Why Chariot’s Verification Process Is So Thorough

The Rising Threat of Payment Fraud

In the last few years, check fraud and ACH fraud have surged (doubling every 2 years) - and the trend is accelerating. Advances in AI have made it easier for bad actors to forge checks, fake identities, and intercept banking details. Our Donor Advised Fund and payer partners have seen this firsthand and are pushing for higher security standards industry-wide to protect themselves and nonprofits. See this linkedin post for 7 common problematic practices.

Why DAF Fraud Is Even More Prevalent

Fraud in DAF giving can be more common compared to other payment types. That’s because, in most DAF transactions:

• The nonprofit isn’t expecting the gift - Unlike a direct donation, where a donor might confirm the gift in advance, DAF grants often arrive without prior notice. This makes it easier for fraudsters to intercept or redirect funds without raising immediate suspicion.

  
  

• The donor doesn’t always expect an acknowledgment - Because the donor has already contributed to their DAF account (often months or years earlier) and the DAF sponsor is technically the one issuing the payment, many donors aren’t actively waiting for a thank-you note. This lack of follow-up can delay the nonprofit realizing funds never arrived.

  
  

• Interception goes unnoticed - If a check or ACH payment from a DAF sponsor is stolen or altered before it reaches the nonprofit, there’s often no trigger event—no bounced payment, no alert—to indicate a problem. That means the fraud can go completely undetected. Or in other scenarios, it can be months before the nonprofit discovers the loss.

  
  

This combination of low visibility and delayed detection means fraud in DAF giving can cause serious damage - not just financially, but also by eroding trust between donors, nonprofits, and DAF sponsors. That’s why Chariot created an industry leading compliance and verification process.

A One-Time Process for Long-Term Protection

Chariot’s verification process is generally a one-time step, aligned with U.S. banking regulations - specifically the Customer Identification Program (CIP) and FinCEN’s Customer Due Diligence (CDD) rules. You can find the text of the law here and an article explaining CIP requirements further here.

Completing it safeguards your funds and reputation by:

• Ensuring that all accounts are tied to legitimate, verified entities

• Preventing unauthorized withdrawals and fraudulent transactions

• Meeting the same compliance standards used by banks and major financial institutions

  
  

Once verified, a Nonprofit’s Chariot account uses non-debitable account and routing numbers, meaning they cannot be used to pull money from your account. This is much safer than sharing standard banking details or voided checks, which has your banking details public and can be intercepted, altered, or have bad actors pull from the nonprofit’s account.

How We Protect Your Information

Your verification data is stored exclusively by our identity verification provider, Footprint, not on Chariot’s servers. Footprint uses secure enclaves, a highly advanced security method that keeps sensitive information isolated from the rest of the system. It ensures memory isolation, CPU isolation, and network isolation so that no external process, user, or system can inspect or alter the enclave’s contents.

• Even in the event of a hack, enclave technology ensures that your data cannot be accessed or leaked. You can read more about Footprint’s approach here.

• This is far more secure than traditional cloud storage, which is more vulnerable to large-scale breaches.

  
  

In Short

In today’s environment, fraud prevention isn’t optional, it’s essential, especially in the DAF space where grants are often intercepted without anyone noticing.

Chariot’s verification process is designed to:

• Meet the highest legal standards under U.S. banking law

• Stop modern fraud tactics

• Protect your data with industry-leading security using secure enclaves

• Give you peace of mind with a one-time setup that keeps you protected and connected going forward

  
  

Chariot’s verification and fraud prevention isn’t just a compliance requirement - it’s a step change in the DAF space.