Fraud: what is important for business representatives to know

Fraud, that is, fraud, which in translation from English sounds like fraud, deception - this is one of the extremely serious problems in the field of e-commerce, which is very often encountered by payment and search systems, owners of online stores and other services, sites. Absolutely all companies whose activities involve accepting payments through websites can face it. If you are exposed to such an impact, then you are guaranteed to face losses, risk ruining your reputation, losing to competitors, and more.

The modern market is making a lot of efforts to combat fraud. Mechanisms designed to resist such influence are constantly being developed. They are tested in practical conditions, which allows us to evaluate their effectiveness. The essence of the method is that the attacker's actions are similar to real users. Alternatively, he can pay with stolen payment methods, be it PayPal, a payment card or other methods. He can also manifest himself with fake views, downloads, clicks and other actions resembling the work of real people.

As part of today's review, we will dwell in more detail on what fraud is, what types of fraud it can be, in what areas it is used and how it manifests itself. We will tell you why it is dangerous and provide a number of signs that will indicate this attack. We will describe effective methods of protection against fraud that today's market offers.

What is fraud and where does it come from

Regardless of what kind of fraud you encounter in practice, in any case it will be an illegal and unlawful action. One that can seriously damage business development. The very essence of such an impact primarily depends on the area in which such work is carried out. Most scammers working in this area (fraudsters) use the following strategies:

1. Imitate the actions of real users, that is, as an option, they can wind up clicks through bots, launch massliking, mass following, form fake orders, downloads, etc.
2. Assign to themselves the actions of users who came to your business through organic traffic. Let's assume that your store received an order from a person who simply went to your site through a search engine and liked your product. Here, fraudsters can falsify data so that you will see that it was they who attracted the client.
3. Steal money or other material assets. Often, fraudsters buy goods for themselves on the Internet and pay for them with your cards, having previously obtained access to payment details.

But this is not all. There are many types of fraudulent actions that can be classified as "fraud" today. In practice, fraud is often used by unscrupulous partners and close competitors. It can manifest itself in falsifying the results of a particular advertising campaign, launching bot attacks in order to harm the business. Fraud has received very wide application in affiliate marketing. In most cases, it manifests itself in increased traffic, an increased number of calls, as well as many other things, which we will discuss in more detail below. As a result, it turns out that managers spend time and effort on processing false orders, businesses spend their own funds on advertising campaigns, because they are sure that they work. And what is the result? All this is done in vain - the business does not receive any profit, only losses.

Fraud is a fairly comprehensive category that includes various fraudulent actions. But their essence will always consist in causing harm to the business or obtaining their own benefit. In some cases, both of these goals coincide. And the first thing you need to do in order to protect yourself from such influence is to delve deeper into this topic in order to understand what you may encounter in practice and, based on this, choose the most effective means of protection for yourself.

Getting to know the main types of fraud

Today, fraud can be formed due to the traffic of the attacker himself or the bot that he has previously configured. The second option is very often used in practice to boost site visits. Here, specialized programs are launched, within the framework of which bots generate empty clicks, create visible activity on the site, increase the number of views for the system. They can also be used to fill out application forms. That is, from the outside, such actions look exactly the same as real ones, but they do not give any positive result to the business.

If we talk about fraud that is carried out by a real person, then in most cases users are offered to perform certain actions for a reward. That is, the attacker attracts ordinary people who will click on ads, view ads and even contact the business's sales department, visit offline representative offices for a fee.

Fraud is present in almost all areas of business to one degree or another. Today, it is classified according to different criteria. But still, we can distinguish 2 large groups:

1. Depending on the source.
2. Depending on the area of use.

We will now consider both of these categories in more detail.

Types of fraud depending on the source

We will consider the types of fraud depending on the source using the example of the relationship between a telecom operator and a subscriber. Here, the following groups are distinguished:

• User. A striking example of such fraud would be illegal connection to telecom operator services, making calls at someone else's expense, failure to pay for use, counterfeiting credit cards and much more. That is, this will include all these illegal actions, within the framework of which the client tries to deceive the operator.
• Operator. Here, the picture is the opposite of the previous one, that is, the operator directly performs actions aimed at deceiving the client. This may be connecting paid services without asking, high cost of unsubscribing from such actions, using the operator's anti-fraud system, which prohibits sending SMS messages to short numbers. Most of these services are free and require basic connection.
• Inter-operator. Here, fraudulent actions are carried out between two operators working in the same market niche with the aim of deceiving each other. Here, traffic redirection, provision of fairly expensive services in the form of budget ones, etc. are often used.
• Internal. In this case, the fraudster will be one of the company's employees who has access to important information and the corresponding equipment. That is, this is an intruder who uses his work position.

