Top 5 Common Types of Enterprise Fraud and How to Manage Them:

Online fraud has been a plague for large-scale organizations impacts their financial stability, operational integrity, and brand reputation. The severity of threats to organization’s data that these online frauds possess is no longer a distant concern but an immediate issue that requires proactive measures. Among such measures, the most effective is enterprise fraud management.

What is Enterprise Fraud Management?

Enterprise Fraud Management (or EFM) is a set of procedures used by large-scale organizations to tackle internal as well as external fraud. These solutions serve as a first list of defense against fraud, as they provide fraud identification and mitigation by seamlessly integrating with enterprise-level systems.

Here is a list of the top 5 Enterprise Fraud:

1. Account Takeover (ATO)

2. Fake Accounts From Stolen and Synthetic IDs

3. Bonus, Promo, and Referral Abuse

4. Payment Fraud and Chargeback

5. Ad Fraud

Let's dive into the details of each and how enterprise fraud management can effectively address and mitigate these five types of fraud.

Account Takeover (ATO)

An account on any digital platform is valuable as it contains the user’s personal information. This makes the accounts a target for fraudsters since they are always on the lookout for such personal details to extract passwords, banking details, and IDs

How to manage: An organization’s priority while tackling account takeover is to differentiate between good and bad users (devices) with device fingerprinting. A unique Device ID is assigned to every device that visitors use to access the platform. Now any abrupt changes to these devices will reflect attempts of account takeover. Some of the account takeover identifiers include:

• login from unusual locations,

• multiple failed login attempts,

• unusual login times,

• sudden changes in account details,

• unusual transactions,

• increased password resets.

Fake Accounts From Stolen and Synthetic IDs

Dealing with fake accounts is a common challenge faced by every enterprise-level organization. Fraudsters create fake accounts from stolen and synthetic IDs for phishing, spam malicious content, and even commit financial fraud.

How to Manage: Risk intelligence is the best fraud management technique to tackle such fake accounts. It proactively detects fraudulent activities and notifies users in case of any red flags such as:

• Inconsistent or incomplete profile information

• Unusual or suspicious email addresses

• Abnormal login patterns or activity

• Multiple accounts from the same IP address (or device)

• Discrepancies in personal details across different platforms

• High frequency of profile updates or changes

Upon identification, organizations can further investigate and block such fake profiles (and associated devices) to secure the genuine user’s account & PII.

Multi Accounting for Bonus, Promo, and Referral Abuse

There is an alternate side to implementing referral and promotional bonuses on an app, and that is to attract fraudsters to the platform. Fraudsters create a network of fake accounts to exploit such promotional offers, often leading to substantial financial losses for businesses and unfair advantages for themselves.

How to manage: The best way to manage such multi-accounting is to know when your promo codes and referral codes are:

1. Being abused by the same device

2. Being abused by devices associated with malicious apps & tools

You can get both of these details with device fingerprinting.

Note: Fraudsters are smart, and they perform advanced manipulation to mask themselves. So organizations must prefer fraud management tools with persistent device fingerprinting. Tools that are ultra-resilient against factory resets and advanced tampering.

Payment Fraud and Chargeback

Fraudsters use stolen credit card details to exploit transactions by forcing costly chargebacks, which is a financial burden for businesses. Such chargebacks are accompanied by reasons like a customer changing her/his mind or protesting company policies. This emerging type of fraud is a great concern within enterprise fraud management for organizations.

How to Manage: Here are a few things that one need to keep an eye on to overcome Ad fraud:

• Detection of multiple payment credentials on the same device

• Identification of devices with the availability of fraudulent tools/applications

• AI-based data transaction monitoring and analysis for every successful transaction

The last fraud on our list of most common enterprise fraud is.

Ad Fraud

Getting clicks on ads but not getting genuine traffic or experiencing misleading traffic is something that every enterprise-level organization faces now and then. Fraudsters (generally imposed by your competitors) generate fake clicks on ads to drain advertising budgets. Malicious software can be used to insert unauthorized ads into an app or website to degrade the user experience and brand reputation.

How to Manage:

Ad fraud detection tools are essential for enterprise fraud management, providing the most effective means to combat and prevent ad fraud.

Using the ad fraud detection tools, there are two things that you need to gain visibility for:

• Any fraud tools harming your campaign in real-time

• The legitimacy of traffic sources and detecting bot activity

Conclusion:

As the complexity of enterprise-level fraud evolves, it's crucial for organizations to stay ahead with effective strategies. If you need help understanding or implementing effective fraud solutions, don’t hesitate to reach out and schedule a discussion with our experts. We're here to support you every step of the way toward successful enterprise fraud management.