By Gautam Sehgal, Director at SHIELD
Fraudsters can run emulators and automated scripts to create thousands of fake accounts in the space of a few seconds. These fake accounts are then used for fraudulent activities, such as payment fraud, promo and incentive abuse, multi-account collusion, and the spread of misinformation. And the problem is only getting bigger.
Earlier this year, Meta pursued legal action against Voyager Labs, who allegedly set up fake accounts to scrape information from users. And a new group, dubbed Automated Libra, recently registered between three and five fake GitHub accounts every minute to abuse GitHub Actions workflow for mining.
Fraudulent activities using fake accounts drain businesses’ resources and ruin the experience for genuine users. It’s also hard for businesses to stop them – fraudsters tend to create so many that it can become an endless game of whack-a-mole if organizations address fake accounts only after fraud has been committed.
How can companies halt fake accounts and be proactive in uncovering what is fake and what is real? There are three ways businesses can spot fake accounts:
- Identify returning and fraudulent devices on platforms with extreme accuracy. Fraudsters often use a single device to carry out fraud, such as creating fake accounts or conducting account takeovers. They have also learned that they can evade fraud prevention technologies through tools and tactics such as factory resets. Many fraud attacks following on from the use of these fake accounts then remain undetected and cost businesses billions. The ability to identify returning and fraudulent devices accurately, using machine learning and AI, is therefore critical to stopping fraud at its root.
- Learn to spot tools that are used for fraud. Emulators are often used to create and operate fake accounts at scale. VPNs are used by fraudsters to hide their attack origin and bypass geo restrictions. Fraudsters can also make unauthorized modifications to apps to bypass security measures, or abuse app functionalities. Detecting these tools in real-time can go a long way in helping businesses mitigate fraud before it happens and take instant countermeasures to keep their platform safe.
- Recognize genuine vs fraudulent users. It’s important to be able to spot the exact moment a user begins exhibiting malicious behavior so that immediate action can be taken. Even authentic user accounts can be temporarily compromised. Setting overly aggressive thresholds on fraud detection tools can result in many false positives and legitimate customers being flagged. This creates negative customer experiences and breaks customer trust, which will only result in frustration, loss of business, or customers switching to competitors.
Leading hyperlocal delivery platform Dunzo is an excellent example of how a company strengthened its defenses against fraud. Dunzo is the first quick commerce company in India leveraging mobile-first risk intelligence to tackle fraud and stay ahead of emerging threats.
Dunzo knew that fraudsters could create multiple fake accounts to abuse limited time promotions, rack up referral bonuses, and snatch up coupons, leaving genuine users at a disadvantage. Dishonest delivery partners could use fraud tools such as GPS spoofers to ‘arrive’ earlier than they physically have and claim incentive bonuses they do not deserve. The additional distance would translate into longer delivery times, compromising Dunzo’ s quick delivery promise and creating a negative customer experience.
To proactively prevent fraud, Dunzo utilized an advanced risk intelligence solution to identify fraudulent devices used to create fake accounts – the source of fraud. The Dunzo team was able to track down multi-accounters instantly, helping them direct incentives and payouts to genuine users instead. The solution also enabled Dunzo to identify the exact moment users engaged in fraudulent activities or use tools such as app cloners, GPS spoofers, and emulators.
Like Dunzo, companies need to become more proactive about fake accounts, which will continue to be prevalent as fraudsters try to find more ways to cheat businesses and consumers alike. Businesses only have a few chances to deter fraud before it ruins their reputation, finances, and more.