DirectPayNet

Category: DATA PROTECTION

  • Tracking Pixels, Data Protection, and a Practical Guide for Compliance

    Tracking Pixels, Data Protection, and a Practical Guide for Compliance

    Tracking pixels are ubiquitous across every industry. So is consumer data protection. If you’re plugging and playing pixels across your products, how are you sure they’re legally compliant?

    Maybe you use them for marketing, analytics, or to understand your customers better. But as privacy laws tighten and lawsuits pile up, tracking pixels can quickly go from a helpful tool to a legal headache if you’re not careful.

    Let’s break down what tracking pixels are, why they matter for compliance, and how you can use them without risking big fines or losing customer trust.

    KEEP CREDIT CARD DATA PROTECTED

    What Are Tracking Pixels?

    A tracking pixel is a tiny, invisible image (usually 1×1 pixel) embedded in your website or emails. When someone visits your site or opens your email, the pixel loads and sends information back to a server. This info can include:

    • What browser and device the user is on
    • Their IP address and rough location
    • What pages they visit and for how long
    • What links they click
    • Whether they open your emails and interact with them

    Marketers use pixels for retargeting ads, measuring conversions, and optimizing campaigns. If you’ve ever seen an ad for a product you just looked at, that’s probably a tracking pixel at work.

    CONVERT MORE LEADS

    Why Data Protection Matters

    Tracking pixels collect a lot of data, and some of it can be personal or even sensitive. Laws like the General Data Protection Regulation (GDPR) in Europe and the California Consumer Privacy Act (CCPA) in the US set strict rules for collecting, storing, and sharing this kind of data.

    If you don’t follow these rules, you could face lawsuits, regulatory investigations, and hefty fines—sometimes millions of dollars.

    Recent court cases have made it clear: using tracking pixels without proper consent or safeguards can count as unauthorized disclosure of personal information, even if there’s no traditional data breach. Regulators and consumers are watching closely, especially in high-risk sectors like health, finance, and adult services.

    PREVENT DATA BREACHES WITH TOKENIZATION

    The Legal Need-to-Know

    Here’s a handy list of the general laws surrounding data protection in the US and Europe.

    • GDPR (EU): Requires explicit consent before tracking users, transparency about what’s collected, and strong security for any personal data.
    • CCPA/CPRA (California): Gives users the right to opt out of tracking, requires clear disclosures, and allows lawsuits for unauthorized sharing—even without a data breach.
    • HIPAA (US Health Sector): Using pixels on health-related websites can violate patient privacy rules, leading to big fines and regulatory action.

    Other states and countries have their own rules, and more are coming online every year. If you serve customers in multiple regions, you must comply with all applicable laws.

    ARE YOUR EMAIL CAMPAIGNS COMPLIANT?

    Common Risks with Tracking Pixels

    Tracking pixels are powerful tools for marketing and analytics, but they also introduce several risks. Understanding these risks helps you avoid legal trouble and protect your customers.

    Collecting Sensitive Data Without Consent

    One of the biggest risks is accidentally collecting sensitive information through tracking pixels. Sensitive data can include email addresses, phone numbers, health information, or financial details.

    If your pixels are embedded on pages where users enter or view this information, it might be sent to third-party platforms without the user’s knowledge or consent. This can violate privacy laws and expose you to significant fines or lawsuits.

    To prevent this, carefully review every page where tracking pixels are placed. Make sure sensitive data is never shared with third parties unless you have explicit consent and strong safeguards in place.

    Failing to Obtain Proper Consent

    Many businesses make the mistake of tracking users before they have given clear, informed consent. Some rely on pre-checked boxes, vague language, or hidden opt-outs, but these practices do not meet legal standards under regulations like GDPR or CCPA.

    Users must be able to freely choose whether they want to be tracked.

    Always use a clear, prominent consent banner that explains what data will be collected and why. Never activate tracking pixels until the user has given their explicit permission.

    Poor Data Security Practices

    Tracking pixels often send data to external servers, which can be intercepted or misused if not properly secured. If your business does not use encryption or other security measures, personal data collected by pixels could be exposed to hackers or unauthorized parties.

    To protect your users, always encrypt data sent through tracking pixels and ensure that any third-party platforms you work with have strong security standards. Regularly audit your security practices and update them as needed.

    Lack of Transparency

    Another common risk is failing to be transparent about how you use tracking pixels. If your privacy policy does not clearly explain what data is collected, how it is used, and who it is shared with, you could be in violation of privacy laws.

    Keep your privacy policy up to date and easy to understand. Clearly disclose all tracking practices and update your disclosures whenever you make changes to your tracking setup.

    Uncontrolled Third-Party Data Sharing

    When you use tracking pixels, you often share data with third-party platforms like ad networks or analytics providers. If you do not have strict contracts or agreements in place with these providers, they may misuse or mishandle your users’ data.

