The 3 Biggest Web Fraud Tools In A Fraudster’s’ Arsenal

By Pete Rizzo (@pete_rizzo_)

Global card fraud increased 14 percent in 2012 to reach $11.27 billion, according to a recent study by The Nilson Report. But, perhaps more notable was the study’s finding that it is online purchases that are increasingly becoming the principal target of this fraud.

Further research suggests that as much as 40 percent of U.S. fraud occurs over digital and mobile channels, a problem worsened as merchants shy away from implementing solutions for fear of introducing friction and offline fraud safeguards become more effective.

While this trends no doubt contribute to global fraud problems, there’s another key driver – the continued innovation of fraudsters seeking to break into online applications and trick legitimate online customers. This danger was the subject of a newly issued ThreatMetrix white paper that illuminated the current arsenal at the disposal of fraudsters.

The most effective tool, the report suggested, is technology that masks fraudsters’ true location and computer characteristics. While fraudsters previously relied on proxies to hide their IP addresses, today they are using new strategies that make their crimes more difficult to detect.

What are three of the biggest tools that help fraudsters execute their fraudulent activities, hide their online activity and steal the credentials they need to steal billions each year? Here are the top answers according to ThreatMetrix’s latest report:

1. VPN Servers
– The use of VPN servers to hide the network and location of fraudsters’ machines is a major headache for fraud analysts and security researchers, according to ThreatMetrix.

VPN routing lets fraudsters hide the origin of their network traffic, making it impossible for analysts to detect this fraud technique. The inability to detect phishing attacks makes it impossible to react until after a compromised account has been used.

2. … What are the other new methods fraudsters and hackers are using to mask their location and identity, and what patented technology is ThreatMetrix preparing to detect VPN servers?

To reveal more top threats to online payments security and potential solutions, download ThreatMetrix’s “Protecting Against Advances in Web Fraud: Uncovering Fraudsters Tracks and Keeping Online Users Secure” here.