How Proxies Are Used For Fraud Online

Proxies are a popular tool for committing fraud online, as they help cybercriminals hide their identity and location. They can also be used to bypass common fraud prevention techniques such as CAPTCHA, device behavior analysis, and bot detection. Detecting proxy usage is difficult for merchants and websites, especially when the fraudster uses residential proxies that have a stealthier footprint. In this article, we’ll look at how proxies are used for fraud and the most common types of fraud that are committed through them.

How proxies are used for fraud online for many purposes, but the most common are click fraud and geolocation spoofing. By using multiple proxies, criminals can rapidly change their IP address and click on ads over and over to receive unearned income. They can also spoof their location to avoid merchants’ anti-fraud protections, as well as get around regional differences in fraud rates by pretending to be from countries with high fraud rates.

Using APIs for Effective Fraud Detection and Prevention

Proxies enable fraudsters to mask their identities and hide their locations by tunneling a connection between the computer and a web server. This enables them to engage in nefarious and abusive behaviors that can be difficult for security professionals to identify.

There are different kinds of proxies, with the most basic being transparent proxies that are easy to detect because they declare that a proxy is being used through their connection signatures. More advanced fraudsters will use stealthier types of proxies that are harder for businesses and online sites to detect. However, more sophisticated detection tools can “pierce” these connections to reveal the user’s real IP address and physical location.