April 17, 2024

Methods for accurately detecting fraud using VPNs and proxies

  1. VPNs and proxies: How scammers use them to trick users and your business

Fraudsters can conduct fraud without being discovered by hiding their genuine location, and IP address, and several tries using dubious VPNs and proxies. In this context, hacked devices belonging to ‘clean’ internet users who are unaware that their equipment is being utilized for nefarious activity are popularly referred to as residential proxies. Fraudsters conceal their genuine identities and locations behind the victim’s device, a tactic made possible by businesses that provide a wide variety of proxies and VPNs.

Do check this: fraud detection online

  1. Distinctions among different proxy services

Proxy services fall into four main categories that are frequently utilized in fraud and those are as follows:

  • The simplest kind of proxies are data center proxies. They are not associated with any Internet service provider (ISP) and are commercially issued to servers. They have a significant chance of being blacklisted since they are shared by many people and are frequently recognized as having a high bot potential.
  • ISPs are the ones who assign residential proxies. Since they mirror human IPs, they are helpful to fraudsters since they reduce the likelihood of being reported.
  • A cross between home and datacenter proxies is Static home Proxies. For jobs that need sustaining extended sessions and getting around captcha or anti-bot systems, these proxies are advised.
  • Mobile service providers provide mobile proxies. Since they are dynamically assigned to users within a cell tower’s range, they are not attached to a specific user and have a minimal chance of being banned.
  1. Use cases of VPNs and proxies in fraud

VPNs and proxies are frequently used by scammers to conceal their geolocation while committing different kinds of fraud. From this, increasingly sophisticated forms of fraud emerge, including account takeovers, fraudulent account openings, payment fraud, and even more specialized ones like web scraping, account farming, manipulating prices or inventories, and noncompliance with regulations. Let’s examine the most well-known ones.

  • Account Takeover
  • Account Opening Fraud
  • Payment Fraud
  • Web Scraping
  • Bot Attacks
  1. VPNs and proxies that blend in: a battle against fraud

With the use of network anonymization techniques like VPNs, home proxies, or TOR, dishonest users can mimic connections from many network contexts and places. It is challenging to combat fraud using only lists of permitted or prohibited connections due to the frequent changes in service addresses. Accurate real-time identification of such situations, including those utilizing novel and obscure anonymization strategies, is made possible by proactive detection approaches such as detecting these network anonymization techniques based on behavioral patterns.

  1. Proper use of VPN and proxy detection

In summary, even if new threats originate from previously unidentified sources, you can maintain a high degree of security for your platform against them and remain ahead of growing dangers. One of the many threats Nethone identifies is the use of VPNs and proxy detection.