    Always require third-party vendors to comply with privacy laws and protect user data. Review your contracts regularly and make sure they include clear data protection obligations.

    PROTECT YOUR CUSTOMER DATA NOW

    How to Stay Compliant: A Step-by-Step Guide

    Pixels are a valuable tool for any business looking to scale. Let’s break down exactly what it takes to stay compliant so you can scale securely.

    1. Get Clear, Explicit Consent

    • Use a cookie or tracking consent banner that pops up before any pixels fire.
    • Let users accept, reject, or customize what gets tracked—no “all or nothing” tricks.
    • Never use pre-checked boxes. Only track after users say “yes.”
    • Keep a record of each user’s consent in case regulators ask for proof.

    2. Be Transparent

    • Update your privacy policy to explain what pixels you use, what data they collect, and why.
    • Tell users if data goes to third parties like Meta, Google, or TikTok.
    • If you change your tracking practices, update your disclosures right away.

    3. Limit What You Collect (Data Minimization)

    • Only collect what you really need for your marketing or analytics goals.
    • Avoid tracking sensitive info (like health data, emails, or phone numbers) unless absolutely necessary and you have strong safeguards.
    • Use server-side tracking to control what data is shared with ad platforms.

    4. Anonymize and Secure Data

    • Use techniques like IP anonymization or hashing to reduce the risk of identifying users.
    • Encrypt any personal data sent via pixels.
    • Store pixel data securely, with firewalls and access controls.

    5. Regularly Audit Your Pixels

    • Review all tracking pixels and scripts on your site at least quarterly.
    • Remove any that are no longer needed or don’t have a clear business purpose.
    • Check that all third-party vendors comply with your data protection standards.

    6. Give Users Control

    • Make it easy for users to change their consent settings or opt out at any time.
    • Honor “Do Not Track” or similar browser signals where required by law.

    7. Prepare for Data Breaches

    • Have a plan for responding to data breaches involving pixel data.
    • Under GDPR, you must report breaches within 72 hours—or face even bigger penalties.
    • Train your team on what to do if something goes wrong.

    8. Special Rules for High-Risk Industries

    • If you handle health, financial, or other sensitive data, check for extra regulations like HIPAA or PCI DSS.
    • Don’t use tracking pixels on pages where users enter or view sensitive info unless you’re absolutely sure it’s allowed and secure.

    CONNECT WITH A PCI-COMPLIANT GATEWAY

    Tools and Best Practices

    • Consent Management Platforms (CMPs): Automate consent collection and record-keeping.
    • Privacy-Enhancing Technologies: Use pseudonymization, encryption, and server-side controls to protect data.
    • Vendor Contracts: Make sure your agreements with ad platforms and analytics providers require them to follow privacy laws and protect your users’ data.
    • Comprehensive Scans: Use tools to regularly scan your site for undisclosed pixels and trackers.

    By following these steps, you can harness the benefits of tracking pixels without falling foul of privacy laws or losing your customers’ trust. Staying compliant isn’t just about avoiding fines—it’s about building a business that people feel safe interacting with online.

    Want to make sure your pixel setup is bulletproof? Get in touch with the DirectPayNet team or talk to a privacy expert today. Your future self—and your customers—will thank you.

    BUILD A COMPLIANT, SCALABLE BUSINESS

  • Meeting Consumer Demand for Better Credit Card Fraud Protection

    Meeting Consumer Demand for Better Credit Card Fraud Protection

    Consumers are demanding better protection for their personal data, and can you blame them?

    With AI scraping every piece of data updated to the internet and credit card fraud always on the horizon, what can we do? Fret not, because there are ways to protect your customer data without breaking the bank.

    Identity fraud cases have intensified by around 12% annually since 2020. As we navigate through 2025, the global cost of cybercrime will reach $10.5 trillion annually.

    That’s not to mention online identity fraud now representing more than 70% of all identity fraud occurrences. Our rapidly evolving digital lifestyles are convenient, but challenging.

    Consumers are increasingly aware of these risks, with 87% willing to pay more for products and services from companies that have a strong reputation for security.

    GET BETTER FRAUD PROTECTION AT CHECKOUT

    Which payment methods carry the lowest risk?

    That’s the question on every business owner’s mind. The truth is, they’re all risk except for cash. But that doesn’t mean other, more accessible, payment methods have to be high-risk.

    So, what exactly makes a payment method “low-risk”? Let’s dive in and explore some options that won’t keep you up at night.

    Cash and Checks: Old School, But Still Cool

    Remember the days when cash was king? While it might seem outdated, cash transactions remain one of the safest bets for in-person purchases.

    No digital footprint means no data to steal. Checks, while not as trendy, offer a paper trail that can be easier to track than digital transactions. But let’s face it, carrying wads of cash or a checkbook isn’t exactly convenient today.

