Simple Ways You Can Prevent Gift Card Fraud in 2024

In an era where convenience comes hand-in-hand with security risks, businesses and consumers have to be vigilant. One such risk is gift card fraud, and it has become a massive concern for businesses and consumers alike. Digital transactions are on the rise, and cybercriminals are becoming more and more sophisticated. This is why it’s more important than ever to safeguard against fraudulent activities surrounding gift cards.

In this guide, we’ll be diving deep into the landscape of gift card fraud in 2024 and explore how businesses can prevent it.

What is Gift Card Fraud?

Gift card fraud includes various illegal activities that fraudsters conduct by exploiting vulnerabilities in the gift card system. 

These activities can range from simple scams to complex cyberattacks. Each of these activities can pose significant risks to both businesses and consumers. Here’s a list of the most common forms of gift card fraud:

  1. Phishing Scams

Cybercriminals often use phishing emails or text messages to trick unsuspecting customers into divulging their gift card information, such as card numbers and PINs, under the guise of a legitimate request.

  1. Card Skimming

Fraudsters deploy skimming devices at point-of-sale terminals to capture gift card data when customers make purchases. These skimming devices help fraudsters make clones of gift cards and use them for fraudulent activities. 

  1. Account Takeover

Hackers exploit weak authentication measures or stolen credentials to gain unauthorized access to gift card accounts. This way, fraudsters can make unauthorized purchases or transfer funds.

  1. Return Fraud

Fraudsters exploit lenient return policies by purchasing gift cards with stolen credit cards, using them, and then returning the items for cash refunds.

Prevention Methods & Solutions

To mitigate the risks associated with gift card fraud, businesses, and consumers must adopt proactive measures and utilize innovative solutions tailored to their industry and their businesses. Here are several effective prevention methods and solutions for combating gift card fraud in 2024:

1. Enhanced Security Measures

One of the best ways to prevent gift card fraud is by implementing robust security protocols. You need to implement end-to-end encryption and tokenization to safeguard gift card data throughout the transaction process. 

Businesses need to utilize advanced authentication methods, including biometric verification and multi-factor authentication, to prevent unauthorized access to gift card accounts.

2. Educating Consumers

Businesses can prevent gift card fraud by educating consumers about the standard methods fraudsters use. Businesses should also educate customers on how to identify and avoid potential scams. 

Encourage customers to exercise caution when sharing gift card information online and emphasize the importance of keeping personal and financial data confidential.

3. Transaction Monitoring

Another way to prevent gift card fraud is to deploy real-time monitoring systems capable of detecting suspicious activities. Monitoring suspicious activities includes verifying unusual purchasing patterns or multiple failed login attempts and other unusual activities with the gift card.

Implement automated alerts to notify businesses of potential fraudulent behavior, enabling prompt intervention and mitigation.

4. Fraud Detection Algorithms

Businesses that have a considerable amount of technological resources at hand can use advanced fraud detection algorithms. Based on machine learning and artificial intelligence, these algorithms analyze transaction data and identify anomalies indicative of fraudulent activity.

Businesses can continuously refine and update these algorithms based on emerging trends and evolving threat vectors to enhance detection accuracy.

5. Secure Authentication Processes

Businesses must implement secure authentication processes, such as requiring PIN authentication or verifying identity documents.

This is done to prevent unauthorized individuals from redeeming stolen or compromised gift cards. Utilize secure payment gateways and partner with reputable vendors to minimize the risk of fraud during redemption.

6. Regular Security Audits

Conduct regular security audits and penetration testing to identify vulnerabilities in the gift card systems. Finding vulnerabilities in the system helps businesses to build more robust processes. 

Collaborate with cybersecurity experts and industry regulators to ensure compliance with relevant standards and regulations

7. Customer Support & Fraud Reporting

Provide timely and responsive customer support services to assist individuals who suspect fraudulent activity involving their gift cards. Establish clear procedures for reporting suspected fraud and collaborate with law enforcement agencies to investigate and prosecute perpetrators.


Gift card fraud poses a significant threat to businesses and consumers alike. Companies can prevent this fraud by using a multifaceted approach. By implementing enhanced security measures, educating consumers, deploying advanced fraud detection technologies, and fostering collaboration across the industry, businesses can effectively combat gift card fraud in 2024 and beyond.


How to Use Machine Learning in Financial Fraud Detection?

Financial fraud is a pervasive challenge in today’s interconnected and digital world. As technology advances, so do the techniques employed by fraudsters. Traditional methods of fraud detection are often insufficient to keep up with the evolving tactics of malicious actors. This is where machine learning (ML) plays a crucial role, offering a proactive and adaptive approach to identify and mitigate financial fraud.

In this blog post, we will explore how businesses can harness the power of machine learning for more effective and efficient financial fraud detection.

Understanding Financial Fraud

Before delving into the application of machine learning, it’s essential to comprehend the types of financial fraud that organizations face. Common examples include credit card fraud, identity theft, account takeover, and fraudulent transactions.

Traditional rule-based systems typically struggle to keep up with the dynamic nature of these fraudulent activities.

Machine Learning in Financial Fraud Detection

1. Data Pre-processing

Start with collecting and pre-processing data. Clean, relevant, and comprehensive data is crucial for the success of any machine learning model. Utilize historical transaction data, customer profiles, and other relevant information to train your model.

