Maximizing Fraud Protection Requires Understanding the Dark Web
Why Dark Web Intelligence Is Essential for Combating Modern Financial Fraud.
Fraud protection is a major concern among banks and credit card companies all over the world. Any institution that facilitates electronic financial transactions needs to be prepared to deal with fraud.
To do so effectively, their IT and security teams need to understand the dark web. They need to understand who populates the dark web, what happens in its spaces, and how its users leverage it to do what they do.
What Security Teams Are Dealing With
DarkOwl is the leading provider of dark web OSINT investigation tools and fraud protection services. They explain that fraudsters utilize dark web spaces and tools to defraud both financial institutions and consumers. Common scams include:
● Bank Drops – Bank drops are illicit financial transactions cybercriminals rely on to conceal the source of their funds. Whether it is phishing, ransomware, or credit card fraud, they rely on money mules to receive and transfer funds to hide their own tracks.
● Account Takeovers – Fraudsters use the dark web and its spaces to facilitate both account takeovers and fraudulent account creation. These types of crimes have continued to increase in recent years.
● Illicit Trading – The dark web is home to a large carding industry involving cyber criminals who buy and sell credit and debit card information. One cybercriminal will steal the information and then offer it for sale to others.
It goes without saying that security teams are often up against aggressive criminals who know all the tricks of their trade. Any security team unwilling or unable to fully grasp the scope of financial institution fraud is not going to be very effective at stopping fraudsters in their tracks.
How the Dark Web Helps
To someone who isn't familiar with the dark web, it is easy to assume that cybersecurity teams can keep up with fraudsters just by following them around online. But it's not as easy as it sounds. Think of it this way: cyber criminals prefer to use the dark web as their online home for a reason.
Plenty of things make the dark web attractive for fraudsters. At the top of the list is anonymity. The dark web offers a certain level of anonymity from the get-go. For example, the dark web relies on hidden networks like Tor (The Onion Router) and I2P (Invisible Internet Project) to keep things tucked away from people who don't have the skill or knowledge to find them.
These hidden networks rely on routing traffic through a complex network of nodes that ultimately obscure IP addresses and physical locations. Cybercriminals are also very adept at using tools like botnets and VPNs to hide what they are doing.
Plenty of Tools at Their Disposal
Cybercriminals thrive on the dark web because it is home to all the tools they need to ply their trade. Here are just three examples of those tools:
● Stolen Credentials – The fuel that drives financial institution fraud is the stolen credential. Anyone looking to rip off a bank or a group of consumers only needs things like credit card details, account numbers, and personally identified information (PII), all of which is sold in bulk on the dark web.
● Specialized Browsers – Specialized web browsers that modify digital fingerprints are a favorite tool among fraudsters looking to mimic legitimate web users. These browsers can modify device IDs, IP addresses, and more.
● Custom Configurations – Cybercriminals can access custom configuration files and scripts designed to bypass security systems. Without having to know any code themselves, they can gain access to all sorts of financial networks. Fraudsters even have their own AI tool for generating code, known as FraudGPT.
The dark web is a marketplace of illicit tools for perpetrating credit card and bank account fraud. Information sellers are those cybercriminals who have mastered the art of stealing credentials and account information. Buyers are the fraudsters looking to perpetrate illicit transactions without having the knowledge or desire to steal the information themselves.
Fraud Protection Evasion Tactics
Of course, security experts specializing in fraud protection are always on the lookout for illicit activity. That means cybercriminals need to take evasive action to avoid being detected. Once again, the darknet supplies exactly what they need.
For example, the darknet facilitates a practice known as proxy rotation. This is a practice of using lists of banned proxies, in rotating fashion, to avoid IP-based detection. By using a proxy only for a short amount of time before moving onto another, criminals can stay a step ahead.
Behavioral mimicry is another fraud protection evasion tactic. It relies on the practice of gradually mimicking legitimate user activity through smaller purchases, or other similar practices, before going for the big money. Behavioral mimicry is a way around rules-based fraud detection.
The icing on the cake is fraud perpetrated by generative AI. AI can be leveraged to launch sophisticated phishing campaigns. It can be leveraged to create deep fakes. Generative AI can even be used to create malicious code at a scale capable of overwhelming traditional detection methods.
Dark Web Services
If all of this were not enough, the dark web is also home to a lengthy list of services and resources designed to help criminals continue doing what they do. Though it is hard to imagine, the dark web is an entire community through which fraudsters actually help one another.
Someone new to financial fraud could log onto the darknet and spend a couple of hours going through online tutorials. A more experienced fraudster can log on and take a look at the latest real-time security and vulnerability updates. Criminals can even purchase fraud services. For example, ransomware-as-a-service (RaaS) provides fraudsters with pre-packaged malware that can be deployed with limited technical knowledge.
It can be hard for legitimate IT security teams to wrap their brains around the dark web. And yet, it's absolutely necessary. Fraud protection is an ongoing battle between good and bad forces. For the good to actually win, they need to thoroughly understand their enemy. And that means understanding where the enemy thrives: the dark web.