How to Prevent Account Creation Fraud

Using stolen or fake information, fraudsters can create new accounts. These can be used for illegitimate activities such as credit card testing or referral chaining. This is a serious problem that can impact your business. It can also cause chargebacks and damage your brand. Luckily, there are several tools that can help you detect and prevent this type of fraud.

How fake accounts are created?

One of the first tools to detect account creation fraud was IBM’s Trusteer. Today, there are many software providers that offer services for this purpose. These can include a behavioral assessment, transaction assessment, and a reputation check.

Another way to prevent fraud is to use a network security tool. These can uncover hidden associations between accounts. For example, if a user signs up for a social networking site using a VPN, Facebook can identify multiple accounts created from the same IP address.

Some companies have a limited number of accounts per IP address. If a user creates multiple accounts, the company may decide to block them. Other times, fraudulent accounts can be a way for spammers to promote their products. These accounts can also be used to collect referral bonuses.

Bots can also be used to perform account creation fraud. Bots are especially effective at distributed denial-of-service attacks, which overwhelm networks. Some businesses are even using “honeypot fields” as traps to catch bots. Similarly, there are third-party vendors that can verify the accuracy of an email address, phone number, or other details.

Leave a Reply

Your email address will not be published. Required fields are marked *