2. Feature Engineering

Extract meaningful features from the data that can help the model distinguish between legitimate and fraudulent transactions. Features may include transaction amount, frequency, location, device information, and user behavior patterns.

3. Supervised Learning Algorithms

Train your machine learning model using supervised learning algorithms. Commonly used algorithms include Decision Trees, Random Forests, Support Vector Machines (SVM), and Neural Networks. Train the model on labeled data, where each transaction is marked as either legitimate or fraudulent.

4. Anomaly Detection

Implement anomaly detection techniques to identify unusual patterns or outliers in the data. Unsupervised learning algorithms, such as clustering or isolation forests, can be effective in detecting deviations from normal behavior.

5. Behavioral Analysis

Leverage machine learning to analyze user behavior and detect deviations from normal patterns. This could include changes in spending habits, transaction times, or the use of unfamiliar devices.

6. Real-time Monitoring

Implement real-time monitoring systems that continuously analyze incoming transactions. Machine learning models can quickly adapt to new fraud patterns and provide instantaneous alerts, enabling swift intervention.

7. Ensemble Methods

Combine multiple machine learning models using ensemble methods to improve overall detection accuracy. Ensemble techniques, like bagging and boosting, can enhance the robustness of the fraud detection system.

8. Continuous Model Updating

Financial fraud tactics evolve over time, so it’s crucial to continuously update and retrain machine learning models. Regularly incorporate new data and adjust the model to stay ahead of emerging threats.

9. Imbalanced Data

Address the challenge of imbalanced datasets by employing techniques such as oversampling the minority class or using synthetic data generation.

10. Explainability

Ensure the interpretability of machine learning models, especially in industries with regulatory requirements. Transparent models can help in explaining the reasoning behind fraud alerts.

11. Integration with Existing Systems

Seamlessly integrate machine learning-based fraud detection systems with existing fraud prevention infrastructure, ensuring a smooth transition and coexistence with legacy systems.


Machine learning offers a powerful arsenal in the fight against financial fraud. By harnessing the capabilities of advanced algorithms, businesses can enhance their fraud detection capabilities, adapt to evolving threats, and safeguard their financial ecosystems.

As the digital landscape continues to evolve, leveraging machine learning for financial fraud detection becomes not just a competitive advantage but a necessity for maintaining trust and security in the financial industry.


Understanding Digital Wallet Fraud

In an era dominated by technology, digital wallets have emerged as a convenient and efficient means of managing finances. With the ability to make seamless transactions, pay bills, and even store identification documents, digital wallets have become an integral part of our daily lives.

However, with great convenience comes great responsibility, as the rise of digital wallet fraud poses a significant threat to users’ financial security.

In this blog post, we will delve into the world of digital wallet fraud, exploring what it is, how it happens, and most importantly, how you can protect yourself from falling victim to such cybercrimes.

Understanding Digital Wallet Fraud

Digital wallet fraud involves unauthorized access or manipulation of a user’s digital wallet to carry out fraudulent transactions or gain sensitive information. 

This can occur through various means, including phishing, malware attacks, and identity theft. Criminals are constantly evolving their tactics, making it crucial for users to stay informed about potential threats and take proactive measures to secure their digital wallets.

Common Types of Digital Wallet Fraud

1. Phishing Attacks

Phishing is a prevalent method used by cybercriminals to trick users into revealing their login credentials or sensitive information. In the context of digital wallets, phishing may involve fraudulent emails, messages, or websites that mimic legitimate platforms to deceive users into providing their wallet details.

2. Malware and Mobile App Attacks

Malicious software or apps can compromise the security of digital wallets. Once installed on a user’s device, malware can capture login credentials, access personal information, or even take control of the digital wallet itself. Users should exercise caution when downloading apps and regularly update their security software to prevent such attacks.

3. Identity Theft

Cybercriminals may engage in identity theft to gain unauthorized access to digital wallets. By obtaining personal information through various means, such as social engineering or data breaches, fraudsters can manipulate security measures and take control of a user’s digital wallet.

4. Account Takeover

In an account takeover, cybercriminals gain access to a user’s digital wallet by obtaining login credentials through various means. This could include using leaked passwords from other online accounts or exploiting weak authentication methods.

How to Prevent Digital Wallet Fraud?

1. Use Strong Authentication

Strengthen your digital wallet security by enabling multi-factor authentication. This adds an extra layer of protection by requiring additional verification steps beyond just a password, such as a one-time code sent to your mobile device.

2. Keep Software Updated

Regularly update your digital wallet app and the operating system of your device. Developers often release updates to patch security vulnerabilities, and staying up-to-date is crucial for safeguarding against potential exploits.

3. Beware of Phishing Attempts

Be cautious of unsolicited emails, messages, or links asking for your digital wallet information. Legitimate service providers will never request sensitive details through email or messaging apps. Verify the authenticity of communication by directly contacting the company through official channels.

4. Secure Your Devices

Use strong, unique passwords for your digital wallet and regularly update them. Additionally, secure your devices with biometric authentication, such as fingerprint or facial recognition, to add an extra layer of protection.

5. Monitor Your Accounts

Regularly review your digital wallet transactions and account activity. If you notice any suspicious or unauthorized transactions, report them immediately to the digital wallet provider and take appropriate action to secure your account.