    Debit Cards: Your Money, Your Rules

    Debit cards offer a sweet spot between cash and credit. They use funds directly from your account, which means you’re not spending money you don’t have.

    This inherently lowers the risk for merchants and can make you feel more in control of your spending. But don’t get too comfortable – card skimming is still a thing, so keep your eyes peeled.

    Low-Risk Payment Gateways

    For those who can’t resist the allure of online shopping (guilty as charged), lowing the risk of fraud at the payment gateways level is our new best friends.

    Services that tokenize and encrypt customer data at checkout are leading the charge in secure online transactions.

    While a gateway, itself can’t be high or low risk, how you use it can. Enabling certain features and requiring certain customer confirmation data will keep fraud at a minimum.

    While these low-risk methods offer a good starting point, they’re just the tip of the iceberg in the world of payment security.

    PROTECT YOUR CUSTOMER DATA

    The Growing Problem of Online Fraud

    Online fraud remains a persistent and growing threat. As we navigate through 2025, the landscape of cybercrime continues to evolve, presenting new challenges for consumers and businesses alike.

    The Rising Tide of Cybercrime

    The financial impact of cybercrime is insane. By the end of this year, the global cost of cybercrime will to reach a mind-boggling $10.5 trillion annually.

    This represents a 15% year-over-year increase, highlighting the rapid acceleration of online criminal activities.

    Types of Online Fraud

    The digital fraudster’s toolkit is diverse and ever-expanding. Some of the most common types of online fraud include:

    1. Identity Theft: Cases have intensified by an estimated 12% annually since 2020, with no signs of slowing down.
    2. Phishing Scams: These deceptive tactics account for a whopping 80% of reported cybercrimes in the technology sector.
    3. Credit Card Fraud: Hackers continue to find new ways to steal credit card details, often using too-good-to-be-true offers as bait.
    4. Online Shopping Fraud: Scammers sell non-existent or inferior products, or use fake transactions to harvest financial information.
    5. Cryptocurrency Scams: The FBI reported that losses from cryptocurrency-related fraud exceeded $5.6 billion in 2023, a 45% increase from the previous year.

    The Shift to Digital Channels

    Online identity fraud now represents more than 70% of all identity fraud occurrences. AI-assisted tools act as a catalyst for fraud as well, leading to a 244% year-over-year increase in digital document forgeries.

    The Human Cost

    Beyond the financial implications, the frequency of these attacks is alarming. In the U.S., an average person experiences an identity theft attempt every 14 seconds. This constant threat erodes consumer trust and can have long-lasting psychological impacts on victims.

    Clearly online fraud is something that will remain present, mature, and change along with ecommerce. Avoiding fraud altogether is unwise as you will never reach 0% fraudulent activity, whether that refers to chargebacks or your approval rating.

    SET UP FRAUD ALERTS NOW

    Advanced Fraud Protection Technologies

    As online fraud continues to escalate, both businesses and consumers are seeking advanced tools to safeguard their transactions.

    The good news? Tech has risen to the challenge, offering innovative solutions that not only protect sensitive data but also enhance the overall user experience.

    Let’s explore some of the most effective fraud protection technologies shaping the future of secure payments.

    1. Tokenization: Protecting Sensitive Data

    Tokenization replaces sensitive payment information, such as credit card numbers, with unique, non-sensitive tokens. These tokens are meaningless to hackers and cannot be reverse-engineered, making them an effective shield against data breaches.

    For example, when a customer makes a payment, the token is used instead of their actual card details, ensuring that even if a breach occurs, no usable data is compromised.

    Tokenization is widely adopted in mobile wallets like Apple Pay and Google Pay for its ability to secure transactions without disrupting the user experience. You can enable network tokenization through your payment processor and gateway.

    2. Biometric Authentication: Who You Are Is Your Password

    Biometric authentication leverages unique physical or behavioral traits—such as fingerprints, facial recognition, or voice patterns—to verify identity.

    Unlike passwords or PINs, biometrics are nearly impossible to replicate, making them a highly secure option for fraud prevention.

    For instance, many smartphones now use fingerprint or facial recognition for payment authorizations. Doing so adds an extra layer of security while keeping the process seamless for users.

    3. Two-Factor Authentication (2FA): A Double Lock on Security

    Two-factor authentication requires users to verify their identity through two separate methods—something they know (like a password) and something they have (like a one-time code sent via SMS or an authenticator app).

    This dual-layer approach significantly reduces the risk of unauthorized access, as hackers would need to compromise both factors to succeed. Many online platforms and payment processors now mandate 2FA as a standard security measure.

    4. Machine Learning and AI: Smarter Fraud Detection

    Artificial intelligence (AI) and machine learning (ML) have revolutionized fraud detection by analyzing vast amounts of transactional data in real time.

