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Complete Story
10/01/2019
Online Account Origination Fraud: When New Users Are Bad News
NuData Security
After a test with an eCommerce company, we found that a staggering 70% of their new accounts were fake. Incredulous at first, the company cross-checked our data with their own fraud team to finally agree with us. Only 30% of new accounts were legitimate. As the sad news sunk in, they added “our marketing team is going to be crushed, they thought their sign-up campaigns were killing it” – I guess, in a sense, they were.
Online account origination fraud affects every industry; financial institution, digital goods, gaming, healthcare – and also marketing. Many companies are aware of the damage of fake accounts in their environment, but there is still uncertainty across the industry on how this fraud affects their bottom line. Some companies will see chargeback spikes but miss the potential link to account creation. However, if we have learned something after over a decade of stopping bad actors, is that fraudsters don’t spend resources if they don’t have a large payday waiting on the other side. These dark workers retire in their forties, that should tell you how much money they make off you.
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