Online Fraud Prevention
Online fraud threats have skyrocketed in recent years, with losses now predicted to exceed $206 billion by 2025. As fraud increases in both prevalence and sophistication, even enterprises with strong fraud prevention programs struggle to confidently distinguish real consumers from cybercriminals. Businesses are missing a crucial element in their fraud control frameworks: visibility of stolen information that enables criminals to evade detection and perpetrate account takeover and online fraud.
For organizations with a keen eye on customer experience, finding a balance between causing friction to validate legitimate users and transactions and preventing fraud can be tricky. However, a lot is on the line when it comes to the impacts of online fraud, including customer retention, time spent on manual review, losses due to new account fraud, account takeover and mule accounts, and compliance with anti-money laundering requirements.
Organizations need to find new, cost-effective ways of detecting fraud and reducing customer friction when opening new credit and deposit accounts, accessing existing accounts online, transacting on your site, and more.
Prevalent Types of Online Fraud and Popular Attack Methods
Using stolen credentials, criminals access victim’s rewards programs and drain accounts, transfer points, obtain free rewards, collect PII, or purchase gift cards they then sell on the criminal underground, or use themselves before victims can notice.
Stolen Data – The fuel of the fraudster:
Fraudsters gain access to stolen personal information and online credentials through a number of means:
Information is pilfered from malware-infected machines – including in-use credentials, active web session cookies and browser fingerprints.
Data acquired through these various means is made available to fraudsters through dark web marketplaces where the information is tested, priced and traded.
Hard-to-Detect Fraud: You Can’t Prevent What You Can’t See
While fraud prevention and detection solutions are advancing in their sophistication, one aspect they miss is how malware amplifies risk exposure. When a customer’s computer or device is infected, all of the data and activity on that system is at the fraudsters’ fingertips, enabling them to:
Siphon PII used for identity and new account fraud, as well as login credentials that facilitate ATO
Use stolen browser fingerprints and cookies to impersonate a customer and bypass login and multi-factor authentication (MFA)
Access information that can be used for social engineering or phishing
Infected systems create an extreme risk for online fraud and identity theft. Malware provides the proverbial keys to unlocking the kingdom – and as long as the system remains compromised, measures like resetting passwords and even applying MFA are not always effective ways to prevent fraud. Mitigating this risk requires additional monitoring and scrutiny, and it starts with gaining visibility into the degree to which your customers may be at higher risk of suffering an attack from a variety of threats including malware.
How to Prevent Online Fraud
What is fraud prevention? Fraud prevention is the ability to identify potentially fraudulent transactions and prevent them from causing losses or damage to your organization or your customer.
Traditional identity verification products draw on publicly available, commodity data and offer no visibility of the information bad actors have access to on the criminal underground. They query on basic information such as name, address, phone, identity credentials (national ID – such as social security number, drivers license ID, etc.,) device ID, and sometimes behavioral biometrics. However, these tools lack true insights into the probability that the account or identity has been by a criminal, or was created with fabricated or stolen data.
Darknet data-enriched analytics solutions add a new dimension to fraud detection and prevention by providing extremely valuable contextual information for the risk models that serve to protect victims from attacks. With more detailed information about users’ risk exposure, including their prevalence of password reuse, recency and type of breach exposure, and appearances in botnet logs indicating malware infections, organizations can make more confident fraud decisions when trying to differentiate between legitimate customers and opportunistic fraudsters.
“Given the rising tide of fraud losses and the expansion of related threat vectors, fraud prevention professionals understand the need for and benefits of [dark web] intelligence as another tool in the fight against financial crime.”
– Top 10 Trends in Fraud & AML, 2023, Aite-Novarica
Level the playing field against bad actors. Here's how recaptured data from the criminal underground can protect your customers - and your bottom line:
Use recaptured identity data and analytics to make better fraud decisions based on consumers’ risk of ATO, synthetic identities, and fraud tied to malware
Identify compromised credentials and reset them to reduce the risk of online fraud, prevent ATO, and reduce fraud losses
Prevent users from creating accounts with previously exposed credentials that make them easy targets for credential stuffing attacks
Identify and invalidate recaptured malware-stolen cookies that can be used to impersonate your users
Bolster fraud investigations with the ability to attribute crimes to specific individuals and crime groups
Receive insights into your customer base’s security hygiene, alerting to users with high password reuse rates
Assess risk for users without an account or any historical data at vulnerable points, such as guest checkout, by querying as little as an email address for phone number
Fight Back Against Fraudsters
With SpyCloud, you get enterprise-level online fraud prevention solutions powered by the most up-to-date and actionable recaptured data from the dark web.
By using this intelligence to better know your customers, you can predict user risk, prevent account takeover, and mitigate fraud from malware-infected devices. This enables you to manage each customer’s experience with the appropriate journey, avoiding process interruptions, more closely monitoring certain interactions when necessary, and making fraud decisions upfront to create a more seamless overall interaction.
SpyCloud Identity Risk Engine
Provides actionable, predictive fraud risk assessments based on your consumers’ recaptured darknet data. Includes powerful metadata like recency of breach exposure, password hygiene, anomalies within a user’s information, and more, so you can identify high risks of ATO and synthetic identities and minimize tedious manual reviews.
SpyCloud Consumer ATO Prevention
Helps organizations prevent fraudulent account creation using previously exposed credentials, and alerts the organization as soon as their consumers’ exposed data appears in the criminal underground — allowing them to reset passwords before criminals have a chance to use them.
SpyCloud Session Identity Protection
Uses recaptured malware data to alert enterprises when consumers’ web sessions and device cookies have been exposed so they can react appropriately to prevent session hijacking. Enterprises use this data to invalidate active sessions and block bad actors from using antidetect browsers to bypass login and impersonate users.
SpyCloud is the only provider using recaptured data from the criminal underground to help prevent fraud without adding undue customer friction. With SpyCloud, businesses can lower their fraud losses, manual reviews, and risk from synthetic identities.
SpyCloud offers the largest collection of recaptured darknet data in the world, combined with analytic capabilities that help businesses quickly identify and react to fraud risks. Our proprietary engine quickly ingests darknet data, then cleanses, enriches and analyzes it to make it actionable. Our customers get alerts on vulnerable accounts, exposed passwords, and compromised cookies so they can act before criminals take advantage.
In today’s threat landscape, backups alone are not effective to recover from a ransomware attack. Neither is endpoint protection in a remote work world where employees are accessing corporate applications from personal devices outside of your control. A layered defense focused on credential management is required – one in which proactive monitoring and remediation of compromised credentials and malware-infected devices is considered essential.
Global Financial Services Provider
Mobile Ecommerce Marketplace
Top 10 Online Travel
We could have avoided manual review for 76% of the orders we tested with Identity Risk Engine.
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On-Demand Webinar: Experts from Aite-Novarica and SpyCloud discuss the latest trends in fraud and what organizations can do to protect themselves while balancing losses and the customer experience.