    These systems identify patterns and anomalies that might indicate fraudulent behavior, such as unusual spending locations or rapid fund transfers. For example:

    • Anomaly Detection: ML algorithms flag deviations from normal transaction behavior.
    • Risk Scoring: Transactions are assigned risk scores based on factors like location, frequency, and user history.
    • Network Analysis: AI uncovers fraudulent networks by analyzing relationships between accounts or devices.

    These technologies continuously learn and adapt to new fraud tactics, ensuring they stay ahead of evolving threats.

    5. EMV 3-D Secure: Extra Protection for Online Payments

    EMV 3-D Secure is an authentication protocol designed specifically for online transactions.

    It adds an additional verification step during checkout—such as entering a one-time password or confirming via a banking app—to ensure that the cardholder is indeed the one making the purchase. This reduces card-not-present fraud while maintaining a smooth shopping experience.

    6. Real-Time Monitoring Tools

    Advanced fraud detection systems now offer real-time monitoring capabilities that instantly flag suspicious activities.

    For example, AI-powered tools can detect unusual login attempts or high-value transactions in unfamiliar locations and immediately alert users or block the transaction until further verification is completed.

    MITIGATE FRAUD AT CHECKOUT

  • Network Tokenization Lowers Fraud Risk, Boosts Acceptance Rate

    Network Tokenization Lowers Fraud Risk, Boosts Acceptance Rate

    Online businesses face two major challenges: ensuring high payment acceptance rates and minimizing fraud risks. One innovative solution that addresses both issues is network tokenization.

    But what exactly is network tokenization, and how can it benefit your business?

    BOOST YOUR APPROVAL RATING

    What is Network Tokenization?

    Network tokenization is a payment technology that replaces sensitive card information with unique tokens.

    These tokens are stored and processed by major card networks like Visa and Mastercard, ensuring that actual card numbers are never exposed during transactions. This approach not only enhances security but also improves the efficiency of payment processing.

    Why Should Businesses Care?

    For online businesses, maintaining high payment acceptance rates is important for revenue growth. However, declined transactions can occur due to various reasons, such as outdated card information or security checks.

    Network tokenization helps mitigate these issues by ensuring that transactions are processed smoothly and securely. Additionally, by reducing the risk of fraud, businesses can avoid costly chargebacks and maintain a positive reputation with their customers.

    By embracing network tokenization, businesses can streamline their payment processes, boost customer satisfaction, and ultimately drive more sales.

    This technology is especially beneficial in an era where consumers expect seamless and secure payment experiences across all digital platforms. By understanding and leveraging network tokenization, businesses can stay ahead of the curve and build trust with their customers.

    SECURE YOUR CUSTOMER DATA

    How Network Tokenization Works

    Network tokenization is a sophisticated process that involves several key players and steps. Understanding how it works can help you appreciate its benefits and implement it effectively in your business.

    The Tokenization Process

    1. Initial Transaction: When a customer makes a purchase using their credit or debit card, the card information is sent to the payment processor.
    2. Token Generation: The payment processor requests a token from the card network (e.g., Visa or Mastercard). The card network generates a unique token that represents the customer’s card information.
    3. Token Storage: The token is stored securely by the card network and shared with the merchant or payment service provider. The actual card number is never stored by the merchant.
    4. Future Transactions: For subsequent transactions, the merchant uses the stored token instead of the customer’s actual card number. This token is sent to the card network for authorization.
    5. Authorization and Settlement: The card network verifies the token and authorizes the transaction if everything checks out. The transaction is then settled as usual.

    Key Players in Network Tokenization

    • Card Networks: These are the entities that generate and manage the tokens. Major card networks like Visa and Mastercard play a central role in network tokenization.
    • Merchants: Businesses that accept payments and use tokens for transactions. Merchants benefit from improved security and higher acceptance rates.
    • Payment Service Providers (PSPs): These companies facilitate the payment process between merchants and card networks. They often handle the integration and management of network tokens.

    By working together, these players ensure that network tokenization provides a seamless, secure, and efficient payment experience for both businesses and their customers.

    TOKENIZE YOUR CREDIT CARD DATA

    Benefits of Network Tokenization

    Network tokenization offers a range of benefits that can significantly enhance your business’s payment processing capabilities.

    Acceptance Rates

    One of the most significant advantages is the increase in payment acceptance rates. By using tokens, merchants can avoid issues related to outdated card information or security checks that often lead to declined transactions.

    Since tokens are linked to the customer’s account and updated automatically by the card network, merchants can enjoy higher authorization rates, which directly translates to more successful transactions and increased revenue.

    Fraud Risk

    Another benefit of network tokenization is the reduction in fraud risk. By replacing sensitive card information with tokens, businesses significantly lower the risk of data breaches and unauthorized transactions.

    Even if a token is compromised, it cannot be used to access the actual card details, providing an additional layer of security. This not only protects your business from costly chargebacks but also helps maintain customer trust and loyalty.

