Identity theft law firms face a critical challenge: distributing settlement payments and restitution funds to victims who have already experienced financial fraud. With over 1.1 million Americans reporting identity theft in 2024 and fraud losses exceeding $12.7 billion, the stakes for secure, compliant payment processing have never been higher. Modern digital disbursement platforms transform this challenge into competitive advantage by streamlining fund distribution while preventing secondary fraud against vulnerable victims.

Key Takeaways

• Identity theft victims lost $43 billion to fraud in 2023, with $23 billion from traditional identity theft affecting 15 million people
• 57% of electronic payments are received same-day versus 3-7 days for paper checks, accelerating victim access to recovered funds
• 63% of organizations experienced check fraud in 2024, making paper the most vulnerable payment method for identity theft settlements
• Digital platforms with KYC, OFAC, and W-9 collection built-in prevent secondary fraud while maintaining regulatory compliance
• Law firms offering flexible payment options—ACH, digital wallets, prepaid cards—achieve significantly higher redemption rates than check-only approaches
• Federal mandate requires cessation of government paper checks by September 30, 2025, signaling industry direction toward digital disbursements
• Real-time tracking and automated reporting reduce administrative burden while ensuring trust accounting compliance

Why Identity Theft Law Firms Need Specialized Payment Processing Solutions

Identity theft cases demand heightened security protocols that standard payment methods cannot provide. Credit card fraud alone accounts for 449,076 complaints—40% of all identity theft reports—creating a victim population already traumatized by financial crime and deeply skeptical of electronic transactions.

Traditional paper checks expose these vulnerable clients to additional risks:

• Mail theft schemes using "arrow keys" to access USPS mailboxes and steal checks, credit cards, and tax documents
• Check alteration fraud where criminals modify payee names or amounts using common household chemicals
• Forgery operations that replicate legitimate checks with sophisticated printing technology
• Extended exposure windows of 7-14 days during postal delivery and bank clearing processes

The compliance challenges extend beyond fraud prevention. Law firms handling identity theft settlements must verify claimant identities without creating friction that prevents legitimate victims from accessing funds. This requires layered verification including:

• KYC protocols cross-referencing government-issued identification
• OFAC screening to prevent payments to sanctioned individuals (with civil penalties up to $1,435,263 per violation)
• W-9 collection for proper tax reporting on settlement payments
• Duplicate claim detection preventing fraudsters from submitting multiple claims under different identities
• Audit trail generation documenting every verification step for regulatory review

Digital disbursement platforms purpose-built for legal settlements automate these controls while maintaining client experience. Settlement administration technology eliminates manual verification bottlenecks that delay payments to victims experiencing financial hardship.

The Unique Compliance Challenges in Identity Theft Cases

Identity theft victims present verification paradoxes that generic payment systems cannot resolve. Victims often have:

• Frozen credit reports preventing standard credit-based identity verification
• Compromised Social Security numbers requiring alternative identification methods
• Closed bank accounts from fraud incidents, necessitating diverse payment options
• Changed addresses to escape fraudsters, complicating contact information validation
• Damaged credit histories affecting ability to open new financial accounts

Class action settlement distributions for identity theft require platforms that accommodate these realities while maintaining fraud controls. The balance between security and accessibility determines whether victims successfully claim their rightful compensation.

Risk Factors in Traditional Payment Methods for Fraud Victims

Paper check distributions create specific vulnerabilities for identity theft settlements. Research shows check fraud resulted in over $1.3 billion in losses for financial institutions in 2023, with 47% of organizations reporting incidents involving checks.

For identity theft victims, check-based disbursements introduce:

• Reputational exposure when checks containing victim names and settlement details pass through multiple mail handlers
• Address verification gaps where checks sent to outdated addresses never reach intended recipients
• Cashing barriers for victims without bank accounts or valid identification documents
• Processing delays extending 10-14 days from issuance to fund availability, prolonging victim financial stress

Digital alternatives eliminate these friction points while providing real-time visibility into payment status and completion rates.

Understanding Payment Processing Software for Legal Technology Firms

Modern legal payment platforms integrate directly with case management ecosystems, eliminating redundant data entry and manual reconciliation. 82% of surveyed law firms now accept electronic payments, with 59% reporting faster collections through billing software integration.