The last option can be called one of the most interesting. Moreover, it will be typical for almost any business, that is, any company can employ a person with weak moral principles who has certain access rights. Someone who would not mind leaking important data for a certain fee. Let's consider the internal fraud option in more detail.

Features of internal fraud

The first thing I would like to draw attention to is that not only the company as a whole, but also other employees and clients can become victims of internal fraud. Depending on the specifics, this fraud can be classified into separate groups: theft and abuse. Theft involves stealing any material assets including money, while abuse is characterized by extracting personal benefit, but not through direct theft.

The work of any fairly large business is associated with the constant movement of money. This chain involves buyers, suppliers, sellers, banks, operators. These can be both legal entities and individuals. And it is clearly impossible to exclude the possibility that someone with a certain level of access will decide to get some of the moving funds. This opens up really huge opportunities for various options for abusing one's position:

• provision of fictitious services;
• concluding an agreement with an affiliated contractor;
• inflating the cost of services or goods provided;
• connecting to more favorable corporate tariffs of friends, relatives;
• writing off a certain amount of money from customer accounts, etc.

These are far from all the opportunities that open up to people who want to earn money dishonestly in the company. For example, the same fictitious services. An unscrupulous employee can conduct all these transactions on paper, and they will be counted by management as effective work, the employee will receive additional compensation for this, including money. But in reality, the company will not only not receive new clients and an influx of funds, but, on the contrary, will lose funds and will not develop. This is something that will not only negatively affect current income, but will also worsen the development prospects.

If we analyze all the fraud that has been identified to date, the damage from the actions of internal employees will be maximum. And everything is primarily due to the simplicity of implementation: the staff has all the necessary access keys and the relevant knowledge, allowing them not only to effectively carry out fraudulent actions, but also to remain unnoticed for a long period of time.

Types of fraud depending on the launch area

Fraud is classified not only depending on the sources, but also based on the area in which it is used. It is detected today in various areas, but still the leaders in fraudulent activities will be:

1. Banking.
2. Marketing.

Let's consider both options in more detail and provide those fraudulent activities that are detected here most often.

Fraud in the banking sector

The most popular and widely used type of fraud in the banking sector will be fraud that is carried out using credit cards. We would like to draw attention to the fact that here we do not take into account the loss of the card. If this happens, then you need to contact the bank as soon as possible and block the credit card so that unscrupulous individuals do not have time to use it. Here we are talking about the fact that attackers can obtain information about the cards that are in your wallet or even securely locked in a safe. And here, too, there are several possible options:

• Phishing. This phenomenon can often be found on marketplaces and other popular trading platforms. It is assumed that attackers create a fake page to steal personal information, including information about bank cards of potential clients.
• Fake ATMs. They quite accurately imitate a real device, but have nothing to do with the bank. When you decide to use them, such an ATM simply reads all your data from the card, but at the same time it will display an error on the screen that it is currently impossible to issue funds, return your card back to you and you will not even guess that your data is already in the hands of attackers.
• Lebanese loop. Such an attack involves special damage to the card reader in ATMs, which causes the card to be captured. As a result, all that remains for the scammers is to simply come to such a device after you leave it and use a regular fishing line to pull out the card.
• Skimming. It involves using real ATMs, those that do not have built-in cameras, installed in a not very crowded place. In this case, a special skimming device is placed on their keyboard. It is very difficult to notice it with the naked eye, since it looks like the original keyboard. But when a person tries to withdraw money, the device scans the card number, PIN code, and other data.
• Insecure passwords. This is relevant for cases when a person uses the same password to access various services, sites, including as a PIN code on bank cards. In this case, fraudsters can hack your account on social networks and use the obtained data to steal bank details.
• Sniffering. The essence of this fraud is that fraudsters intercept data that is sent using public Wi-Fi. Therefore, we once again strongly recommend avoiding the use of such networks altogether. But even if there is a serious need for this, refrain from sending important information.
• SIM card fraud. Today, a huge number of accounts are linked to users' phone numbers. Fraudsters already have sufficient knowledge and skills to access personal data using the number itself and even make purchases online through electronic banking.
• The so-called "letters or calls of happiness". The point is that you receive a call or message indicating that you have won a certain amount of money. And in order for them to be credited to you, you must provide the card number and related information. It is clear that you should not believe in such things, but, unfortunately, many people fall for such deception. Also, in practice, there are often cases when a message arrives with information that your card is blocked and to unblock it you need to provide a confirmation code. Banks do not send such letters. If it happens that your card is actually blocked, you will receive a message from the bank asking you to come to the nearest branch and do all the work directly with the operator.

We should also not forget that today on the Internet you can find a huge number of numbers and details of stolen or hacked cards, wallets. And we cannot recommend anything here except to be extra vigilant.

Perhaps you will be interested in such a question as data security and reputation protection on the Internet.

