Organized Fraud Rings Exploit Online Marketplaces on a Massive Scale

A study by Bureau reveals fraud networks exploiting online marketplaces through coordinated device farming. While these networks misuse platform features like referral incentives, their primary goal is accessing high-value accounts. The report highlights concentrated fraud in major cities and emphasizes the need for advanced risk detection techniques.

Online marketplaces are the new target for organized fraud networks, which are exploiting platform systems in a manner reminiscent of historical banking scams, according to a recent study by Bureau. The AI-powered risk decisioning platform analyzed 70 million users and found that these fraud networks operate on a massive scale, similar to the infamous Jamtara banking scams.

The report identifies that features designed for growth, such as return policies and referral incentives, are being systematically misused by these coordinated groups. The study highlights that 1 in 6 risky devices is linked to more than ten accounts on average, a sign of pervasive device farming at the heart of these fraudulent activities.

Device farms, the operational core of these rings, enable fraudsters to manage multiple accounts simultaneously, allowing rapid transitions between accounts. The report detailed 256 fraud clusters with about 45,000 accounts tied to just 9,000 devices. This setup facilitates high-frequency operations, with accounts recording over 50 activities in an hour, emphasizing the sophisticated nature of these scams.

Ranjan Reddy, Founder & CEO of Bureau, stated that this isn't just about promo abuse but a complex, cross-platform fraud network. The Bureau report underscores how these rings focus on scanning accounts for saved financial details, targeting them for exploitation. Such fraud clusters are notably prevalent in cities like Delhi, Bengaluru, and Noida.

Additionally, the report highlights that while 99% of users are genuine, current controls disrupt growth. The need for device- and network-level intelligence to handle the risky minority is critical. Beyond incentive fraud, return abuses are systemic, with culprits frequently returning empty or counterfeit packages. Although less than 1% of users are involved, they account for significant platform abuse.

Bureau provides fraud detection for nearly 300 million devices across various sectors, using its technology to combat these expansive fraud rings before they cause widespread financial harm.