6. Educate Yourself

Stay informed about the latest trends and techniques used by cybercriminals. Awareness is a powerful tool in preventing digital wallet fraud. Familiarize yourself with common scams and be vigilant to protect your financial assets.


As the digital landscape continues to evolve, so do the threats associated with digital wallet fraud. Users must remain vigilant and proactive in securing their digital wallets to safeguard their financial well-being. By understanding the common types of fraud, implementing robust security measures, and staying informed about potential risks, individuals can enjoy the convenience of digital wallets without compromising their financial security.

Remember, the key to preventing digital wallet fraud lies in a combination of awareness, technology, and responsible digital habits.

Frequently Asked Questions

  1. 1. What is digital wallet fraud?

    Digital wallet fraud involves unauthorized access or manipulation of a user's digital wallet to carry out fraudulent transactions or gain sensitive information. It can occur through various means, including phishing, malware attacks, and identity theft.

  2. 2. How can I protect myself from digital wallet fraud?

    Use strong authentication methods, such as multi-factor authentication.

    Keep your digital wallet app and device software updated regularly.
    Be cautious of phishing attempts and never share sensitive information through unsolicited emails or messages.

    Secure your devices with strong, unique passwords and biometric authentication.

    Monitor your digital wallet transactions regularly and report any suspicious activity promptly.

  3. 3. What is multi-factor authentication, and why is it important?

    Multi-factor authentication (MFA) is a security method that requires users to provide multiple forms of identification before gaining access to their digital wallets. This typically involves something you know (password) and something you have (mobile device for receiving a code). MFA adds an extra layer of protection, making it more difficult for fraudsters to access your account.

  4. 4. How can I recognize phishing attempts related to digital wallets?

    Be wary of unsolicited emails or messages requesting your digital wallet information.

    Verify the legitimacy of communication by contacting the company directly through official channels.

    Check for grammatical errors or inconsistencies in the communication.

    Look for secure website indicators, such as “https://” in the URL, before entering any login credentials.

  5. 5. Can malware compromise my digital wallet?

    Yes, malware can compromise the security of your digital wallet. Malicious software can capture login credentials, access personal information, or take control of your digital wallet. To prevent this, avoid downloading apps from untrusted sources, keep your device's security software updated, and regularly scan for malware.

  6. 6. What should I do if I notice unauthorized transactions in my digital wallet?

    If you observe any suspicious or unauthorized transactions, take the following steps:

    – Immediately report the issue to your digital wallet provider.
    – Change your passwords and update your security settings.
    – Contact your bank or financial institution to report the fraudulent activity.
    – Consider freezing or closing the affected digital wallet account if necessary.


Contactless Payment Scams

Contactless payments through cards are hugely popular within the UK – in fact, they’ve now overtaken chip and pin payments. Contactless payments increased by 30% between June 2017 and June 2018 – and 52% of all shop payments were contactless in July 2018. Overall, there were 7.4bn contactless payments in 2018.

Around 7 in 10 payments in the UK are contactless, and 17% of 25 – 34-year-olds make only one monthly payments using cash – or rely entirely on cards to make payments.

One of the reasons for the increased popularity of using contactless cards is they’re easy and simple to use to pay for a variety of goods. By removing the need for a PIN code, contactless cards do offer a fast and convenient way to pay – however, they may also offer criminals the opportunity to commit fraud.

Below, we look at the facts behind contactless cards, how fraudsters can take advantage and the best ways to avoid becoming a victim of credit card fraud.

How do contactless cards work?

Contactless cards contain both a chip and an antenna that is used to carry out the transaction. When you hold your card on or near a card reader, the retailer’s card reader sends out a signal which is picked up by your card’s antenna. The chip inside your card contains information about your account and by using this information, the card reader can process its payment.

Payments are currently limited to a maximum of £30 (it was previously £20), and are typically used for small retail purchases. There can sometimes be a problem with “card clash” which is when two contactless cards, either payment cards or travel cards like Transport for London’s Oyster Card, both interact with a card reader at the same time.

Contactless payments are also quicker because payments are processed in batches.

How widespread is contactless card fraud?

It may seem like contactless technology allows fraudsters an easy way to access your money without a PIN. Assuming you take precautions to protect your card, the chances of it happening to you are reduced – however, consumers are right to be vigilant as cases of contactless card scams doubled in 2018.

Because contactless payment technology currently limits the value of purchases, the total potential value of fraud involving these cards is reduced. Thieves are always looking for big payouts, which are limited by contactless scams.

However, there’s also been recent research that shows that the £30 maximum spend on contactless cards can be bypassed. Researchers have found that the flaws in the payment system for some contactless cards could potentially allow criminals to steal hundreds of pounds in a single transaction.

The hack the researchers used to “break” the £30 limit uses a device which intercepts the signals between the card and the card reader. It then simultaneously ‘tells’ the card that no verification is needed and the card reader that verification has been provided.

Another purported method that fraudsters use is to actually process payments by standing near someone on a train or in another crowded public place and reading their contactless card through their clothes. However, according to Which? there’s little evidence that this type of fraud is common.

How to avoid and report contactless card fraud?

Contactless card fraud is on the rise; in the first half of 2018, thieves stole more than £8 million from contactless scams.

