Account signup fraud is a huge problem for businesses. It can cost companies a lot of money and cause reputational damage, while customers risk their personal information being stolen by cybercriminals.
New account creation attacks have been on the rise for several years, and they will continue to be so in 2023 — especially since cheap and sophisticated hacking tools allow attackers to bypass secure account creation systems. As a result, it’s important for businesses to understand how account creation fraud works and how to prevent it from happening.
Account Signup Fraud: How to Detect and Prevent Fraudulent Account Creation on Your Platform
The easiest way to spot this type of attack is by looking at the behavior of users during and after they create an account. For example, if they take longer than expected to answer a question, or they fill in fields that only humans can see (like honeypot fields), this could indicate that they’re not a legitimate user.
Another way to identify account creation fraud is by analyzing the data you have on existing accounts. Look for patterns of unusual behavior, such as a spike in new registrations in a short amount of time.
A common pattern is a large number of accounts with the same IP address, similar selfies taken during verification, and other indicators. These types of identifying signals can help you pinpoint fraud rings that may be hiding behind botnets or other proxies.
This is an area where there is a lot of innovation, and some new tools that are able to detect this type of fraud can help businesses stop it before it causes major problems. These tools can identify account creation fraud in multiple ways and provide real-time risk scoring to prioritize legitimate accounts, allowing you to protect your company from financial loss and customer harm.