Proxies are used by criminals to hide their activities online. They are often used in fraud to bypass the fraud detection measures of networks and advertisers. For example, proxies can be used to create duplicate accounts and bypass geographic filters on sites, engage in click fraud, ad fraud, lead generation funnels and more.
To evade detection, different types of fraud proxies use servers preloaded with VPNs to reroute traffic through rapidly changing IP addresses and mimic legitimate clicks. They also purchase residential proxies to fake other details such as network or device, such as making a headless browser from southeast Asia appear to be a mobile phone with a 5G connection in the US. This type of fraud wastes the advertising budget of networks and advertisers and is illegal.
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Residential proxies are the preferred choice of fraudsters because they are difficult to detect using traditional methods. They are a key part of the secrecy industry that allows sanctioned oligarchs, crime bosses and corrupt politicians to hide their assets by buying luxury properties in London’s most exclusive neighborhoods through offshore companies.
These proxies are also used by credit card fraudsters to commit friendly fraud (illegitimate chargeback disputes from real credit cards) in the months after a sale has taken place. This type of fraud is a major problem for networks and advertisers who can be reimbursed by the credit card company only after proving that the sale was fraudulent. The best defense against fraud involving residential proxies is to use proxy piercing tools that can identify a proxy and uncover the user’s true IP address.
