Enhance Data Collection Practices to Combat Gift Card Fraud by FTC
In a bid to combat the growing issue of gift card fraud, the Federal Trade Commission (FTC) has outlined a series of strategies aimed at improving data collection and collaboration. These strategies focus on partnerships with retailers, gift card issuers, resale markets, and consumer awareness.
**1. Strategies for Collaboration**
The FTC is proposing several collaborative approaches to gather more comprehensive data on gift card fraud. These strategies involve establishing data sharing partnerships with retailers and gift card issuers, encouraging the integration of fraud reporting mechanisms within their sales platforms, and conducting regular workshops to share insights about emerging fraud trends and preventive measures.
In addition, the FTC is advocating for collaboration with gift card resale markets. This includes monitoring secondary markets for suspicious activities and working with resale platforms to implement mandatory reporting of gift card origins and transaction details.
**2. Gathering Data on Gift Card Types and Consumer Awareness**
To better understand the nature of gift card fraud, the FTC is enhancing the Consumer Sentinel Network (CSN) complaint intake forms to capture specific details about the gift card type involved and the nature of the fraud. The FTC is also incorporating brief surveys to assess consumers’ awareness of gift card fraud risks at the point they report a complaint.
The FTC is also planning to leverage multi-source data collection, combining CSN data with information from federal, state, and private entities like the Better Business Bureau and consumer finance agencies. Furthermore, the FTC aims to use technology analytics and machine learning on complaint text data and transaction records to classify gift card fraud types and consumer experiences more accurately.
These strategies will help the FTC’s Consumer Sentinel Network to collect richer, more actionable data on gift card fraud, enabling better detection, prevention, and consumer education efforts. By understanding the true cost to consumers, the methods favoured by fraudsters, and the success of different mitigation tactics, law enforcement and industry can address the problem more effectively.
While the FTC's report did not reveal the full impact of fraud, the methods favoured by fraudsters, or how victims became aware of the scam, regardless of monetary loss, improved data collection could help policymakers, retailers, gift card issuers, and law enforcement agencies understand and respond to gift card fraud more effectively.
References: [1] Federal Trade Commission. (n.d.). Consumer Sentinel Network Data Book 2022. Retrieved from https://www.ftc.gov/system/files/documents/reports/consumer-sentinel-network-data-book-2022/consumer-sentinel-network-data-book-2022.pdf [3] Federal Trade Commission. (n.d.). Fraud, Identity Theft, & Impostor Scams. Retrieved from https://www.consumer.ftc.gov/topics/fraud-identity-theft-and-imposter-scams [4] Federal Trade Commission. (n.d.). Gift Cards. Retrieved from https://www.consumer.ftc.gov/articles/0252-gift-cards [5] Federal Trade Commission. (n.d.). Scams and Rip-offs. Retrieved from https://www.consumer.ftc.gov/topics/scams-and-rip-offs
- The FTC is proposing to use AI technology to analyze complaint text data and transaction records, aiming to classify gift card fraud types and consumer experiences more accurately.
- In the domain of gift card fraud research, the FTC is incorporating machine learning to extract valuable insights for policy development and business improvements.
- By collaborating with various technology companies, the FTC intends to develop innovative solutions to improve data collection and combat gift card fraud effectively.
- The FTC's efforts to enhance gift card fraud data collection and collaboration contribute to progress in business, finance, and policy sectors related to consumer protection.
