The gaming world is constantly growing, with 2.95 billion people regularly playing online games in 2022, showing a steady growth of 5.6% year-on-year. The number is expected to grow even more in 2023, with predictions of 3.07 billion people regularly enjoying the world of gaming. While the number of hours played differs from player to player, most admit to playing video games for at least an hour a day, bringing the average gaming hours to 7.6 hours per week. They use this time to relax, forget about their worries, blow off some steam, socialize and even build friendships with people they otherwise might never meet. Gaming improves our wellness and provides comfort for so many people around the world, but at the same time, it can pose a danger to them and gaming companies.
The truth is that fraudsters and cybercriminals constantly try to find new potential victims, and the iGaming industry gives them the opportunity to access a vast pool of targets. While fraud and cybercrime will always present a danger for any business that is accessible from the Internet, there are ways to recognize the red flags and stop them before they can do any damage to your business.
What are the most common types of fraud affecting the iGaming industry?
The truth is that there’s no industry that is immune to fraud. As long as there is a way for fraudsters to gain benefits from exploiting your business, they will try to find it. For example, gaming giant Electronic Arts (EA) was attacked in 2021 when hackers stole 780 GB of data in game source code and relevant internal tools, which they tried to sell on the black market. To prevent this from happening, it is essential that iGaming companies weed out the malicious actors before they can cause any damage while ensuring that this process doesn’t impact the experience of loyal and legitimate customers.
Familiarizing yourself with the most common types of fraud affecting the world of online gaming will allow you to develop defense strategies that can stop them without ruining the gaming experience for the rest of the customers.
Credit card fraud
Credit card fraud is happening in all online businesses, including iGaming. It occurs when fraudsters use fraudulent or stolen credit card details for their malicious purposes. In gaming, credit card fraud usually happens when fraudsters either open a new account or take over a legitimate one and use stolen credentials to upgrade the account, buy limited edition items and then sell the account. While they pocket the money, the iGaming company will be left dealing with financial damages when legitimate card owners discover their data was stolen and request a chargeback.
Multiple account fraud
Multiple account fraud happens when a fraudster opens numerous accounts at once to try to get ahead in the game and make a profit. They can use those different accounts to turn the game in their direction and reap the benefits while ruining the experience for legitimate players. For example, a gaming company often tries to entice people to sign up for their services by offering some limited edition items. Fraudsters will exploit this offer by opening multiple accounts to gain the item and sell it for a high price to legitimate players. They will try using different devices or IP addresses for various accounts to avoid detection.
New account fraud
New account fraud happens when fraudsters use stolen or synthetic identities to open a new account with the sole intention of committing fraud. This type of fraud is often in any industry that deals with money, especially banks and credit unions. For example, a Canadian man racked up $5 million in damages by committing new account fraud and opening nearly 600 fraudulent bank accounts in 22 major banks, racking up $5 million in damages. In gaming, fraudsters can use these new accounts for bonus abuse, stealing in-game assets, exploiting other gamers, or making fraudulent purchases that eventually end up with chargeback requests.
How to recognize red flags during the sign-up process?
To prevent fraudulent activities from affecting your business, you need to start taking steps in the right direction. The best way to do so is by stopping fraudsters before they can do any damage, and that is easiest to do during the sign-up process. By recognizing the red flags indicating suspicious behavior, you will be able to block those users before they can gain access to your system, protect your business and ensure legitimate players enjoy the experience.
Keep an eye on this suspicious activity:
- The IP address doesn’t match provided address
- A user logging in from an unusual location
- The name user provided doesn’t match the one on the ID they provided
- The address they provided differs front the one on the ID they provided
- The user tried using multiple invalid cards
- Lack of digital footprint
- Newly created email
- The same IP address being used when creating multiple accounts
- Same credit card details provided for various accounts
Of course, not all of these activities indicate that you are dealing with fraudsters, as some can be honest mistakes made by legitimate users. Every company needs to determine for itself the risk levels they are willing to accept and which steps to take after detecting red flags. Based on those decisions, they can create the security strategy that is best suited for their business. For example, you can either completely block the user showing some red flags, or you can give them the benefit of the doubt and ask them to provide additional details that can prove they are who they claim to be. To ensure you make an informed decision about their risk factor, you should collect as much information about your users as possible.
Conclusion
The gaming industry provides needed relaxation and comfort for many people, which is why it is so popular. But the fact it provides its services to so many people is precisely what puts it in danger of becoming a victim of fraudulent activities. Determining who are malicious actors among over 3 billion users is a challenging task, but, luckily, it is not an impossible one. With proper knowledge, the correct data, and effective security tools, you can recognize fraudulent attempts and prevent them before they can damage your business.