Core Features Legal Payment Platforms Should Offer

Comprehensive digital disbursement systems provide:

• API connectivity enabling data synchronization with Clio, MyCase, PracticePanther, and other legal case management platforms
• Bulk payment processing supporting simultaneous distribution to thousands of claimants
• Real-time status dashboards tracking payment delivery, redemption, and completion metrics
• Automated IOLTA compliance maintaining proper segregation between client funds and operating accounts
• Multi-method distribution offering ACH deposits, digital wallets, prepaid cards, and retained paper check options
• Workflow automation triggering payments when settlement approvals occur in case management systems
• Reconciliation tools matching disbursements to trust account ledgers with automated journal entries
• Tax document generation producing 1099 forms for settlement payments exceeding reporting thresholds

The integration capabilities determine whether digital disbursements reduce administrative burden or simply add another disconnected system. Online payment software saves 35% of law firms 1-5 hours per month, with 5% saving 15+ hours monthly on payment processing.

Integration with Existing Legal Case Management Tools

Seamless data flow between case management and payment systems prevents errors and accelerates distributions. When settlement approvals trigger automatic payment workflows, law firms eliminate:

• Manual payment creation requiring staff to re-enter claimant information
• Approval routing delays where payment requests sit in email queues awaiting authorization
• Reconciliation errors from mismatched transaction descriptions between systems
• Compliance gaps when trust accounting rules are not enforced at the workflow level

Talli's AI-driven payment platform enables firms to sync real-time payout data to existing CRMs and create payout distribution campaigns with built-in reporting for legal teams and stakeholders. Banking services provided by Patriot Bank, N.A., Member FDIC.

Lawyers already spend only 2.6 billable hours in an 8-hour workday, making technology that recovers administrative time critically important for practice profitability.

Compliance Requirements: KYC, OFAC, and W-9 Collection in Legal Disbursements

Identity theft settlements demand verification rigor that exceeds standard commercial transactions. The paradox: victims whose identities were stolen now must prove those same identities to claim compensation.

Mandatory Verification Steps for Identity Theft Victims

Effective identity verification for settlement payments requires layered authentication:

• Government-issued ID verification cross-referencing driver's licenses, passports, or state ID cards against claimant-provided information
• Knowledge-based authentication asking questions based on credit history or public records (adapted for victims with compromised credit files)
• Multi-factor authentication using SMS codes, email verification, or authentication apps to confirm contact information ownership
• Address validation through USPS databases or alternative verification for victims using temporary addresses
• Duplicate detection algorithms comparing biometric data, device fingerprints, and behavioral patterns to prevent multiple claims from single fraudsters

OFAC sanctions screening must occur before every disbursement, with proper documentation of screening results, match resolution decisions, and risk assessments. Records must be maintained for 5 years after payment completion.

The W-9 collection process creates additional complexity for identity theft victims who may be reluctant to provide Social Security numbers to any organization. Digital platforms must:

• Encrypt SSN data both in transit and at rest
• Limit access to authorized personnel only
• Generate audit logs tracking every access to sensitive tax information
• Produce 1099 forms with proper issuance accuracy to prevent IRS compliance issues

Building Compliant Audit Trails for Settlement Administrators

Qualified Settlement Funds require comprehensive documentation of every transaction, verification step, and decision point. Audit trails must demonstrate:

• Who initiated each payment
• When verification occurred and funds were disbursed
• What payment method the claimant selected
• Why any claims were rejected or flagged for additional review
• How the platform ensured compliance with KYC, OFAC, and tax reporting requirements

Talli's platform automates and safeguards every claims payout with KYC, OFAC, W-9 collection, fraud mitigation, and audit logs baked in to meet tight deadlines without losing control over compliance or claimant experience. Banking services provided by Patriot Bank, N.A., Member FDIC.

Digital systems generate these records automatically, whereas manual processes rely on staff documentation that may be incomplete during high-volume distributions.

