DSS Comments on Landmark Coupon Fraud Case

ROCHESTER, N.Y., July 17, 2012 /PRNewswire/ -- Document Security Systems, Inc. (NYSE Amex: DSS; "DSS"), a leading developer and integrator of cloud computing data security, Radio Frequency Identification ("RFID") systems and security printing technologies which prevent counterfeiting, product diversion and brand fraud, commented today on the recent landmark case of coupon fraud discovered in Arizona. (See http://www.azfamily.com/news/PD-Counterfeit-coupon-operation-busted-in-Phoenix-161960155.html for more information.)

The case involves the production and sale of counterfeit coupons for products offered by 40 of the nation's largest brand owners.  Approximately 4 years ago, high quality counterfeit coupons began surfacing in the United States from an unknown source.  Several of the affected brand owners, along with the Coupon Information Council (CIC), hired private investigators to pursue the source of the counterfeit coupons. 

The investigation led to 3 homes in Arizona where Police and Federal agents seized boxes of coupons, vehicles, guns and other property. The seized coupons were variations and reproductions of previously valid coupons and had a value in excess of $25 million dollars with the total estimated economic loss to the companies of between $400 million and $600 million.  The ringleader of the coupon scam was determined to have brought in the fraudulent coupons from overseas and sold them on a website for 50% of face value.  According to the article, the CIC is calling this the largest counterfeit coupon case the industry has ever seen.

Patrick White, CEO of Document Security Systems commented, "This case of coupon fraud demonstrates the severity of the issue and the growing financial loss that brand owners have been experiencing.  Coupons that were once unprotected, were counterfeited, altered and mass produced outside the country and then imported for resale. While use of these coupons is illegal, consumers are purchasing the counterfeit coupons online, unaware of the scheme and associated risk. The quality of the re-engineered counterfeit coupons is high enough that cashiers and stores are accepting and processing them on a regular basis without knowledge of the fraud."   White continued, "The CIC has been working diligently with the brand owners to help them protect their coupons and also educate the public as to the security features that now appear on coupons.  I commend them on their diligent work in tracking down the source of these fraudulent coupons.  In our opinion, the answer to this growing problem is 3-fold: use of security technologies on the coupons, commitment to coupon authentication at the retail level, and consumer education on the risks of unlawful use of counterfeits coupons."

DSS offers a wide range of state-of-the-art patented solutions against counterfeit coupons for both traditional printed coupons and digital coupons. DSS works directly with brand owners to protect the coupon's images and information from being captured easily and accurately on copiers and desktop scanners.   DSS has experienced increased demand from brand owners for coupon security over the last few years and very specifically over the last few months.

About DSS (Document Security Systems, Inc.):

DSS provides counterfeit prevention, RFID tracking and comprehensive brand and digital information protection solutions to corporations, governments, and financial institutions around the world.  DSS develops and manufactures secure printed products such as labels, packaging, ID Cards, RFID Cards and tags and documents using their AuthentiGuard line of patented optical deterrent and authentication technologies. The company also provides cloud computing security services, provides disaster recovery backup, writes custom software solutions, and integrates track and trace technologies.

For more information on DSS and its subsidiaries, please visit DSSsecure.com. 

DSS is comprised of four operating units:

DSS Plastics Group – Custom RFID and Plastic ID Card Solutions (Brisbane, CA) PH: 1-415-585-9600

DSS Packaging Group – Commercial and Secure Packaging Manufacturing (Victor, NY) PH:  585-924-8460

DSS Printing Group – Commercial and Security Printing Manufacturing (Rochester, NY) PH: 585-341-3100

DSS Digital Group – Cloud Computing Services and Secure Digital/Internet Documents (Rochester, NY) PH: 585-746-6958

For more information on DSS and its subsidiaries, please visit DSSsecure.com.

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For more information:
Investor Relations:
CenturyIR.com
Phone:  212-776-1030

Safe Harbor Statement

The statements contained in this press release that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbors created thereby. These forward-looking statements include, but are not limited to, statements regarding expectations for future financial performance, potential sales from new and existing customers, expected benefits from the Company's cost cutting efforts and/or statements preceded by, followed by or that include the words "believes," "could," "expects," "anticipates," "estimates," "intends," "plans," "projects," "seeks," or similar expressions, all of which involve uncertainty and risk. Many of these risks and uncertainties are discussed in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2011 filed with the Securities and Exchange Commission (the "SEC"), and in any subsequent reports filed with the SEC, all of which are available at the SEC's website at www.sec.gov. It is possible the company's future financial performance may differ from expectations due to a variety of factors including, but not limited to, the risks referred to above, and changes in economic and business conditions in the world, increased competitive activity, achieving sales levels to fulfill revenue expectations, consolidation among its competitors and customers, technology advancements, unexpected costs and charges, adequate funding for plans, changes in interest and foreign exchange rates, regulatory and other approvals and failure to implement all plans, for whatever reason. It is not possible to foresee or identify all such factors. Any forward-looking statements in this report are based on current conditions; expected future developments and other factors it believes are appropriate in the circumstances. Prospective investors are cautioned that such statements are not a guarantee of future performance and actual results or developments may differ materially from those projected. The company makes no commitment to update any forward-looking statement included herein, or disclose any facts, events or circumstances that may affect the accuracy of any forward-looking statement.

SOURCE Document Security Systems, Inc.



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