Automated Fraud

Article Contents

    Automated fraud: How it works and how to prevent it

    Online fraud is a widespread problem. Automated fraud attacks like phishing, card cracking, and account takeover are now pervasive, with businesses and individuals alike being subject to regular attempts to defraud them online. As a result, it’s important to have vigilant fraud prevention measures in place that detect and minimize suspicious activity.

    So how does automated fraud work — and which fraud detection processes do you need to put in place?

    What is automated fraud and how does it work?

    Automated fraud happens when cybercriminals create programs that can steal and use personal data automatically, without the need for human intervention. Data is usually stolen for identity theft or financial gain. There are many different types of automated fraud, including:

    Hackers and cybercriminals create programs called bots, which are designed to commit online fraud. Bots exploit website vulnerabilities and user concerns to steal valuable personal data, which they can then use to defraud the legitimate data owner.

    How automated fraud affects businesses and customers

    More than nine out of ten people worry about increasing levels of fraud risk in their day-to-day lives. Fraud and identity theft can cause serious anxiety, as well as financial problems, should payment details be stolen or compromised.

    Online banking and digital payments are huge targets for fraudsters — but really they can steal identifiable information from almost any website. Retail, telecoms, travel, and banking businesses are often targeted by increasingly sophisticated fraud schemes. If they’re successful, these attacks can cost businesses millions in fines and lost sales — so it’s crucial to protect your company against automated fraud.

    How to protect your business against automated fraud

    Protecting your business online isn’t always easy. As fraudulent attacks become more advanced, it’s increasingly easy to fall prey to scammers. So it’s important to put equally sophisticated systems in place that can effectively protect your business and customers against fraudulent activity.

    One of the most important things to do is to educate your staff about the risks of automated fraud, and how it can happen. This includes raising awareness of how common business fraud attacks like phishing and whaling work so that employees can flag any suspicious activity in their emails or on their mobile devices.

    You also need to put specific security software in place to protect your online assets, including emails, websites, mobile devices, APIs, and web applications.

    How to prevent email fraud

    Phishing and whaling attacks are attempts to trick email recipients into revealing personal information or payment details. These kinds of attacks are often found in spam emails, which can lead to a compromised server, network, mobile number, or mobile device — so it’s important to implement anti-spam techniques, such as:

    How to prevent website fraud

    Fraudsters use malicious automated bots to harvest data from your website or API, which they can then use to defraud people or businesses. If you don’t have the right protection in place, these bots can steal and use personal information and payment details.

    Most websites use a web application firewall (WAF) to protect their site from security breaches — but this technology can’t quite keep up with bot threats. WAFs rely on human administrators to update their rules regularly, so they can detect and block as many bad bots as possible. However, bot developers are consistently creating more evasive bots that can sneak past WAFs with ease.

    As online fraud becomes more advanced, you need an automated fraud detection solution that can mitigate against sophisticated volumetric attacks. 

    What is automated fraud detection?

    Automated fraud detection systems are designed to highlight the risk of fraudulent activity. This allows you to put measures in place to control and halt suspicious transactions and automated threats.

    Some businesses use enterprise resource planning software and business intelligence tools for fraud management. While these systems can help with risk assessment, and offer some insights into your fraud data, they don’t actually block the bots that cause automated fraud. They can also create false positives, which prevent your customers from making legitimate transactions.

    For the best automated fraud protection, you need a dedicated bot management system that learns about even the most sophisticated attacks, so it can block them automatically before they affect your site.

    Is automated fraud detection reliable?

    Using a bot management system is a secure, reliable way to protect your business against automated fraud attacks such as ATO, card cracking, and loyalty point fraud.

    Netacea’s bot management system offers three layers of security:

    1. Active threat database — which stores and updates information about bots in real-time, so your system is protected against all kinds of threats
    2. Intent Analytics™ — which uses machine learning to analyze site visitors and determine whether or not they’re human
    3. Bot experts — our experienced human threat analysts monitor attacks and make decisions as needed.

    Netacea’s system also comes with detailed dashboards and analytics, so you can easily see which threats are regularly targeting your business. This is designed to help you manage and mitigate the risk of future attacks.

    Learn more about automated fraud detection in your industry

    Thanks to the growing number of electronic payments being made, automated fraud is becoming more widespread. It particularly affects retailers, financial services, travel brands, and telecommunications companies. Learn how you can protect your business — and your customers — from automated fraud in your industry:

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