You can minimise the chances of becoming a victim of contactless fraud by following these steps:

  • Don’t keep your cards in easily accessible pockets or bags which will draw pickpockets’ attention.
  • Line your wallet or cardholder with tin foil to block scamming devices from reading your card. If you don’t fancy the DIY approach, there are products like RFID readers available which do the same thing.
  • Don’t let anyone take your card out of sight while taking a payment – even for just a few seconds. They could be using a skimming device to copy data from your card’s magnetic strip.
  • Don’t give your friends your card to make payments – always make sure you’re there for all transactions.
  • Ask for a receipt to make sure you were charged the correct amount.
  • Keep a close eye on bank statements and your credit report to look for any unusual activity.
  • Report any lost or stolen cards as quickly as possible. There is a limit on how many times you can use a contactless card before requiring a PIN, which stops criminals from carrying out a large volume of small transactions of up to £30 each – however, it’s best to not wait for the card to be blocked.


Data Validation for Retailers

In the fast-paced world of retail, accurate and reliable data is the cornerstone of success. Retailers deal with vast amounts of information, from inventory management to customer details and marketing analytics. Ensuring the integrity of this data is critical for making informed decisions and providing a seamless customer experience. This is where data validation comes into play.

10 Advantages of Data Validation

Let’s explore the 10 key benefits that data validation brings to retailers.

1. Accurate Inventory Management

One of the primary advantages of data validation in retail is accurate inventory management. Validating product quantities, SKUs, and other inventory-related data helps prevent overstock or stockouts. 

This, in turn, optimizes supply chain efficiency and ensures that customers find the products they need when they need them.

2. Improved Customer Experience

Data validation ensures the accuracy of customer information, including contact details and purchase history. This accuracy translates into improved communication and personalized experiences.

When retailers have reliable customer data, they can tailor their interactions, provide relevant recommendations, and build stronger, more lasting relationships with their clientele.

3. Reduced Errors in Orders

Validating order details, addresses, and payment information significantly reduces the likelihood of errors in order processing. 

Ensuring that the right products are shipped to the correct addresses with accurate payment details minimizes returns, customer dissatisfaction, and the associated costs.

4. Effective Marketing Campaigns

Accurate customer demographic and segmentation data is vital for crafting targeted and effective marketing campaigns. Data validation ensures that marketing efforts reach the right audience, increasing the likelihood of engagement and conversion. 

This not only saves marketing costs but also enhances the return on investment (ROI) for promotional activities.

5. Enhanced Decision-Making

Reliable data is the foundation for sound decision-making. Data validation provides assurance that the information used for analysis and strategic planning is accurate. This empowers retailers to make informed decisions based on real insights, contributing to the overall success and growth of the business.

6. Compliance with Regulations

In an era where data protection and privacy regulations are becoming increasingly stringent, data validation is crucial for compliance.

Ensuring that customer data is accurate and up-to-date not only protects the privacy of individuals but also shields retailers from legal and financial consequences associated with regulatory non-compliance.

7. Cost Reduction

Data validation contributes to cost reduction in various ways. By minimizing errors in orders, returns, and customer support inquiries, retailers can cut down on operational expenses. Additionally, accurate data reduces the need for rework and correction, saving both time and money in the long run.

8. Prevention of Fraud

Validating customer information and payment details is a key component in the prevention of fraudulent activities. With accurate data, retailers can identify and flag suspicious transactions, reducing the risk of financial losses and protecting both the business and its customers.

9. Efficient Supply Chain Management

For retailers, a smooth and efficient supply chain is vital. Data validation ensures that supplier data, product specifications, and pricing information are accurate and up-to-date. This contributes to a streamlined supply chain, minimizing disruptions and ensuring the timely availability of products.

10. Improved Data Integration

In a technology-driven retail landscape, seamless data integration is essential. Data validation ensures data consistency and compatibility, making it easier for retailers to integrate their systems and platforms. This leads to improved operational efficiency and a more cohesive and interconnected retail ecosystem.


In conclusion, data validation is not just a technical process; it’s a strategic necessity for retailers. The benefits outlined above collectively contribute to a more efficient, customer-centric, and competitive retail environment. 

By investing in data validation practices, retailers can future-proof their operations and pave the way for sustained success in the dynamic world of retail.


What is Third Party Risk Management?

Third-party risk management (TPRM) is a type of risk management program that focuses on identifying and reducing risks that come with the use of third parties. Third parties that open businesses to risk are vendors, suppliers, partners, contractors, or service providers.

The risk management program aims to give organizations an understanding of the third parties they use. TPR programs are dependent on the type of organizations, the industry they operate in, and several other factors. But, several TPRM practices are universal and applicable to every business.

Third-party risk management often encompasses all the practices that help businesses prevent third-party risks and fraud.

In this guide, we’ll go over what is third-party risk management and common TPRM practices businesses can use.

Importance of Third-Party Risk Management

Third-party risk management has been around for a long time. However, l with recent growth in third-party fraud cases has increased the need for third-party risk management.

Disruptive events have impacted thousands of businesses globally. Moreover, several data breaches have been directly related to poor third-party risk management.

Some of the most common ways businesses can be impacted are:

  • Internal outages and slowing down operational capabilities.
  • External outages affect areas such as the supply chain.
  • Vendor risks that make your business vulnerable to supply chain fraud. 
  • Operational shifts that affect data gathering, storage, and security.

Almost all organizations today use some kind of third-party provider to keep their operations running smoothly. So, when there’s an issue with your third-party suppliers, your business suffers greatly.