    Customer Journey

    Network tokenization also improves the customer experience. For businesses offering subscription services or recurring payments, tokens ensure that transactions are processed smoothly without interruptions.

    Customers do not need to update their card information manually, which reduces friction and enhances overall satisfaction.

    Cost

    Moreover, network tokenization can lead to cost savings. By reducing the scope of PCI DSS compliance and potentially lowering interchange fees, businesses can enjoy financial benefits while maintaining high security standards.

    Overall, network tokenization is a powerful tool for online businesses looking to streamline their payment processes, enhance security, and drive customer satisfaction. By leveraging this technology, businesses can stay competitive in a rapidly evolving digital landscape.

    BOOST YOUR BOTTOM LINE WITH NETWORK TOKENS

    Implementing Network Tokenization

    Implementing network tokenization into your business is a straightforward process that requires some planning and collaboration with the right partners. Here’s how you can get started.

    Getting Started

    To begin with, you need to understand your current payment infrastructure and identify areas where network tokenization can add value. Here are some steps to consider:

    • Assess Your Payment System: Evaluate your existing payment processing setup to see where tokens can be integrated.
    • Choose a Payment Service Provider: Select a PSP that supports network tokenization and has experience with your type of business.
    • Integrate Tokenization: Work with your PSP to integrate network tokenization into your payment flow. This typically involves updating your checkout process to use tokens instead of actual card numbers.

    Choosing the Right Partners

    Selecting the right partners is crucial for a successful implementation. Here are some factors to consider when choosing a PSP:

    • Experience with Network Tokenization: Ensure the PSP has a proven track record with network tokenization.
    • Integration Support: Look for a PSP that offers comprehensive integration support, including APIs and developer tools.
    • Security and Compliance: Verify that the PSP adheres to high security standards and can help reduce your PCI DSS scope.
    • Customer Support: Opt for a PSP with reliable customer support to help you navigate any issues that may arise.

    By following these steps and partnering with the right PSP, you can seamlessly integrate network tokenization into your business and start enjoying its benefits. DirectPayNet can set you up with network tokens and help you migrate your customer data from services like Stripe.

    SECURE YOUR RECURRING REVENUE

    Ready to Implement Network Tokens?

    Network tokenization is more than just a payment technology—it’s a game-changer for online businesses. By replacing sensitive card information with secure tokens, businesses can enjoy higher payment acceptance rates, reduce fraud risk, and deliver a seamless customer experience.

    Whether you’re running a subscription service or an e-commerce platform, network tokenization helps you streamline operations, save costs, and build trust with your customers.

    Implementing network tokenization doesn’t have to be complicated. By assessing your payment system, choosing the right partners, and integrating tokens into your workflow, you can unlock its full potential.

    As digital payments continue to evolve, adopting technologies like network tokenization ensures your business stays ahead of the curve while keeping transactions secure and efficient.

    Explore how network tokenization can transform your payment processes today. You’ll be setting your business up for greater success in a competitive online marketplace.

    START THE JOURNEY

  • Businesses Expose 12% of Customer Data — Avoiding Data Breaches & What to Do When They Happen

    Businesses Expose 12% of Customer Data — Avoiding Data Breaches & What to Do When They Happen

    It’s a frightening reality: 12% of businesses are exposing their customers’ private data. Data breaches cost companies tens of billions of dollars each year, but the financial damage is only the tip of the iceberg.

    The personal data of customers, including contact information, social security numbers, and credit card numbers, is being put at risk. So how can businesses protect themselves from data breaches?

    Types of Data Breaches

    Data breaches come in many shapes and sizes, and they can occur in any organization, from small businesses to large corporations. They can range from small-scale incidents that may only affect a handful of customers to large-scale incidents that affect millions of customers.

    Phishing, Malware, and Ransomware

    The most common types of data breaches include malicious attacks, such as hacking, ransomware, and phishing. These kinds of cyberattacks often involve criminals sending malicious emails or links to unsuspecting customers, hoping to gain access to their data.

    Insider Threats

    Another type of data breach is the insider threat. This occurs when an employee or other person with access to a company’s systems has malicious intent or acts carelessly and exposes customer information.

    Insider threats can be incredibly difficult to detect, as they often go unnoticed until it’s too late.

    Database Breaches

    Database breaches can also occur when hackers gain access to a company’s database and steal sensitive information from there. This type of breach is often caused by vulnerabilities in the system or weak passwords, which makes it easier for hackers to gain access.

    Insecure APIs

    APIs are often used by companies to allow third-party applications to access their systems. If these APIs aren’t properly secured, hackers can use them to gain access to customer data.

    DDoS Attacks

    DDoS (Distributed Denial of Service) attacks are often used by hackers to overwhelm a company’s systems, making them unusable. This type of attack can be incredibly damaging, as it can prevent customers from accessing the services they need, and in some cases, lead to data being stolen.