How Payment Processing Companies Support Legal Technology Operations

The infrastructure behind compliant legal disbursements requires partnerships with regulated financial institutions. Law firms cannot simply open PayPal or Venmo business accounts for settlement distributions—proper legal payouts demand:

• FDIC-insured banking partners holding settlement funds in segregated accounts
• Licensed payment processors authorized to operate within ACH network rules
• Prepaid card issuers regulated under state money transmitter laws and federal card network requirements
• Gift card distributors providing redemption infrastructure and customer support

Evaluating Payment Processor Credentials and Partnerships

When selecting digital disbursement vendors, identity theft law firms should verify:

• Banking relationships: Confirm FDIC membership and segregated account structures preserving QSF ownership
• Security certifications: Require PCI DSS compliance, SOC 2 Type II audits, and penetration testing results
• Nacha participation: Verify authorization to originate ACH transactions and compliance with operating rules
• State licensing: Check money transmitter licenses in jurisdictions where claimants reside
• Insurance coverage: Confirm errors and omissions coverage plus cyber liability policies

The platform's banking partners determine fund safety and regulatory compliance. Insufficient due diligence exposes law firms to:

• Commingled funds violating trust accounting rules
• Uninsured deposits risking total loss if the processor fails
• Unlicensed operations creating potential criminal liability
• Network violations resulting in ACH access suspension

The Role of Banking Partners in Legal Disbursements

FDIC membership provides essential protections for settlement funds. Talli supports dedicated accounts for every settlement, preserving QSF ownership, simplifying reporting, and ensuring legal compliance throughout the disbursement lifecycle. Banking services provided by Patriot Bank, N.A., Member FDIC.

Segregated account structures enable law firms to:

• Maintain separate ledgers for each settlement without opening dozens of bank accounts
• Preserve QSF tax treatment by keeping settlement funds legally distinct from firm operating funds
• Simplify reconciliation with clear transaction coding and automated reporting
• Generate stakeholder reports showing fund balances, disbursement progress, and remaining reserves

The banking infrastructure must support high-volume payout processing without degrading performance or creating processing delays during peak distribution periods.

Digital Wallet Integration and Flexible Payout Options for Claimants

Identity theft victims span diverse financial circumstances, from unbanked populations to tech-savvy professionals preferring instant digital transfers. A comprehensive payment approach accommodates this spectrum.

Why Claimant Flexibility Increases Redemption Rates

Approximately 5.9 million U.S. households lack traditional bank accounts, preventing direct ACH deposit acceptance. Elderly victims are more likely to rely on cash for 14% of all payments and may distrust digital methods entirely.

Successful platforms offer:

• ACH direct deposit for banked claimants preferring standard electronic transfers (typically free, 1-3 day settlement)
• Same Day ACH providing three daily processing windows with funds available within hours ($0.50-$1.50 fee)
• Digital wallets including PayPal, Venmo, Cash App for immediate availability (often free or 2-3% for instant access)
• Prepaid Mastercard/Visa for unbanked populations requiring no existing financial relationships ($2-$5 issuance fee)
• Gift cards to major retailers for claimants preferring merchandise redemption
• Paper checks retained as fallback option for technology-challenged recipients

The Easy Prepaid Mastercard is issued by Patriot Bank, N.A., Member FDIC, pursuant to a license from Mastercard International.

Payment Method Preferences Among Identity Theft Victims

Consumer behavior research shows 68% of consumers now prefer instant payments over traditional methods, driving demand for same-day disbursement capabilities. However, identity theft victims demonstrate unique patterns:

• Security-conscious victims prefer prepaid cards over ACH deposits to avoid sharing bank account numbers
• Financially distressed victims select instant digital wallet transfers despite fees to access funds immediately
• Elderly victims often choose paper checks due to familiarity and distrust of electronic systems
• Tech-savvy victims embrace mobile payment apps and expect seamless mobile experiences

Talli enables flexible payout options that increase redemption rates—claimants receive a secure link via SMS or email and pick what payment method works best, no bank account required. Banking services provided by Patriot Bank, N.A., Member FDIC.

Platforms limiting payment options to single methods demonstrate significantly lower completion rates, with up to 30% of recipients experiencing invalid contact information, expired payment cards, or closed bank accounts.

Streamlining Fund Distribution with Real-Time Tracking and Reporting

California Rule 1.15(d)(7) creates a rebuttable presumption of violation if lawyers fail to distribute undisputed funds within 45 days absent good cause. Digital disbursement systems help firms meet these obligations through automated workflows and visibility.