Fraud in marketing

Very often, companies or individual specialists working in marketing suffer from fraud. Here, the attackers do not use card data, but imitate actions. Quite often, this is used to increase the KPI of the work performed, such as downloads, clicks, purchases, etc. To implement such tasks, bots or special click farms are very often used. And all this will work until the advertising budget is spent. Unfortunately, such actions are often resorted to not only by fraudsters or direct competitors of a business who want to harm it, but also by unscrupulous specialists, or even entire marketing agencies who want to show the effectiveness of their work not in increasing real business indicators, including sales, but with empty numbers that will not provide a positive impact on the development of the company.

Here, there are also several techniques that are used most often:

• Spoofing, which involves counterfeiting the SDK. In this case, data transfer between the server and the application is launched, a fictitious installation and related actions are performed. In this case, the attacker sees all the data, understands what information is transmitted when a particular click is made. This is what allows him to repeat the actions of a real person in detail, whether it is simply opening an application or adding a product to the basket. To exclude such fraudulent actions, it is necessary to encrypt data packets, and use only dynamic parameters for their transmission.
• False installations. In this case, attackers use emulators to create an unlimited number of random devices. It is through them that downloads and installations are simulated, as well as related actions that a real person often performs when working with this or that software. Moreover, here it is possible to maintain sessions in an active state for a long time, which will allegedly indicate increased interest on the part of the consumer.
• Click spam. If a person installs an application, he can find it both through organic search, based on recommendations from friends or personal interests, and through advertising. Organic users will be more valuable for businesses, since they allow tracking the demand for a product on the market. But scammers have already learned to pass off organic transitions as paid ones. That is, for a business, the user will be considered paid, and his interest will not be taken into account at all, which will negatively affect the development of a subsequent strategy for business development.
• Click injection. This is one of the more modern and technological varieties of click spam, which involves faking clicks on a particular advertisement during its download. Such actions are counted by the system as a paid installation, and not an organic transition, which accrues bonuses to the webmaster and he receives income from this. It seems that there is nothing illegal in this, since some person actually paid for the product and uses it in practice. But here, deliberately false advertising statistics are formed. All downloads and installations in this case are recorded only on paper. That is, money is invested in advertising, but in practice it turns out to be ineffective. Advertising budget, as well as time, are wasted.
• False purchases. Such fraud is launched by users. In this case, the purchase is made, but payment for the goods is never made. This negatively affects the statistics and does not allow for correct analytics, which also negatively affects the business's income.

The statistics here are very disappointing, since for every 1 real click there are on average 2.7 fraudulent ones. That is, they do not provide any benefit to the business - only waste.

What are the main dangers of fraud

Launching fraud in relation to your business is fraught with quite serious consequences. Here are just a few key points:

1. Waste of advertising budget. Here, the effectiveness of launched advertising campaigns depends on such a concept as the cost of a lead. That is, how much it costs to attract one person to the business. Here, fraud is what will suck all the money out of your advertising campaign, but will not attract people.
2. Increased expenses. This is observed when fraud is launched across several channels. In this case, it is difficult to navigate which funds go where, it is impossible to generate visual statistics.
3. Obtaining fake metrics. All that information about the effectiveness of the advertising campaign and the work of the business as a whole will be false. The indicators can sharply increase and, conversely, decrease, and cheating will occur in parallel with real traffic. Modern fraudsters have learned to hide their actions so effectively that the marketer receives metrics that will look quite natural to him.
4. Failure to fulfill the plan. Everything will look very nice on paper, but the business's income will not increase, and in some cases, even decrease.
5. Increased workload on managers. Your staff will have to spend more time processing fake applications and calls. At the same time, it may well be that your real customers will not be able to use professional help and advice from specialists, since they will not be able to get through the entire wave of fraud.
6. Making incorrect business decisions. We have repeatedly said in our reviews that only a comprehensive development of a future strategy based on obtaining the most detailed, complete and accurate picture of the state of the current market in your niche can give good results in practice. In the presence of fraud, you will do all this work, but in the end you will receive fake information. If you lay it down as the basis for your future strategy, you will not achieve any efficiency in the future.

That is, the presence of fraud is what will lead your business in the wrong direction and will not allow you to ensure full development.

