According to the Arkose Labs Q4 2020 Fraud and Abuse Report, the Arkose Labs network witnessed a significant spike in the attacks originating from Europe in Q3 2020, which accounted for almost half the attacks. Russia alone accounted for 493 million automated attacks.
During the same period in 2019, the Philippines was the top attack originator and a leading fraud hub. However, in Q3 of 2020, the Philippines did not even feature among the top ten, whereas many well-established economies in Europe featured. This explosion in the attacks from Europe may be attributed to the economic turmoil and shrinking GDPs due to the coronavirus pandemic. The economies of the United Kingdom, France, Italy and Germany, for example, suffered a 10% or more reduction in GDP, which could account for the surge in the number of fraud attacks.
Jobless people are willingly taking up fraud to make ends meet
According to the International Labour Organization (ILO), the global labor income has declined by nearly 10.7%—amounting to $3.5 trillion—in the first three quarters of 2020, when compared with the same period in 2019.
As face-to-face interactions will likely remain restricted due to the pandemic in the foreseeable future, people will turn to digital in order to search for new avenues of making money. Economic uncertainty and the drop in global working hours are steering many people towards fraud. They are willingly taking up fraud as a vocation in order to make ends meet. This is making it easier for fraudsters to take advantage of vulnerable people and 'recruit' them for criminal activities. This also underscores the interconnected nature of the global fraud ecosystem, where fraud rings can quickly respond to the rapidly changing socio-economic circumstances and recruit new participants in a new fraud hub to scale up attacks.
Most human-driven attacks originated from Europe in Q3 2020
Low-cost human labor, or sweatshops, is an important part of the organized fraud ecosystem, to help carry out attacks at scale and circumvent defenses that aim to defend against bot attacks. As mentioned before, traditionally developing countries have been the fraud hubs with predominant sweatshop activity. However, in Q3 2020, the bulk of human-driven attacks originated from Europe with a whopping 64% of attacks, largely emanating from Russia and the United Kingdom.
The other emerging fraud hubs included the US, the United Kingdom, and the Netherlands—some of the most developed economies of the world—along with the established fraud locations such as the Philippines and Thailand.
Users' behavioral patterns will change
As people continue to rely on digital channels for various activities, fraudsters will attempt to steal money and hide amongst this increased digital traffic. Since fraudsters are in the business of making money, they will continue using bots, automated scripts, and human sweatshops to launch strategic and complex attacks. Once the economies—in the European countries and the rest of the world—begin to recover, fraudsters will look for ways to cleanse the laundered money.
As a result, the volume and sophistication of fraud attacks will rise, which will further disrupt the users' behavioral patterns. Therefore, fraud teams will no longer be able to rely on traditional fraud defenses. They will need a fresh approach to fraud prevention that can help them tackle the growing volumes of traffic and the ensuing fraud while offering a seamless user experienceto the authentic users.
Adopt a long-term fraud defense approach
Arkose Labs' zero tolerance to fraud approach is enabling digital businesses, in Europe and across the globe, to detect and stop fraud even with an ever-increasing influx of new users. Instead of blocking users, the Arkose Bot Manager platform allows them to prove their authenticity by completing a 3D puzzle. The dynamic risk engine analyzes hundreds of digital parameters to assess the risk associated with each user. It then informs the challenge-response mechanism, which presents dynamic Arkose MatchKey challenges to risky users. Using targeted friction, the platform bankrupts the business model of fraud and provides long-term protection to businesses.
To learn how Arkose Labs helps businesses deflect fraud and online abuse, irrespective of the fraud hub the attacks originate from, please schedule a demo now.
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