Use With Caution- User Generated fraud in mobile apps

When talking about fraudulent actions taking place online and specifically in apps, it’s usually a very specific direction that is being addressed- usually fraudulent apps scamming either advertisers or users by using some type of improper method of promotion or planting malware of some kind.

However fraudulent apps or publishers are merely a small percentage of an industry filled with legitimate apps with no intentions of any type of fraudulent activity. While these are not attempting to commit fraud, that doesn’t mean that they’re not subjected to fraudulent activity. The most common case currently harming legitimate apps is known as app spoofing, where fraudulent publishers and apps are pretending to sell traffic from legitimate apps and is discussed in depth in this article.

Another, less discussed, issue is the case of fraud being conducted by the app’s users. More relevant to some app types than others, this issue still remains an unsolved mystery and is as difficult to treat as it is to identify. Apps from the gaming, eCommerce and even dating verticals all offer different incentives, rewards and benefits to their users as part of their attempt to make each user more valuable and increase its lifetime value. Legitimate means such as extra currency for ad views, coupons and unlocking of features are all fair game as long as users don’t manipulate them.

However, similar to the cases of app fraud, fraud from users may take a small percentage of the app user’s population but can cause quite a lot of damage. We’re at a point in time when users are savvier than before, they understand how app creators view them and what they’re after, and are willing to take actions that will make this transaction lean more in their favor.

Whether we’re talking about users switching their app ID’s, changing their locations using different VPN tools or any other type of fiddling with their meta data to make them appear differently in the eyes of the app operator for benefits or special features, we’re talking about yet another level of fraud currently under the respective radar, however just as costly in potential.

As long as app developers will try to come up with ways to encourage their users to stay active and increase their value, there will be users- real or not- who will be out there to exploit these mechanisms, trying to take advantage of the situation and get as many of the perks as possible with minimal real value to the app- very similar to the motivation standing behind other fraud methods motivated by advertising revenue.

The most common cases for such fraud will usually happen in app verticals that rely heavily on rewards and/or benefit programs to keep their users active. Games, Customer clubs and coupon apps are most likely to suffer, however other verticals are likely to suffer from similar issues as their community grows and monetization methods come into play, basically increasing their risk as an outcome of their own success.

At the end of the day we’re talking about a major part of the funnel that is usually being overlooked or simply taken for granted in terms of fraud. App developers should look into their app’s economy and method of generating revenue vs the type of user’s they have and try to foresee where the loophole for user generated fraud could be. A method of staying on top of such an issue is utilizing a fraud prevention tool that simply doesn’t take such fraud cases for granted and one that can actually flag unusual behavior per devices and users that could potentially exploit the app.