Let’s say you’re using a cloud platform such as Amazon Web Services (AWS) to host your website. If AWS goes down for a couple of hours, your operations also go down.

Outsourcing is crucial for the success of modern businesses, it not only saves businesses money, but it also helps in getting help from experts.

Unfortunately, there’s a downside. If proper third-party risk management programs aren’t in place, the use of third parties can leave your business open to several risks.

Best Third-Party Risk Management Practices

Businesses can use several third-party practices that help you build a better program, regardless of where your business currently stands. Here are the 3 best practices that apply to almost every company.

1. Prioritize Your Inventory

Not all vendors are equally important for your business, this is why you need to determine which third-party vendors matter the most. To improve the efficiency of your third-party risk management program, you need to segment your vendors. 

You can segment the vendors into 3 categories:

  • Low risk, low criticality – Tier 3
  • Medium risk, medium criticality – Tier 2
  • High risk, high criticality – Tier 1

Generally, organizations will focus their time and resources on tier 1 vendors first, as they require more stringent due diligence and evidence collection. Tier 1 vendors are subject to the most in-depth assessments, which often include on-site assessments.

A lot of times, during the initial evaluation, these tiers are calculated based on the inherent risk of a third party. Inherent risk scores are generated based on industry benchmarks. These include:

  • Sharing proprietary or confidential business information with the vendor
  • Sharing personal data with the vendor
  • Serving critical business functions
  • Sharing sensitive personal data with the vendor
  • Sharing personal data across borders

The impact of a vendor can also be a determining factor. Let’s say a third-party vendor is unable to deliver their service, how much impact will that have on your business? When there is significant disruption in your operations, the vendor will also be higher. Businesses can figure out the impact by considering these factors:

  • The impact of unauthorized disclosure of information
  • Impact of unauthorized modification or destruction of information
  • Impact of disruption of access to the vendor/information

Another way to determine the impact of a vendor’s inability to deliver their work is by grouping based on contract value. Vendors that have huge budgets may automatically be segmented as tier-1.

2. Leverage Automation Whenever Possible

Efficiencies only happen when operations are consistent and repeatable. There are several areas in the third-party risk management process where businesses need automation. Some areas where businesses can use automation include:

  • Intaking and onboarding new vendors

Businesses can add vendors to their inventory by using an intake form or via integration with contract management or other systems.

Solutions like DIRO online document verification can help businesses in verifying vendor identity during onboarding. This helps in reducing vendor risk significantly.

  • Calculating inherent risk and tiering vendors

During the vendor onboarding process, businesses need to collect vendor information that helps in calculating the level of risk the vendor poses for the business.

Based on the level of risk, businesses can set up different levels of due diligence for vendors. This helps prevent fraud that comes with poor third-party risk management.

  • Assigning risk owners and mitigation tasks

Whenever a vendor is flagged, route the risk to the correct individual and include a checklist of mitigation action items. 

  • Triggering vendor performance reviews

You need to set up automation tiggers that conduct reviews of vendors during specific times of the year. The reviews could be each quarter, every 6 months, or once a month.

  • Triggering vendor reassessment

Businesses should send an assessment based on contract expiration dates. Businesses should also save last year’s assessment answers so vendors don’t have to start completely from scratch.

  • Scheduling and running reports

Businesses should set up automated reports that run every day, every week, or every month. These reports must be shared with the right person.

Every third-party risk management program is unique, so as a business, you need to start by looking internally at the small processes that can be automated.

3. Think beyond cybersecurity risks

Whenever businesses think of third-party risk management or vendor risk management programs, they think of cybersecurity risks. But, third-party vendor management is far more than cybersecurity risks.

While it is important to focus on small things and consider cybersecurity risks, there are other types of risks that businesses should prioritize, such as:

  • Reputational risks
  • Geographical risks
  • Geopolitical risks
  • Strategic risks
  • Financial risks
  • Operational risks
  • Privacy risks
  • Compliance risks
  • Ethical risks
  • Business continuity risks
  • Performance risks
  • 4th party risks
  • Credit risks
  • Environmental risks

How Can DIRO Help?

DIRO online document verification solution can help businesses strengthen their third-party risk management practices. Third-party fraud risks start from the moment a business onboards a vendor without proper verification.

DIRO online document verification solution helps businesses verify crucial vendor information that can help in fraud prevention in the long run. DIRO can verify these documents:

  • Proof of address
  • Bank statements
  • Vendor documents
  • Incorporation documents and more.

Learn more about how DIRO can enhance your third-party risk management program by requesting a demo today.


Hyper-Personalization for Fraud Prevention

Hyper personalization is a game changer for businesses looking to improve customer lifecycle and fraud management. 7 out of 10 consumers expect a personalized experience from businesses. But, the current personalization methods are full of gaps.

Businesses that use digital marketing to acquire and serve customers are the ones moving towards hyper-personalization. Hyper-personalization is a supercharged version of personalization that uses real-time customer data, AI, automation & predictive behavior analysis. The results are different for companies that use real-time personalized customer experiences.

Several banks, financial institutions, and other finance businesses are also looking to step up their personalization program. 

If done right, hyper-personalization is the key to fraud management and fraud prevention. Hyper-personalization has the power to transform the consumer’s experience of fraud controls. As it uses a data-centric approach, banks, and other businesses will be able to implement strong fraud controls across the customer journey.