Building Transparency for Courts and Settlement Administrators

Settlement administrators and courts require comprehensive reporting including:

• Completion rate tracking showing percentage of issued payments successfully redeemed
• Demographic analysis identifying populations with lower redemption rates requiring additional outreach
• Fund flow documentation demonstrating proper segregation and compliance with court-ordered distribution plans
• Unclaimed funds reporting accounting for payments not redeemed within specified timeframes
• Audit-ready transaction logs providing complete payment histories for regulatory review

Talli's real-time dashboard provides total control and visibility—monitor delivery, completion, and engagement with full transparency on completion rates and fund flows, syncing payout data directly to your CRM. Banking services provided by Patriot Bank, N.A., Member FDIC.

Traditional paper check distributions require manual tracking through spreadsheets, with reconciliation consuming hours of administrative time monthly. Digital platforms automate these processes while providing stakeholder access to live data.

Using Real-Time Data to Meet Tight Legal Deadlines

Identity theft settlements often involve court-imposed deadlines for fund distribution. Real-time settlement dashboards enable legal teams to:

• Identify bottlenecks immediately when redemption rates fall below expectations
• Trigger additional outreach to claimants who haven't completed verification steps
• Reallocate resources to manual assistance for technology-challenged recipients
• Generate progress reports for court hearings without custom data extraction
• Project completion timelines based on current redemption velocity

The visibility transforms settlement administration from reactive crisis management to proactive process optimization.

Fraud Prevention and Security Measures in Identity Theft Settlement Payments

Distributing funds to identity theft victims creates ironic vulnerability: fraudsters target these very settlement payments through secondary scams.

Layered Security Protocols for High-Risk Disbursements

Comprehensive fraud prevention requires multiple defensive layers:

• Email authentication using DMARC, SPF, and DKIM to prevent phishing attacks impersonating law firms
• SMS verification codes confirming claimant control of registered phone numbers before payment release
• Payment link encryption with unique, single-use URLs preventing replay attacks
• Session timeouts forcing re-authentication after inactivity periods
• Device fingerprinting detecting suspicious access patterns or multiple claims from same devices
• Behavioral analytics flagging rush submissions or atypical user navigation patterns
• Transaction velocity limits preventing bulk fraudulent redemptions

Talli prevents fraud and enhances customer experience with fraud mitigation controls, KYC, and OFAC screening built into every payout workflow. Banking services provided by Patriot Bank, N.A., Member FDIC.

The Federal Reserve Financial Services survey shows 66% of businesses are likely to use instant payments if offered by their financial institution, with 10% higher satisfaction reported by instant payment users—but only if security controls prevent fraud.

Preventing Secondary Fraud During Settlement Distribution

Common scams targeting identity theft settlement recipients include:

• Advance fee fraud where criminals contact victims claiming to expedite payments for upfront fees
• Account verification scams requesting bank account or Social Security number "confirmation"
• Impostor schemes where fraudsters pose as law firm representatives seeking personal information
• Phishing campaigns using emails resembling legitimate settlement communications

Digital disbursement platforms combat these threats through:

• Branded communication templates that victims learn to recognize as authentic
• Consistent sender verification using registered domains and digital signatures
• Educational materials warning claimants about common scam patterns
• Direct customer support enabling victims to verify suspicious contacts
• "Never ask" policies clearly stating that legitimate payment platforms never request full SSNs or bank passwords

The platform becomes a trust anchor that victims can rely upon during a vulnerable period.

QSF Ownership and Fund Segregation Best Practices for Law Firms

Qualified Settlement Funds under IRC Section 468B provide tax benefits but impose strict operational requirements. Digital disbursement systems must maintain these structures while enabling efficient distributions.

Maintaining QSF Compliance During Digital Disbursements

QSF regulations require:

• Economic ownership remaining with the QSF until funds transfer to claimants
• Administrator control over all disbursement decisions and timing
• Segregated accounts preventing commingling with other settlement funds or firm operating accounts
• Proper taxation at the QSF level before distribution to claimants
• Complete documentation of all transfers and administrative decisions

Talli supports dedicated accounts for every settlement, preserving QSF ownership, simplifying reporting, and ensuring legal compliance throughout the disbursement lifecycle. Banking services provided by Patriot Bank, N.A., Member FDIC.