How to identify fraud: the main "symptoms"

Any uncharacteristic activity occurring in business is what should alert you and make you think about possible fraudulent influence. There are also a number of markers that will most likely indicate the presence of fraud. In this case, we are talking about the following:

• A very sharp, uncharacteristic increase in the number of orders. Let's assume that for your business, receiving 25-30 orders per day is quite standard. And at one point you see that 100 orders have been placed. If we are not talking about pre-holiday days, if you have not launched some very attractive promotional program before, then most likely such activity is caused by scammers. Do not spare the time, call the customers. If inactive numbers are found, this will definitely indicate fraud.
• Too uniform a user behavior model. If you analyze the behavioral factors of your audience, you will see that people visit approximately the same pages, perform the same actions, then this will also indicate the work of intruders.
• Change in behavioral factors. You have already noticed that the average time the audience stays on your pages is 10 minutes. Now you see that most users connect for 1-2 minutes or, conversely, stay on the site for up to half an hour. This will be the uncharacteristic behavior that should alert you.
• Inconsistency in location. Alternatively, your online store operates in Georgia, but you see that the order comes from an IP address tied to the United States. There is a possibility that in this case the user is simply using VPN or a proxy server. Don't be lazy and contact him to find out whether such a discrepancy is accidental or whether these are deliberate actions of fraudsters.
• False information in orders. This mainly concerns the client's name, email address. Here, one glance will be enough to understand that they do not belong to real people and are very similar to solutions generated in specialized programs.
• Your managers see orders, but the analytics system does not identify them. The fact is that the same Google Analytics, Yandex.Metrica collect data on conversions, while information about the orders themselves is displayed only on the administrative panels. That is, the lack of confirmed conversions is one of the key signs of fraud.
• The vast majority of orders are placed at night. Of course, we cannot exclude the possibility that purchases are made by a person who leads a more active nightlife or is located in regions with a different time zone. But still, such actions should alert you, especially if they are massive.
• You see that the number of target actions on your site has increased significantly, but no new transactions are recorded. That is, with very high traffic, the conversion remains at a very low level. In addition, you have noticed that refusals have become very common at different stages of the funnel.
• Your managers are forced to handle a huge number of calls every day. Such actions are very common in practice when competitors simply want to overload your phone lines and prevent real customers from contacting you. As a result, they go looking for similar products on other services.

Unfortunately, even advanced modern traffic filtering systems cannot always withstand the increased influx of bots. They are becoming more and more intelligent, often their work is based on neural networks. This is what allows you to bypass the protection mechanism by building a fairly non-standard behavior.

Ways to combat fraud

Business representatives and IT specialists work hard to ensure sufficiently high rates of protection against fraud and other fraudulent activities. But the attackers themselves do not stand still. They identify all these methods, work to bypass the imposed prohibitions and restrictions, continuing to carry out their illegal activities. But still, there are 2 main methods that you can use to minimize the risk of fraud in your own business:

1. End-to-end analytics. It will be especially useful if orders to your sites come from different sources. In this case, it will be very difficult to interpret the indicators, identify real and fake orders or other actions. If you launch end-to-end analytics, you will get a tool that will record all interactions between your business and the client, including ad views, time spent on the site, calls, correspondence, etc. You will clearly see through which channel the application was received, you will be able to track the entire path of the buyer through the sales funnel. This is what will make the entire interaction process as clear as possible and will allow you to identify the slightest anomalies and deviations from typical behavior.
2. Using anti-fraud systems. This is specialized software that will pass all traffic through itself, filtering it in order to identify bots. You initially set the parameters that will be typical for your business, and the program will respond to any uncharacteristic actions, and then conduct comparisons by ID, IP, present in your CRM system. The client's phone number is checked, matches on it, the history of requests, site visits is studied, sources, completed transactions or reservations of goods, application histories from different sources, including social networks, instant messengers, chats, etc. are checked. By performing such a comprehensive analysis, it will be easier to identify uncharacteristic behavioral factors and suspect fraud. The convenient thing is that it automatically tracks the lead's movement through the sales funnel, which allows you to quickly identify fraud. That is, you no longer need to manually check all clients, study the call history, waste managers' time processing fake orders. The anti-fraud system takes care of all this work. Moreover, thanks to the built-in analytics, you can get detailed information on each individual call, application, evaluate their quality and identify fraud. As a result, you will be able to make adjustments to your advertising budget, minimize the costs of attracting leads, block channels with low efficiency and invest funds where the audience really comes from.

If your company manages to get rid of fraud, you will notice how much the profitability of the business will improve, advertising costs will decrease. You will be able to test your own hypotheses based on the most accurate and real data, and not the analytics that will be collected taking into account the actions of fraudsters. In addition, key business processes can be easily automated, which eliminates manual work with each individual client.

Summing up

As you can see, fraud is an extremely common phenomenon in modern practice. It is used by scammers to implement various tasks, ranging from click fraud, placing fake orders and up to stealing personal information and money. Yes, today there are quite reliable solutions designed to provide protection against such actions of intruders. But still, in parallel with anti-fraud systems, end-to-end analytics, in practice it is also recommended to use an additional solution designed to ensure high security and privacy of work on the Internet in general. And here one of the best solutions will be mobile proxies from the MobileProxy.Space service.

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