This is essential as fraudsters have become a part of every single customer-business touchpoint. There are thousands of ‘moments’ in a customer journey where a decision will be able to figure out whether a fraud, a scam, or a legitimate activity is taking place.

Using Data To Take Right Decisions

Whenever businesses come across an event that can be fraud, several decisions can be made to determine whether the activity is legitimate or fraudulent. The series of decisions can be:

  • Is it a new device?
  • Is an OTP needed?
  • Is there a risk of a SIM swap?
  • Is a biometric check needed?
  • Is the customer moving money using a unique channel?

To find answers about these decisions, there are multiple datasets about the customer, their accounts, their email, their mobile, their biometrics, etc. To deliver a hyper-personalized experience, the right data and insight must be delivered to the right decision, at the right time to enhance the customer experience.

Current fraud prevention methods tend to focus only on the negative indicators from the database and these negative indicators point towards a potential fraud or scam event.

Getting Rid of Functional Silos

For businesses to achieve hyper-personalization, the context needs to be available across all points through the customer journey. Fraud solutions with banks and financial services are too often deployed in isolation from other touch points in the customer journey. While the fraud prevention journey should be a part of the entire customer journey, the current methods are separate.

The decisions that need to be made and the treatment paths that are taken should be interlinked and consistent throughout the customer journey.

This will better inform the next best decision, whether it is about declining or holding payment, and how they communicate with the customers often.

Make Your Customer a Part of the Fraud Department

Customers play the biggest role in the fraud prevention process. Having clear & consistent communication is a crucial element for this hyper-personalization to work. 

With the rise of communication channels, more and more customers have received a communication that they believe was a scam. Traditional strategies such as post-transaction verification checks delivered via message is delivered through SMS are usually ineffective.

During a scam, the person initiating the transaction is a legit customer, and a simple “Is this you?” can only met with an affirmation. There’s no option to highlight if the legit user is under the control of a fraudster who may be telling them to ignore such messages.

Every bank and financial institution should have ‘moments’ of intervention where a customer has the opportunity to change a customer’s course of action. The channel, clear messaging, and the timing of the intervention have to be right. 

According to data, customers respond better to a series of timely conversational messages that are clear and relevant, instead of a single ‘Yes or No’ text. 

By delivering the right message at the right time, through the right channel, hyper-personalization will help organizations get rid of noise and deliver customers exactly what they need.


5 Types of Subscription Fraud

Subscription fraud is one of the least common types of fraud faced by communications service providers. Even if the problem is small, it has a huge impact. The problem has grown by nearly 6% from $1.92B to $2.03 billion.

In this guide, we’ll outline the 5 most common types of subscription fraud that communications businesses face.

What is Subscription Fraud?

Subscription fraud can be a symptom of a gateway to other frauds. For example, fraudsters can create a synthetic identity to create a fraudulent subscription. This also helps fraudsters build a fake identity associated with a phone number.

These identities are then used to defraud banks, financial institutions, and other entities.

Apart from this, subscription fraud also continues in traditional ways, such as people who subscribe but don’t intend to pay. Or a type of fraud that seeks to acquire incentivized devices falsely just to sell them online.

Types of Subscription Fraud That Communications Businesses Face

1. Fraud Shown as Bad Debt

There is a type of fraud where fraudsters show themselves as bad debtors. More than 40% of the experts CFCA surveyed say less than 10% of the bad debt is actually due to fraud.

However, whether the Communications service providers have a way to differentiate between bad debts from scams may challenge this statistic. 

If a fraud is categorized as bad debt, it won’t be investigated or stopped. This means scammers can return over and over again to different service providers with different types of frauds with little concern of being caught.

2. Fraudsters Hide Among False Positives

Fraudsters take advantage of the fact that CSPs don’t share fraud data among themselves. While the financial industry has started sharing liability data to prevent a single fraudster from tricking the system again and again, CSPs are yet to do that.

No company wants to share insider information with its competitors, but to prevent fraud, collaboration is essential.

While Communication Service Providers have managed to reduce the number of false positives, others are struggling. According to reports, fraud management systems tend to detect fraud with an average false positive rate of either 13% or 88%.

26% of the fraud management systems spend an average of 20 hours per week on researching false positives. What makes things even worse is that around 52% report using no third-party data to help gain insights required to differentiate between real fraud from false positives.

3. IoT Based Subscription Scams

The risk of fraud in the Internet of Things (IoT) is clear from CFCA’s survey. Only 41% of service providers are actively checking for fraudulent activity in IoT data. The survey reveals that Distributed Denial of Service (DDoS) attacks, misuse of unlimited data services, and SIM swaps are the most common methods used for IoT-related fraud. This indicates that criminals have a relatively easy time exploiting the growing IoT landscape, as it lacks adequate defenses. This vulnerability can lead to serious crimes, such as using SIM swaps to gain control of personal bank accounts.

4. Back-Office Inefficiency-Based Subscription Fraud

Inefficiencies in the back-office and the use of isolated systems are causing an increase in fraud losses. Various departments, such as sales and marketing, credit risk, fraud, and collections, often operate on separate systems. 

Although each department collects valuable information, they rarely share this data. This presents two problems for fraud teams: they may make poorly informed fraud decisions, and they might create inconvenience for customers by requesting information that another department in the organization already has.