The technical challenge involves maintaining separate ledgers for each settlement while using shared payment infrastructure. Platforms must:

• Isolate fund pools at the database level preventing cross-settlement transactions
• Generate settlement-specific reporting without manual data extraction
• Apply correct tax treatment based on each QSF's structure and distribution plan
• Track administrative expenses separately from claimant distributions

Simplifying Reporting with Segregated Settlement Accounts

Law firms handling multiple concurrent identity theft settlements require clear financial separation. Illinois Rule 1.15B mandates lawyers maintain complete records for at least five years including:

• Written ledger for each client showing date, amount, source, and purpose of all transactions
• Written journal for each bank account documenting deposits, withdrawals, and balances
• Monthly reconciliations matching ledgers to bank statements
• Copies of all transaction documentation including electronic transfer records

Digital platforms automate these requirements, generating compliant records without manual journal entries or ledger updates. The automated settlement software eliminates common trust accounting violations that result from human error or incomplete documentation.

Increasing Claimant Redemption Rates with Smart Follow-Up Automation

Even with perfect payment infrastructure, settlements fail when claimants don't complete the redemption process. Unclaimed class action funds represent millions in rightful compensation never reaching victims.

Automated Reminder Strategies That Drive Claim Completion

Effective engagement requires multi-channel outreach:

• Initial SMS notification with secure payment link (highest open rates, immediate visibility)
• Follow-up email with detailed instructions and FAQ links (provides reference documentation)
• 72-hour reminder for unopened links (catches initial oversights)
• Incomplete application alerts when claimants start but don't finish verification (rescues abandoned sessions)
• Final notice series before payment expiration (creates urgency without harassment)

Talli's smart reminders across email, SMS, and more help claimants complete the payout process fast with higher take-up rates and smart follow-ups. Banking services provided by Patriot Bank, N.A., Member FDIC.

The communication cadence balances persistence with respect, recognizing that identity theft victims may be trauma-affected and reluctant to engage with financial systems.

Timing and Frequency Best Practices for Claimant Outreach

Research on settlement claimant experience demonstrates optimal notification patterns:

• Day 0: Initial payment availability notification via SMS and email simultaneously
• Day 3: First reminder to unopened messages (many check email less frequently than daily)
• Day 7: Second reminder with alternative contact methods (phone numbers for customer support)
• Day 14: Urgency messaging highlighting limited-time availability
• Day 21: Final notice before account deactivation or escheatment process

The automated sequences maintain engagement without overwhelming claimants or requiring manual staff intervention for thousands of recipients.

Scaling Disbursements: From 1,000 to 100,000 Recipients

Identity theft settlements range from small data breach incidents affecting hundreds to massive compromises impacting millions. Payment infrastructure must scale without degrading performance.

Infrastructure Requirements for Large-Scale Settlements

High-volume distributions demand:

• Concurrent payment processing handling thousands of simultaneous redemptions
• Load-balanced architecture preventing system slowdowns during peak usage
• Redundant data centers ensuring uptime during infrastructure failures
• Elastic bandwidth scaling network capacity during viral redemption waves
• Database optimization maintaining query performance with millions of transaction records

Talli powers payouts at any size—whether 1,000 or 100,000 recipients—enabling firms to launch, fund, and track payouts faster than ever without losing control. Banking services provided by Patriot Bank, N.A., Member FDIC.

The mass payout processing requirements differ fundamentally from standard commercial payment systems optimized for steady transaction volumes rather than settlement "waves" where tens of thousands of claimants redeem payments within days.

Managing Complexity in Multi-Jurisdictional Disbursements

Identity theft settlements often involve victims across all 50 states and international jurisdictions. This creates compliance complexity:

• State money transmitter licensing requirements varying by jurisdiction
• Escheatment rules differing in timelines and procedures for unclaimed funds
• Tax withholding obligations for international recipients
• Language requirements for Spanish, Chinese, Vietnamese, and other populations
• Currency conversion for payments to foreign claimants

Platforms must maintain compliance matrices tracking requirements across jurisdictions and applying appropriate rules based on each claimant's location.

Choosing the Right Payment Processing Partner for Your Identity Theft Practice

Selecting digital disbursement vendors requires evaluating technical capabilities, regulatory compliance, and client service quality.

Key Questions to Ask Payment Processing Vendors

Law firms should conduct thorough due diligence:

Technical Capabilities:

• What case management systems integrate natively with your platform?
• How do you handle failed payments due to invalid account information?
• What payment methods do you support for unbanked populations?
• Can you process payments in multiple currencies for international claimants?
• What is your system uptime percentage and disaster recovery plan?