    The Impact of Data Breaches

    Data breaches are a growing concern for businesses, especially those that collect and store large amounts of customer data. When a data breach occurs, customer data is exposed and can be used for identity theft, financial fraud, and other malicious activities.

    As a result, businesses suffer from significant financial losses, reputational damage, legal risks, and customer dissatisfaction.

    The key to avoiding data breaches is to create a comprehensive customer data protection and privacy policy that covers all aspects of the organization’s data management. This should include:

    • policies on data access and storage,
    • employee training and education,
    • data encryption,
    • and third-party security protocols.

    It should also include a comprehensive incident response plan to ensure that any data breach is identified and addressed quickly.

    In addition, businesses should invest in data security solutions such as firewalls, intrusion detection, and malware protection. Regularly scheduled vulnerability assessments and penetration tests can also help identify and address potential security issues before they become a problem.

    Consumers should also do their part to protect themselves against cybercriminals. Enabling two-factor authentication, using antivirus software, and being informed about data collection activities will lead to higher security.

    Merchant Responsibilities After a Breach

    If a merchant experiences a data breach involving payment card information, they have several critical responsibilities to fulfill.

    Notify Relevant Parties

    • Immediately inform their merchant bank (aka acquiring bank) about the suspected or confirmed breach. The merchant bank will then notify the card brands like Visa.
    • Notify law enforcement and work with forensic investigators to determine the source and scope of the breach.
    • If personal information of customers was exposed, notify affected individuals as quickly as possible, as required by state data breach notification laws.

    Investigate and Contain the Breach

    • Conduct a comprehensive investigation using forensic experts to determine what systems were affected and what information was exposed.
    • Quickly take steps to contain the breach, secure systems, and fix vulnerabilities that led to the compromise.
    • Preserve evidence and document the investigation thoroughly.

    Provide Information and Assist with Fraud Prevention

    • Provide details to their merchant bank to identify the accounts at risk, determine if the compromise is ongoing, and take steps to minimize fraud losses.
    • Supply information to their merchant bank to prove they were compliant with PCI DSS requirements at the time of the breach.

    Possible Fines and Penalties for Merchants

    We’re not just talking about the consequences of a lack of cybersecurity, like not having backups or firewalls or preventative measures in place. This section is for less obvious consequences.

    • Merchants may face fines from the payment card brands like Visa if they were not compliant with PCI DSS requirements when the breach occurred.
    • They may be liable for card reissuance costs and fraudulent charges if it’s determined they were responsible for the breach due to negligence or non-compliance.
    • Merchants can also face penalties from the Federal Trade Commission and state Attorneys General for unfair or deceptive practices if they mishandled customer data.
    • The merchant’s acquiring bank may increase their transaction processing fees or even terminate their merchant account entirely if the breach resulted from PCI non-compliance.

    Developing a Data Breach Prevention Plan

    Developing a data breach prevention plan is an essential part of any business’s data security strategy. By proactively identifying and addressing potential security vulnerabilities, companies can protect their customers’ data and avoid costly damages both to the business and the customer.

    Step 1 – Assessing Customer Data

    Start by assessing the types of customer data the business holds, where it’s stored, and how it’s accessed. It’s also important to look at the organization’s procedures for handling sensitive data and identify any gaps in security.

    Companies should also look into third-party services they use to handle customer data and make sure they’re up to date with their own security policies.

    Step 2 – Review Security Measures

    It’s also important to review any current security measures in place and to keep up with the latest security protocols and technologies. Companies should look into encryption and other security measures designed to protect customer data and invest in employee training that focuses on data security best practices.

    Additionally, businesses should consider implementing a customer data privacy policy that outlines the company’s commitment to protecting customer data and the steps taken to ensure data security.

    Step 3 – Set Up Regular Security Audits

    Finally, companies should consider setting up regular data audits to detect potential security issues and ensure that customer data is being managed in accordance with the security policy.

    By taking these steps, businesses can protect their customers’ data and keep their business safe from the damaging effects of data breaches.

    How to Securely Backup Consumer Data

    No matter how secure a company’s data protection and privacy policies are, there is always the possibility of a data breach or other catastrophic event. As such, it is important for businesses to have an effective data backup strategy in place to protect customer data in the event of a disaster.

    Encrypt All Customer Data

    One of the most important steps businesses should take is to ensure that all customer data is encrypted. This ensures that even if an unauthorized party were to gain access to the data, it would be unreadable and impossible for them to use.

    Update Passwords Regularly

    Businesses should also make sure to update their passwords regularly and use strong, unique passwords for each account. This helps ensure that any unauthorized access attempts are quickly detected and blocked.

    Have Multiple Backups

    In addition, companies should have multiple backups of their customer data stored in different physical locations. This helps ensure that data can be quickly restored in the event of a disaster.