Fraud teams are also taking on broader responsibilities. According to CFCA, 39% of fraud teams now handle customer service tasks, and 20% are involved in sales and marketing. This expanded role for fraud managers becomes challenging when they have limited access to information due to siloed systems.

This issue is exacerbated when different departments have conflicting goals, as is often the case for sales and fraud management. Salespeople are motivated to close deals, while fraud departments aim to prevent fraudsters from exploiting the sales process and marketing incentives to steal subscriptions and devices. 

Since it’s impractical to turn salespeople into fraud experts, it’s crucial to implement built-in real-time fraud controls in the sales process to maintain a balance between maximizing sales and minimizing fraud.

5. Streaming-Focused Subscription Fraud

For many years, Communication Service Providers (CSPs) worldwide have been striving to offer a variety of services, moving beyond traditional communications to focus on broadband and content. However, the landscape of content consumption has evolved, with streaming becoming the preferred method for accessing video content.

Major streaming services, with Netflix being a prominent example, have often turned a blind eye to customers sharing passwords with non-subscribers. This leniency was understandable during the phase of acquiring customers and building brand awareness. However, as these markets mature and approach saturation, the focus shifts to revenue assurance, highlighting the issue of subscription fraud.

While being lax about password sharing may have made sense in the early stages, it can now pose a barrier to revenue growth. This shift in attitude toward password sharing can have negative repercussions on stock prices and valuations, especially when streaming services fall short of their subscriber addition targets.


Common Bank Account Data Errors and Solution

Bank account errors can be costly for both the institute and the customers. Financial institutions, banks, and other businesses must ensure that all accounts and reference numbers are formatted correctly before any payments happen.

Bank account errors happen when there are any issues with this information. Sometimes they happen because financial institutes and banks fail to comply with compliance standards. The most common one is the BACS requirement, to ensure the bank account details exist and are associated with the payee.

To make sure payments happen without any errors, there have to be no mistakes in the input data. Even the smallest error in a bank account number can lead to payment failures, wrong transactions, and more.

Fortunately, banks, financial institutions, and businesses can significantly reduce the amount of banking errors with a series of checks.

In this blog, we’ll be going over the root causes of transaction errors, and how businesses can take the first steps toward reducing them.

What Are Bank Account Errors and What Causes Them?

Businesses that want to minimize bank account errors need to understand what type of errors are mostly impacting payments, and how commonly they happen.

Here are the most common bank account errors, this allows businesses to investigate the root causes of failed transactions.

Businesses that want to minimize bank account errors need to understand what type of errors are mostly impacting payments, and how commonly they happen.

Here are the most common bank account errors, this allows businesses to investigate the root causes of failed transactions.

1. Account number & sort code errors

Errors such as invalid bank account numbers or sort codes typically happen when customers mis-enter data into payment systems or company forms. This also happens when customer reps mis-hear or mis-key account information.

One of the most common reasons for this type of error code is if data is being migrated or copied between systems, especially if teams have to manually enter information.

These kinds of mistakes have serious consequences, ranging from failed transactions to misdirection of funds. Both of which lead to financial losses for both the consumers and organizations.

2. Reference number errors

There are some cases where the bank account number and sort code are correct, but the reference number (supplier number or invoice number) is wrong. In these cases, payments may be suspended pending investigation by the payment provider.

As an additional challenge, the failed transaction may not be marked to the person or organization making the payment. On the other end of the failed transaction, the recipient will not receive the funds.

3. Changes that Result in Invalid Bank Codes

The financial industry is prone to changing regulations. Sudden changes such as bank mergers, acquisitions, or restructuring can result in changes to the bank’s routing numbers.

When these changes happen, customers need to make sure that the latest details are used for all payments and transactions. The direct debits and other automated payments and deposits and other information are updated with their new details.

This is essential in ensuring that transactions can be verified correctly and there’s a low risk of failed transactions and misdirected funds.

How do Bank Account Errors Impact Businesses?

Common bank errors can have serious consequences for both businesses and consumers.

As bank errors that result in failed transactions require additional investigations are also time and costly. Moreover, these kinds of incidents lead to poor customer experience and poor brand reputation. A lot of businesses have also found out that failed transactions are directly related to a high rate of customer churn.

For consumers, failed transactions and misdirected funds can also be super frustrating. Customers are left waiting for funds for a long time, the consequences can be even more severe, preventing the use of the funds for essential items and bills.

How are Bank Errors Usually Handled?

Every organization across the globe handles bank account errors differently. In the US, for example, invalid accounts with no corresponding account lead to a transaction being rejected instantly.

In Europe, payment providers try to resolve the transaction, generally without informing the payee. This can help fix the problem in the short term, but it can result in serious consequences if funds are misdirected.

These mistakes can come to light over time, causing long-standing resolution challenges and major inconvenience for consumers.

How Bank Accounts Minimize Bank Account Errors?

There are different ways to minimize bank account errors. Let’s go over them one by one:

  1. Ensure Bank Accounts are Genuine

First, banks need to use automated checks to verify bank accounts are genuine and exist or not. This immediately reduces the risk of failed payments due to mis-typing bank account information, either by consumers themselves or by customer support teams.

  1. Make Sure All Bank Account Information is Formatted Correctly

The formatting of bank account details needs to be checked consistently and appropriately to ensure that information is correct. The information should be presented in a way that payment systems can recognize.

