PRESS RELEASES

July 29, 1999
First Union Global Cash Management Introduces Teller Positive Pay
New Product Expands Fraud Protection for Customers

CHARLOTTE - First Union's Global Cash Management Division is offering Positive Pay protection at the teller line, leading the way in providing customers with enhanced fraud protection. The basic positive pay service has been in place at First Union since the late 1980s, helping customers ensure that checks presented for payment are authentic. Through its innovative use of technology, First Union is pioneering implementation of positive pay for checks presented over the teller line.

The basic Positive Pay service enables customers to return any unauthorized checks posting to their account. The process is simple:
The customer provides First Union with a file of checks issued.
First Union matches the serial number and amount of all checks presented for payment against the file.
Any check that does not match is reported to the customer.
The customer instructs First Union to pay or return any exceptions.
With Teller Positive Pay, pay or no-pay instructions will be systematically provided to tellers, based on check issue information warehoused by the bank. When the teller scans checks presented for payment, the system will alert the teller to refuse payment if the check does not match against the information provided by the corporate customer. First Union's comprehensive East Coast franchise and its single systems platform will enable customers to benefit from increased fraud protection from Connecticut to Florida. First Union began piloting Teller Positive Pay on July 1.

John Thigpen, chief financial officer of Charlotte-based Strategic Outsourcing, Inc., sees Teller Positive Pay as an important benefit for his company, a professional employer organization that provides payroll and benefits services to clients. Strategic Outsourcing processes paychecks for approximately 15,000 employees throughout the Southeast. A large number of these checks are cashed at the teller line rather than deposited in an account. Therefore the added protection of Teller Positive Pay is key.

"We know the issues involved very well and we have had problems in the past with check fraud," said Thigpen. "With Teller Positive Pay, if we don't cut the check, it won't clear the bank. Everything we can do to increase security is in the best interest of both our company and the bank."

According to a study conducted by Ernst & Young, 500 million checks are forged annually in the U.S., resulting in losses of $10 billion. Various studies report that check fraud is growing in excess of 20 percent a year, and it has been estimated that over 60% of U.S. corporations experience payment fraud.

"Positive Pay is a great example of how First Union is partnering with customers to fight a common enemy: check fraud," said Michael Daley, senior vice president in First Union's Global Cash Management Division. "Expanding protection to the teller line will increase the effectiveness of this product, especially for our customers who issue a large number of checks that are cashed in our financial centers."

Electronic commerce, Internet services, nationwide lockbox processing and a variety of PC-based options are among the many cash management services available at First Union. First Union offers a full range of collection, disbursement, information reporting and electronic commerce services designed to improve day-to-day efficiency of company treasury operations and maximize company return on cash assets. First Union's cash management products have earned top marks in surveys by Phoenix-Hecht and Ernst & Young. First Union is the third largest cash management bank in the country, according to Ernst & Young.

First Union is a leading provider of financial services to more than 16 million customers throughout the East Coast and the nation. It is the nation's sixth largest bank holding company with assets of $230 billion as of June 30, 1999. The company operates full-service banking offices in Connecticut, Delaware, Florida, Georgia, Maryland, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, Tennessee, Virginia and Washington, D.C.

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