2016, we were told that there was an approximate 25% decline rate, The problem is that we were Just recently made
aware of this Issue (we were told in early May 2017). We are trying to pull archived data to help pinpoint the core
issue(s) we were experiencing, because the declines cost us around S2.5M. Card Connect currently has only provided
us documents that include all of the declines, and have limited ways to break out the information.

Here are some examples of the reports we have:

Declined Reason

Gateway

Transactions

AUTH CAPTURED

Total

Amount

Amount

•

•

AVS

2,724
162
22
461,977.96
67,691.07

5,147.70

DUPLICATE

EXCEEDS MAX

INVALID DATA

162

24,636.27

1

1
34

150.00
• 9,459.00
14,088.97

1,455.99
358,401.35

PICKUP CARD
PROCESSOR

15
605

VOID

11

96

10,267.40
137,816.72

2,621.31
72.59

Total

3,989

397

692,165.57

431,367.31

Card Connect has stated that the system only saves merchant history for 6 months, and that it is a PCI requirement,
but that does not seem right to us.

We are looking for clarity on this situation, so any direction or gut feelings on this would help.

Thanks,

Brett Leaverton | Chief Financial Officer
250 Innovation Campus Drive, Ste 150 I Lincoln, NE 68508
Office: REDACTED I Mobile: REDACTED
spreeta1l.com I Facebook I Twitter I LinkedIn

From: Kinnealy, Owen [mall to: Owen.Kinnealy@cardconnect.com]
Sent: Monday, May 15, 2017 2:28 PM
To: Lemp, Matt; REDACTED
Cc: Bauer, Jeff
Subject: Spreetail Follow up

Matt/ REDACTED,

I wanted to follow up with you both regarding Spreetail. As you both know we had a call to discuss their recent
decline issues. I believe one of the action Items from that call was for Card Connect to confirm the data Spreetail was
providing,

Jeff,

To confirm, we aligned with the data below didn't we? Or did our data differ from this at all?

Auth success: 1,906,173
Auth Declines: 807,117

Lastly, I've been getting calls and emails that have contained some legal verbage. Do you both have any guidance here
or possibly another resource for me to direct these Inquiries to until this is resolved.

Thanks

Owen Kinnealy I Strategic Partner Manager
CardConnect I 5000 Southwester, Avenue, Suite 5000W, King of Prussia, PA 19406
o: (484) 581-2285 I C: (484) 354-8974

Ie]
cardconnect.

This email,and any attachments, Is intended only for use by the addressee(s) named herein and may contain confidential and/or legally
privileged Information. If you are not the intended recipient of this email, you are hereby notified that any dissemination, distribution or
copying of this email,and any attachments, Is strictly prohibited. Ifyou have received this email in error, please Immediately notify the
sender and permanently delete the original and any copy of this email and any printout thereof.

Kinnealy, Owen
From:
Sent:
To:
Cc:
Subject:

Kinnealy, Owen
Monday, August 28, 2017 7:55 PM
Lemp, Matt
O'Donnell, Kyle; Bauer, Jeff; Watson, Michael; REDACTED; REDACTED
RE: Legal - Spreetail

Thanks, Matt.

I agree with not providing more information and keeping it high-level as Jeff mentioned earlier.

Owen Kinnealy | Director - ISO Sales
CardConnect | 5000 Southwester, Avenue, Suite 5000W, King of Prussia, PA 19406
  : (484) 581-2285 | C: (484) 354-8974

From: Lemp, Matt
Sent: Monday, August 28, 2017 7:24 PM
To: Kinnealy, Owen <Owen.Kinnealy@cardconnect.com>
Cc: O'Donnell, Kyle <kyle.odonnell@cardconnect.com>; Bauer, Jeff <Jeff.Bauer@cardconnect.com>; Watson, Michael
<Michael.Watson@cardconnect.com>;[REDACTED]
Subject: Re: Legal - Spreetail

Agree...
I would also caution about providing any data we don't have to.

Sent from my iPhone

Kinnealy, Owen

From:
Sent:
To:
Cc:

Subject:

Kinnealy, Owen
Saturday, August 26, 2017 12:04 PM
REDACTED; REDACTED
Bauer, Jeff; Lemp, Matt; REDACTED; REDACTED; REDACTED;
Spreetail - AVS Decline Help

REDACTED-

I have record of your previous email regarding the data pull. I've resurfaced that email With the appropriate Card
Connect parties.

I have a call with my team Monday morning, where I expect to have timing on the response.

Thanks again,

Owen Kinnealy | Director - ISO Sales
CardConnect | 5000 Southwester, Avenue, Suite 5000W, King of Prussia, PA 19406
O: (484) 581-2285 | C :(484) 354-8974

From: REDACTED
Sent: Saturday, August 26, 2017 11:48 AM
To: Kinnealy, Owen <Owen.Kinnealy@cardconnect.com>; REDACTED.
Cc: Bauer, Jeff <JeffBauer@cardconnect.com>; Lemp, Matt <Matt.Lemp@cardconnect.com>; [REDACTED]
Subject: Re: Spreetail - AVS Decline Help

Owen,

Just wanted to follow up on the data request below from yesterday. Can you confirm a time on Monday that we
could expect to receive a reply by?

Thanks,
REDACTED

On Aug 25, 2017, at 2:58 PM, REDACTED wrote:

> REDACTED,
>
> Can you have someone on your team provide us a breakdown of the decline % or # of declines that
> are due to AVS (Address Verification System) declines for
> MID# [redacted] in comparison to MID# [redacted] for July and Aug
(MTD)?
> Our customers billing address would rarely, if ever, change so we want ensure there are no settings
> differences between the accounts that would cause AVS declines to increase.
>
> Thanks,