Authentify Posts Record Financial Results in 2005 Fueled by Spike in Online Fraud and Phishing

Vendor of Telephone-Based Authentication Solutions Doubles Revenues
and Increases Customer Deployments by 200 Percent

CHICAGO, Jan. 16, 2006 -- Authentify Inc., the leader in telephone-based authentication solutions, today announced that it posted record sales as market demand for its Out of Band Authentication (OOBA) service exploded in response to the rise in online fraud, phishing attacks and identity theft. The company doubled its sales year-over-year, increased customer deployments by 200 percent, and processed more than 10 million identity verification transactions in 2005. Authentify customers include ABN AMRO, Amazon.com, eBay, Catholic Charities, VeriSign, GeoTrust, HP, and several major online payments firms. In a recent report, Gartner, Inc. states, “The recent Federal Financial Institutions Examination Council (FFIEC) guidance for U.S. banks on risk-based authentication (see "Regulators Tell U.S. Banks to Adopt Stronger Risk-Based Authentication") — and the guidance's indirect market influence on other U.S. sectors — will further the business case to use a form of two-factor strong authentication.” ⁱ

2005 Highlights
In 2005 Authentify achieved the following milestones:
• Doubled sales year-over-year
• Increased customer deployments by 200 percent
• Selected as a finalist in the SC Magazine 2006 Product of the Year Awards
• Introduced FraudChaser, an anti fraud product for e-commerce clients
• Announced strategic partnerships with:
- Cyota, now RSA Security (Nasdaq: RSAS)
- TriCipher
- Entrust

“The number of high profile database breaches in which sensitive personal information was lost plus the increased sophistication of phishing, and pharming attacks in 2005 made it clear that the criminal element is organized and dedicated to exploiting the anonymity of the Internet to commit fraud,” said Peter Tapling, president and CEO of Authentify. “Internet fraud has been on the rise for a number of years, but in 2005 it was higher profile. Businesses and government agencies realized that existing in-band security and authentication practices are vulnerable to someone armed with all the right information. That realization is fueling our growth and puts us in excellent position for 2006 and beyond.”

About the Authentify Service
Authentify uses the most ubiquitous and reliable technology in the world, the telephone network, as an authentication tool for Internet transactions. Authentify has developed a patented process that enables Web sites or other network access points to place a real-time automated telephone call to the person who is attempting to conduct an online transaction. Once the person answers the call, he/she is prompted for information being displayed on their computer screen. This interactive two-factor authentication process ensures that the person on the phone is in control of the web session, and provides a legally recognized audit trail that binds the transaction.

About Authentify, Inc.
Authentify, Inc. is a Chicago, Illinois based ASP providing automated authentication services that enable organizations to quickly and cost-effectively perform real-time user authentication during an Internet session. By leveraging the familiarity of telephone networks, Authentify delivers an effective authentication process that is practical for business and easy for consumers. The company’s patented technology employs a message based architecture to seamlessly integrate into existing online processes developed for e-business, secure information access, or the distribution of security credentials. Visit Authentify at www.authentify.com, or call 773-243-0300.

i Gartner Research “Authentify's Out-of-Band Authentication Gains Traction in Niche Applications” by Avivah Litan. November 30, 2005.

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