Fake accounts are the starting point for a variety of fraudulent activities including promo abuse, fraudulent purchases, phishing and gnoming. These activities hurt users and damage businesses’ reputation. They also cause unnecessary expenses, skewed marketing analytics and regulatory compliance issues.

Fraud prevention for fake accounts often uses fake or stolen identities to sign up for a service, such as an online dating site or a gaming platform, to take advantage of free trials, discounts or other perks. They may also exploit these accounts to spam other users or gain in-game items they can sell on the black market.

Fraud Prevention for Fake Accounts: Strengthen User Verification

To prevent new account fraud, businesses need to implement effective measures that include limiting IP address signups and requiring multiple verification methods to access an account. Additionally, detecting anomalous behavior in the process of creating an account – like repeated attempts to create accounts, or hesitation to fill out basic information – can signal the presence of a bot or synthetic identity.

The best approach is to implement a security solution that incorporates behavioral assessments and real time monitoring to detect suspicious activity on new accounts. This can include assessing the device’s fingerprint, analyzing the reputation of an email address or phone number, and looking for out-of-the-ordinary transactions that deviate from usual user patterns. Identifying emulators and other non-human ways of using a device can also help to weed out bad actors or automated bots. This is possible through the use of out-of-band verification requests, such as a one-time code sent to the account owner’s email or phone.