This check also helps in getting rid of account errors before they result in failed transactions or misdirected funds.


Introductory Guide to Phishing Emails – Common Techniques and Prevention Methods

Phishing scams are becoming more and more common. Every day hundreds of people around the globe face many problems with phishing emails. Understanding how phishing emails work can go a long way in helping you prevent phishing attacks. 

In 2014, Sony Picture Entertainment became the victim of a major phishing attack. During that time, hackers sent phishing emails to top executives of Sony Pictures, the emails that looked like they appeared from Apple, contained a malicious link that prompted users to enter their Apple ID information into an online form. 

Over time, criminals stole over 100 terabytes of sensitive information. The overall attack cost Sony more than $100 million. 

Phishing scams gained traction in 2021, over 83% of all organizations experienced similar attacks. 

In this guide to anti-phishing, we’ll take an in-depth look at what phishing is, how it works, and the different techniques used for phishing scams.

What is Phishing?

Phishing is a type of social engineering. It happens mostly in emails. In phishing emails, the primary objective of scammers is to trick legitimate users into revealing confidential about themselves or their organizations.

In a phishing scam, attackers may trick victims into clicking a link that will lead them to a fake website. The website will ask you to enter sensitive information. Other types of scams involve directing victims to download attachments that will infect their devices with dangerous malware or ransomware.

Any domain can become the victim of a phishing attack. This is because a huge number of people use the same username and password on multiple accounts. 

According to Google’s 2019 security survey, 65% of people reuse passwords for multiple accounts. Over 60% of people keep using the same password even after a data breach.

Most phishing attacks happen with fake email messages that pretend to come from a legitimate company. Attackers also use text messages, social media platforms, or phone calls to achieve the same goal of accessing sensitive information.

How Does Phishing Attacks Work?

Based on the FBI’s 2020 Internet Crime Report, phishing was the most common cyberattack type in 2020. By 2021, it had become one of the biggest concerns for IT professionals.

Modern phishing attacks have become highly sophisticated. You may have heard of the Nigerian prince scams, it’s one of the oldest phishing scams. The scams of today use several skillful social engineering tactics to manipulate victims and steal personal information.

The best scammers impersonate legit organizations, make lookalikes of their email addresses, and send emails to look like they’re from the real organization. 

The fake emails often contain a malicious link to track the activity of the victim and to steal the user’s personal information. 

The links can also lead to malicious websites that can infect the victim’s device and track all user activity.

Commonly Used Phishing Techniques

Here are some of the most commonly used phishing techniques that are commonly used by scammers.

  1. Bait Creation

Scammers create messages, and emails that look and feel legitimate and trustworthy. They often mimic well-known companies, government agencies, or businesses to trick recipients into thinking that the text is genuine.

  1. Social Engineering

Phishers use psychological techniques to manipulate the recipient’s emotions and push them to take action.

They may also create a sense of urgency, curiosity, fear, or excitement. This surge of emotion is what compels recipients to take immediate action without thinking.

  1. Deceptive Content

Phishing emails contain links or attachments that when clicked and opened can lead to malicious websites or infect the devices of victims. On first look, these links and attachments look real, but they’re designed to steal login credentials and personal information.

  1. Fake Websites

Scammers make up fake websites that look like the real websites of big brands. For example, a user receives an email from about a discount offer with a link to the product. Once the user clicks on the link, they’re redirected to, when they should be led to This is a common scam that happens to thousands of users every year.

Once the victim places the order and enters their banking information, all the information is stolen and the money is lost forever.

  1. Credential Theft

Fake websites prompt victims to enter the usernames and passwords of specific accounts. Once this information is added, the scammer steals the information and uses it to conduct scams.

Types of Phishing Attacks

The most common types of phishing techniques include:

  1. Standard Email Phishing

The scammer shares several fake emails asking the receiver to share personal information or login credentials. These attacks are aimed at large organizations as most employees have limited phishing awareness.

  1. Spear Phishing

This particular attack targets specific individuals. Attackers assume the identity of a real organization. The attacker then sends personalized emails to the target. As the text often includes specific details about the victim, it appears authentic. Over time, the victim trusts the email sender.

  1. Whaling

A whaling attack targets ‘big names’ such as high-level executives. It involves sophisticated social engineering methods to trick the victims into transferring large amounts of money into the attacker’s bank account. 

  1. Business Email Compromise (BEC)

The attackers send fraudulent emails by building a lookalike email of the account owner’s email address to attempt and steal money from the company.

  1. Malware Attacks

In a malware attack, the attacker tricks the victim into downloading an attachment or files that contain malware. As soon as a user downloads and opens the attachment, it installs malware on the device.

How to Mitigate Phishing Scams?

Businesses can protect their people and information assets from phishing attacks by simply following these simple practices:

  • Implement email security software to protect devices from malicious domains. Also, use anti-virus software to scan all emails and attachments.
  • Use training and phishing simulations to teach your employees common phishing techniques and how they work. 
  • Make sure that you always use strong passwords and multi-factor authentication to secure accounts and devices.
  • Discourage users from sharing or reusing the same passwords to minimize the possibility of credential theft.
  • Ask users to use a password manager to generate and store their passwords. 
  • Prevent users from opening emails and attachments from unknown and suspicious senders.
  • Educate users on the common “red flags” that are a sign of a phishing attempt.