    Use Secure Cloud Storage

    Businesses should look into using a secure cloud storage provider to back up their customer data. Cloud backup solutions offer an extra layer of security and convenience, as the data is securely stored offsite in case of a disaster or security breach.

    Enable Automatic Backups

    Companies should enable automatic backups of customer data so that all customer data is backed up on a regular basis. This helps ensure that businesses are prepared for any potential disaster and can restore data with little to no data loss.

    Monitor Your Backups

    Finally, businesses should monitor their backups regularly to ensure that all data is securely backed up and any potential issues are quickly identified and addressed.

    How secure is your data?

    We know the importance of securing customer data, especially financial information. If you’re looking for more control over your data, speak with us at DirectPayNet. We’ll help you understand and develop a solution to securing customer data as well as link you with a more secure payment processor.

    Compliance with legislation such as GDPR (General Data Protection Regulation), CCPA (California Consumer Privacy Act), and more depending on your region is crucial for running a successful business and storing data.

    CONTACT OUR TEAM OF EXPERTS TODAY

  • Dark Patterns: Avoid These User Experience Tactics or Face FTC Takedown

    Dark Patterns: Avoid These User Experience Tactics or Face FTC Takedown

    User experience and design carry a hidden element of sinister manipulation unbeknownst to consumers called dark patterns.

    Dark patterns are insidious UX tactics used by companies to trick customers into completing unwanted or unnecessary purchases, or taking any action that yields more profit for the business at the detriment of customer satisfaction and trust.

    Consumers have had enough, and so has the FTC. Though not new to dark pattern takedowns, the Federal Trade Commission is stepping up, once again, threatening to punish offending websites if they don’t take steps to prevent or remove dark patterns from influencing their users.

    Read on as we discuss what dark patterns are, how harmful they can be, and what prevention measures online businesses should implement before it’s too late.

    What are dark patterns?

    Dark patterns are deceptive user interface tactics used to manipulate customers into completing an unwanted purchase or action. Companies rely on dark patterns to increase their sales and profits, often at the expense of customer satisfaction and trust.

    Though sometimes these tactics may appear to help the customer, they are actually designed to be confusing and misleading, making them difficult to spot and avoid.

    A great free resource is darkpatterns.org.

    Dark patterns are often hidden within user interfaces, making them difficult to spot without careful examination. One example is pre-ticked boxes which can lead customers accidentally agreeing to services or products they don’t want. They can also involve the use of confusing language, making it hard to understand the terms and conditions of a service or product. The use of visually appealing images and fonts can also be used to influence customers, making them more likely to click on certain links or buttons.

    The FTC has recently stepped up enforcement against companies using dark patterns, threatening to take down any websites which do not take steps to prevent their customers from being deceived. Companies must now ensure they have an ethical approach to user experience design or face the consequences.

    It’s not only the FTC, though. The California Consumer Privacy Act (CCPA) also provides a regulatory checklist for data protection and consumer choice. If you are found in violation of CCPA, you have 30 days to amend your deceptive design patterns and improve the customer experience before facing fines.

    The most infamous FTC takedown regarding dark patterns is for the company Vonage, which will pay $100 million in a settlement.

    How do dark patterns affect consumers?

    Dark patterns are an unfortunately commonplace UX tactic used by companies to take advantage of customers. These patterns involve deliberately misleading or confusing customers in order to get them to do things that benefit the company but not the customer, such as extra purchases or clicking on ads. This financial benefit is gained at the expense of customers’ trust and satisfaction, leading to frustration and a damaged relationship with the business.

    The Federal Trade Commission (FTC) has recently taken notice of this unfair practice, issuing warnings to offending businesses and stating that sites can be taken down if they don’t take steps to prevent the use of dark patterns. These steps include making sure their UX and user interface design practices are transparent and easily understood. This puts the onus on companies to make sure their customers understand the products they’re buying and the actions they’re taking, thus giving the customer the power to make informed decisions.

    Dark patterns are an unfortunate but pervasive problem in the online consumer landscape, and the FTC’s warning underscores the need for companies to take responsibility for their UX designs. Consumers deserve to have a good user experience and not be tricked into doing something that benefits businesses more than it does them. Now, more than ever, companies should be aware of their responsibilities to their customers, and take steps to ensure that their UX is free from manipulative dark patterns.

    The FTC’s main focus at the moment is on the subscription market, which also happens to be the most lucrative business model.

    12 Examples of Dark Patterns

    There are 12 different types of dark patterns. Below, we’ve outlined what each is so you can avoid using them on your storefront.

    1. Bait and Switch

    This involves presenting customers with offers that lead them to believe they’re getting one product or service, only to switch it up at the last minute and offer something else during the checkout process.

    In other words, it’s when a user sets out to do one thing but a different, undesirable thing happens instead.

    2. Confirmshaming

    This dark pattern involves emotionally berating customers and evoking a feeling of guilt when trying to opt out of your service.

