One of the world’s most popular video game developers was losing $1 million per month to international revenue share fraud (IRSF), also known as SMS Toll Fraud. These attacks targeted the company’s registration process, allowing fraudsters to exploit a weakness in the SMS validation process and profit from the resulting SMS toll charges. To protect against this type of attack and improve their bottom line, the customer implemented Arkose Labs in front of the section of the flow where a user validates via SMS. They experienced an immediate reduction in financial losses.
The Business Problem
As the video game developer gained popularity, it became a target for frequent and significant attacks at registration. To prevent unauthorized access to its online platform, the customer implemented one-time passwords (OTPs) sent via SMS or email to verify user identities during registration. Attackers specifically targeted the platform to exploit OTPs during registration, a tactic known as IRSF, or SMS Toll Fraud.
IRSF occurs when attackers hijack multi-factor authentication (MFA) at login or registration for financial gain. In this case, fraudsters used bots to automate attacks on digital touchpoints, such as account registrations, to trigger OTPs to premium numbers, earning a per-message payout of $0.01 or more. These volumetric attacks resulted in significant costs for the video game developer, totaling $1 million per month in SMS charges from fraudulent verifications. The company needed a solution that not only prevented fake account signups, but also significantly reduced SMS fraud on the platform to save costs and achieve a material return on investment.
The Arkose Labs Solution
Arkose Labs addresses IRSF/SMS Toll Fraud and user authentication with the goal of removing the financial motivation for fraudsters and producing a material return on investment for businesses. The video game developer implemented Arkose Labs at all touchpoints protected by OTPs in its account registration process to detect fraudulent traffic.
To protect against SMS Toll Fraud and its associated losses, Arkose Labs deployed various data points related to device, network, behavior, and location to identify suspicious traffic. This included preventing script attacks, which are critical for fraudsters to profit, and using data from past attacks in the Arkose Labs Global Network™, as well as custom “telltales” tailored to the video game developer’s specific needs. The solution determines whether further screening is necessary based on the likelihood that traffic is legitimate, bot-generated, or maliciously generated by a human.
By implementing Arkose Labs, the video game developer saw a significant reduction in fraudulent SMS charges, saving over $1 million per month. Arkose Labs also reduced infrastructure costs by removing a large volume of malicious bot traffic. Arkose Labs helped the customer detect fake account sign-ups and eliminate persistent attacks on user touchpoints that trigger OTP verifications.
With Arkose Labs’ approach, the customer saw downstream benefits such as reducing support time managing compromised accounts, decreasing fraud case management for payment teams, lowering disruption rates for new customers, and reducing infrastructure costs. These cost savings, along with protection against IRSF, resulted in a material return on investment for the company. Arkose Labs also improved the user experience by providing a secure and near frictionless registration process.
Now your business can estimate the cost savings associated with stopping SMS Toll Fraud, also known as IRSF.
SMS Toll Fraud (IRSF) is a type of cybercrime in which hackers use stolen accounts/numbers to send large volumes of SMS messages to premium rate numbers, resulting in significant charges for the account owner. IRSF can disrupt business operations, damage a company's reputation, and lead to major financial losses, as well as a diminished ROI.
Quickly and easily estimate the potential cost savings associated with stopping SMS toll fraud, to make better decisions about cybersecurity strategies for the new year.
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