What Is Account Creation Fraud and How Can You Stop It?
Did you know that law enforcement can arrest you for a cybercrime you didn’t commit? That could happen if a cybercriminal creates a fake account with your identity and executes illegal activities with it.
This is known as account creation fraud, and anyone can be a victim. Understanding how it works and how to prevent it can save you from trouble.
What Is Account Creation Fraud?
Account creation fraud is a process where cybercriminals create fake accounts on websites, applications, and other online platforms for malicious acts. They create these accounts with other people’s identities and false information. When criminals use other people’s identities, they implicate innocent people in crimes.
How Does Account Creation Fraud Work?
Account creation fraud happens in different ways depending on the platform. Various applications require different degrees of information to create accounts. For instance, an email is sufficient to sign up on online forums, so fraudsters only have to provide an email address.
In contrast, the requirement is a bit high in e-commerce sites. Users need to provide other information such as their gender and phone number, in addition to their email addresses. Financial platforms require a lot more information from users who want to create an account. Attackers go overboard to provide this information to meet their requirements.
Regardless of the platform, people resort to a similar toolkit to create fake accounts for fraudulent activities.
Identity Theft
A cybercriminaluses the identity of someone elseto create an account on a platform instead of using theirs. The stolen identity is that of a real person, so the information they provide is accurate. The owner of the information is unaware of what’s going on, and they become a victim since the attacker’s crimes can be traced to them when things blow up.
Synthetic Identity
Synthetic identity is the combination of real and fake information to create an account for fraudulent activities. If the platform requires users to present an ID, the attacker uses someone else’s ID and name, but enters their own email address and phone number for correspondence.
If the platform has an authentication requirement via email or phone, the threat actor won’t have a problem because they can access the email and phone number registered to the account.
Automated Accounts
Cybercriminals use bots to create multiple fake accounts for illegal activities. There are tons of botnet services on the market for this purpose. They are most effective for platforms that don’t require much personal information or verify users’ identities.
Creating fake accounts with bots is very fast, as in you’re able to have hundreds of accounts in minutes. They are most fitting for attacks that require a high number of fake accounts.
How Can You Detect Account Creation Fraud?
Account creation frauds are prevalent. You may have several fake accounts on your network and not have a clue. Here’s how to detect them.
Verify Account Details
The assumption that all information users provide when opening accounts on an application is correct is one of the reasons account creation fraud prevails. Always crosscheck user details before confirming their membership.
There are third-party vendors with the software and expertise to determine the credibility of user information by assessing every detail. They have access to public records and other resources where people store information.
Look Out for Suspicious Behavior
An online user’s behavioral patterns indicate their motives. It’s standard practice for each person to have a single account on a network. If someone tries to open multiple accounts on your system via the same device, that’s a clue that something is off. Why do they need additional accounts when they already have one?
Assess Network Attributes
Hackers use various technical means to cover up their tracks when launching attacks. A common one is hiding their Internet Protocol (IP) addresses and other network attributes with a virtual private network (VPN) so people can’t trace an attack back to them.
If you are keen on preventing account creation fraud, you must monitor all devices on your network. Blacklist hidden networks, so only the visible ones can have access. Having complete visibility of the traffic components in your system enables you to manage your security and contain incidents that may arise.
How Can You Prevent Account Creation Fraud?
Account creation fraud is getting more popular by the day. Cybercriminals have become better at retrieving people’s personal information, and they use it to create fake accounts. The real owners of the information are usually unaware until they are implicated. You can help contain this worrisome trend with the following measures.
Secure Personal Information
Account creation fraud is a secondary cyberattack, since it stems from cybercriminals being able to retrieve other people’s personal information. If they weren’t successful in a previous attack to access users’ data, they couldn’t create fake accounts with their credentials.
Securing your personal information closes one window for account creation fraud. There are various cybersecurity practices you can cultivate to prevent sensitive data exposure. Top on the list isthe use of strong passwords. Create complex passwords that threat actors can’t guess right. Encrypt your data so it’suseless to intruders even if they retrieve it.
If you maintain an application or account, secure its attack surfaces with effective access controls. Implementa zero-trust policy checking all users regardless of who they are.
Conduct Risk-Based Authentication
Risk-based assessment (RBA) is evaluating the risk tendencies of a user requesting access to your system in real time. It’s an automated process of scanning the user’s attributes such as their IP address, physical location, and devices, and running the information against established security parameters.
The risk-based authentication system generates the user’s risk profile at the end of the assessment. People with high-risk scores fail the assessment and aren’t allowed access. There’s a tendency for threat actors to fail considering their online history.
Deploy Targeted Friction With Artificial Intelligence
Taking extreme measures to stop account creation fraud may affect legitimate users. An effective way to handle the problem is to implement targeted friction.
Attackers use bots to create fake accounts. Cybersecurity professionals understand the behavioral patterns of these bots and know how to contain them. Threat actors have raised the bar by using bots trained with machine learning to act like humans. They can bypass security checks designed for them.
Implementing advanced AI tools that recognize the thin line between human behavior and human-like behavior minimizes the use of bots in creating fake accounts without blocking genuine visitors from your application.
Say No to Account Creation Fraud
Account creation fraud is like a double-edged sword; it affects both the owner of the stolen identity and the owner of the application they execute the crime on.
Being more intentional about the security of your personal information prevents it from getting into the wrong hands. There’s no limit to what they can do with it, and the repercussions are never good.
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