    Some confirmshaming tactics appear playful, but when it can have a serious toll on customers and their bank accounts.

    3. Disguised Ads

    This involves disguising ads as something else, such as a download button, an opt-in form, or a pop-up notification that tricks users into thinking it’s part of a product.

    The customer is not aware that they’re clicking on an ad, so they may be tricked into taking action when they didn’t intend to.

    4. Forced Continuity

    This dark pattern is similar to bait and switch, but instead of switching out the offer, the customer is forced to continue with it.

    This might involve signing up for a subscription service or entering into a contract that they didn’t intend to. For example, when a user isn’t informed of the ending date of their free trial, so they’re automatically charged for the full subscription price unintentionally.

    5. Friend Spam

    This dark pattern involves coercing users into sharing their contact information with the company in order to get a discount or other incentive.

    The user is asked to provide their friends’ details, which can then be used for marketing or other unsolicited offers. Think about when you download a new app and it immediately asks you if it can access your contacts. If you click “Yes”, the app then notifies all of those contacts that you’re using the app and they should download it too.

    6. Hidden Costs

    This dark pattern involves hiding additional charges until after the customer has completed their purchase.

    The customer may be surprised to see extra fees for shipping or taxes added on after they’ve already paid for the product. This can lead to a feeling of being scammed and an overall negative experience with the company.

    7. Misdirection

    This dark pattern involves redirecting customers to a different page than the one they intended to visit.

    For example, you may click on a link to view a product but be directed to the company’s homepage instead. This can be used to get the customer to take an action they weren’t expecting, such as signing up for a newsletter or making a purchase.

    8. Roach Motel

    This dark pattern involves making it easy for customers to sign up or subscribe, but very difficult to cancel their subscription or unsubscribe.

    The customer may find themselves locked into a service they no longer want, with no clear way to get out of it. This can lead to frustration and a feeling of being trapped.

    9. Sneak into Basket

    This dark pattern involves adding items to a customer’s shopping cart without their knowledge or consent.

    The customer may be unaware that the item is in their cart until they reach the checkout page, leaving them feeling tricked and taken advantage of. This can lead to distrust of the company and an overall negative experience with your brand.

    10. Trick Questions

    This dark pattern involves asking customers confusing or misleading questions in order to get them to take an action they didn’t intend to. These deceptive practices often use double negatives to confuse customers.

    For example, the customer may be asked if they’d like to sign up for a newsletter when what they really wanted was to download a free ebook. The customer may not realize that they’ve agreed to something they didn’t want, leading to frustration and distrust.

    A very popular example is a checkbox that’s been pre-checked, opting the user into something they aren’t aware of.

    11. Privacy Zuckering

    This dark pattern involves making it difficult for customers to understand how their data is being used and what permissions they are giving the company. It gets its name from Facebook’s Mark Zuckerberg.

    Customers may find themselves agreeing to terms and conditions without fully understanding them, leading to a feeling of being taken advantage of.

    12. Price Comparison Prevention

    This dark pattern involves preventing customers from comparing prices for a product or service.

    The customer may be unable to find the price of an item on the company’s website, or they may be blocked from accessing third-party comparison websites. This can lead to frustration and a feeling of being taken advantage of.

    By preventing customers from comparing prices, companies can pressure them into paying more than necessary for their purchases.

    How Companies Can Avoid Dark Patterns

    We have three simple steps for you to take to avoid using dark patterns, aside from being aware of the 12 types above.

    1. Be Transparent

    Be clear about what content is advertising and only collect data after receiving consent. This means that customers must be informed about what data you are collecting, how it will be used, and what choices they have regarding their personal information.

    2. Be Respectful

    Obtain informed consent from users before making changes to their accounts or collecting data. Make sure customers have a choice in the matter and are not pressured into agreeing to something they don’t want.

    3. Be User-focused

    Design your website, products, and services in such a way that the customer is always aware of what they are doing. Make sure customers know exactly what to expect before committing to anything.

    Dark Patterns Aren’t The Only Thing Threatening Your Business

    Dark patterns are a growing concern for consumers, regulators, and companies alike. They are often used unknowingly by companies, but they can have a huge impact on customer satisfaction, trust, and loyalty.

    The FTC has taken a proactive stance by issuing regulations intended to prevent businesses from exploiting their customers with dark patterns. It is up to companies to adhere to these guidelines and ensure that their websites are free of these strategies to ensure their customers have a positive and rewarding user experience.

    But dark patterns aren’t the only threat to your online retail or e-commerce business, your payment processor can be just as harmful if it doesn’t support your business model.

    If you offer subscription services or operate in a high-risk industry, you need a payment processor that supports your business type. We at DirectPayNet provide businesses like yours with a high-risk merchant account so you can operate without worrying about whether customers can make credit card payments or if you have access to funds. Get in touch with us today and tell us about your business needs.

    PROTECT YOUR BUSINESS TODAY