How to Avoid Account Creation Fraud

When bad actors open fake accounts, they can use them for any number of purposes—from spamming friends to abusing loyalty points and rewards programs. This can have a direct impact on the profitability of your company.

What happens if you create a fake account?

To avoid account creation fraud, companies need to rely on a variety of techniques, including passive liveness detection and analyzing the actions that happen after an account is created. This approach can be particularly effective when combined with other tools that analyze background data on a new user and assess their identity and risk.

Detecting and mitigating fraud during account creation can be difficult, especially as attackers continue to develop tools to evade detection. For example, they can easily spoof disposable email detection by using free email verification services or a VPN to mask their IP address.

In many cases, a new user will be asked to verify their identity digitally, or provide a selfie. This is an excellent way to spot fraudsters who are trying to create multiple accounts with the same information (e.g., their name and email address) or are trying to impersonate a real person.

This method also helps to catch fraudsters who are using bots to open accounts at scale. While these bots are easier to identify than a bad actor who opens an account manually, they can still pose significant threats by exploiting the trust of your users and attacking other systems through dead or inactive accounts.