Compliance and Security:

• Which FDIC-insured bank holds settlement funds?
• How do you maintain QSF segregation for multiple concurrent settlements?
• What security certifications can you provide (PCI DSS, SOC 2)?
• How is sensitive data encrypted at rest and in transit?
• What is your OFAC screening process and error handling?

Operations and Support:

• What is your typical implementation timeline from contract to go-live?
• Do you provide dedicated support during high-volume distribution periods?
• What training do you offer for law firm staff?
• How do you handle customer support for claimants with questions?
• Can you provide references from similar identity theft settlements?

Pricing and Economics:

• What are your platform fees (monthly subscription vs. per-transaction)?
• Are there volume discounts for large settlements?
• Who pays transaction fees—the law firm or the claimant?
• Are there setup fees, minimum commitments, or early termination penalties?
• What costs are associated with unclaimed funds escheatment?

Red Flags in Legal Payment Platform Selection

Avoid vendors demonstrating:

• Lack of legal industry experience evidenced by inability to discuss IOLTA or QSF requirements
• Generic commercial payment solutions without settlement-specific features
• Unclear banking relationships or inability to verify FDIC insurance
• Poor security practices like storing unencrypted Social Security numbers
• Limited payment options forcing all claimants into single method
• Inadequate customer support with slow response times or limited availability
• Hidden fees not disclosed in initial pricing discussions
• No client references or reluctance to provide settlement administrator contacts

Talli provides unrivalled customer support built for teams that need compliance, speed, and total visibility to meet tight deadlines without losing control over claimant experience. Banking services provided by Patriot Bank, N.A., Member FDIC.

The vendor becomes an extension of your practice, interacting directly with vulnerable clients during sensitive financial transactions. Poor vendor performance reflects on your firm's reputation and client satisfaction scores.

Frequently Asked Questions

How do digital disbursement platforms handle claimants who don't have email or mobile phones?

Modern platforms offer multiple access methods including landline phone numbers for voice-based payment setup, mailed redemption codes that recipients can enter via any internet-connected device, and assisted redemption through customer service representatives who walk claimants through the process. For truly offline populations, platforms can generate and mail prepaid cards automatically without requiring any digital interaction. The key is offering redundant pathways so technology barriers don't prevent rightful compensation.

What happens to settlement funds that claimants never redeem despite multiple contact attempts?

Unredeemed settlement funds are subject to state escheatment laws, typically requiring transfer to state unclaimed property offices after 1-3 years depending on jurisdiction. Digital platforms track escheatment deadlines and generate required state reports automatically. Before escheatment, platforms should attempt comprehensive outreach including skip tracing to find updated contact information, physical mail to last known addresses, and coordination with class counsel for additional claimant location efforts. Some settlements include cy pres provisions directing unclaimed funds to charitable organizations serving identity theft victims.

Can law firms use their existing business bank accounts for digital disbursements, or do they need separate infrastructure?

Law firms must maintain strict separation between client settlement funds and firm operating accounts to comply with state bar trust accounting rules. Digital disbursement platforms purpose-built for legal settlements provide the necessary segregated account structures, whereas using business bank accounts would create commingling violations. The platforms establish custodial accounts at FDIC-insured banks where settlement funds remain legally separate while enabling electronic distribution. Attempting to use business accounts for settlement disbursements violates ethical rules and exposes firms to discipline.

How do digital platforms verify identity for claimants whose credit files were frozen due to identity theft?

Advanced identity verification uses multiple authentication pathways beyond credit-file-based knowledge questions. Platforms can verify through government ID document validation (cross-referencing driver's license or passport data against issuing authority databases), mobile phone account tenure verification, utility bill matching, email account age verification, and multi-factor authentication using devices or addresses the claimant previously registered. For high-value claims, platforms may require video verification calls where claimants present government ID to customer service representatives, or notarized affidavits for claimants unable to complete digital verification.

What reporting do courts typically require for digital disbursement processes in identity theft settlements?

Courts generally require comprehensive reporting including: total settlement fund amount and current balance; number of claims submitted, approved, and rejected with rejection reasons; demographic distribution of claimants by state and claim amount; completion rates showing percentage of approved claimants who successfully redeemed payments; detailed accounting of administrative expenses deducted from the settlement fund; compliance certifications confirming KYC, OFAC, and tax reporting completion; and unclaimed funds reporting with escheatment plans. Digital platforms generate these reports automatically, whereas manual processes require extensive spreadsheet compilation and data reconciliation prone to errors.