The Silent Threat: 8 Signs of Bot Fraud
Cyber Risks & Threats | October 11, 2023
The term bot fraud stands for any type of online fraud delivered by malicious bots. These malicious bots are a piece of code programmed to perform harmful activities in the digital world.
They can steal your data, send annoying spam, take control of your accounts, and even cheat advertisers and steal their ad budget by clicking on their ads.
The scary part is that automated bot attacks are growing fast. In the State of Fake Traffic report, CHEQ evaluated that the volume of attempted attacks or access by fake, suspicious, or malicious actors increased at an unprecedented rate–up 167% from 2021.
Just to picture the level of harm, bad bots cost advertisers a whopping $35.7 billion in 2022 due to ad fraud.
Bad bots are not going away, and it could be a big headache, especially for unprotected businesses.
In this article, we’re going to break down how bot fraud hurts businesses, how to recognize it, and, most importantly, what you can do to protect yourself online. Let’s dive in!
The consequences of bot fraud
Automated bot attacks can take different forms and target various aspects of your business. It may affect your servers, online ads, websites, or applications, depending on the fraudsters’ intended purpose.
One of the most common threats by bots. It happens when bots deliver a large volume of fake clicks on online ads and drain advertisers’ budgets.
For example, your competitor might want to gain a competitive advantage over your business. To do this, they might hire click bots to generate fraudulent clicks on your online ads. These fake clicks would prompt the advertising platform to charge you, even though they don’t come from genuine users interested in your product or service.
As a result of bot activity, advertisers may see a decrease in the return on investment (ROI) for their advertising campaigns.
Bot fraud can lead to direct financial losses for businesses and consumers. For example, bots can be used to steal money from bank accounts, make unauthorized purchases, or commit insurance fraud.
Bots can be used to steal sensitive data, such as personal information, medical records, and trade secrets. This data can then be sold on the black market or used to commit identity theft.
Bots can be used to launch cyberattacks, such as distributed denial-of-service (DDoS) attacks, which can overwhelm websites and servers, making them unavailable to legitimate users.
Skewed analytics is a specific consequence of bot fraud. The fake traffic and engagement generated by bots lead to misleading data on website traffic, user behavior, and conversion rates. This can make it challenging to assess the true performance of a business’s marketing efforts.
When businesses are targeted by a bot attack, it can damage their reputation and trust with customers. For example, if a customer’s bank account is hacked by a bot, they may be less likely to do business with that bank in the future.
8 signs of bot fraud on your business and campaigns
If you haven’t implemented an automated bot detection and protection system yet, you might be wondering how to spot bot activity in your business’s website, analytics, and campaigns. Early detection is crucial to prevent substantial damage.
Here are eight warning indicators of bot fraud that you should keep a keen eye on:
1. Suspicious data transfer
Data transfers within your computer systems can be routine, such as when authorized users share files or access information.
However, any unusual or unexplained movement of data can indicate a potential security breach within your systems. This could signal that malicious software may be attempting to access or steal sensitive information without your knowledge.
2. Irregular network patterns
Network traffic typically follows predictable patterns in a well-functioning system. Authorized users access specific resources, communicate with servers, and exchange data in a structured manner.
However, irregular network patterns deviating from this norm may suggest a security concern. For example, if you notice unusual network activity, such as spikes in data usage or connections to unfamiliar IP addresses, it could indicate the presence of malicious bots in your system or network.
3. Unauthorized access to systems or data
When bots gain unauthorized access to your computer systems or data, they can enter it without proper permission.
This is a critical sign of potential bot fraud because it indicates that someone or something may be attempting to breach your security measures. Such access can be used for malicious purposes, including data theft, unauthorized modifications, or the planting of malware.
Be vigilant for any attempts or successful breaches into your systems or sensitive data. Detecting and addressing unauthorized access promptly is essential to prevent further security breaches.
4. Unusually high click-through rates (CTR)
Click-through rate (CTR) measures the percentage of users who click on a specific link or ad compared to the total number of users who view it.
An unusually high CTR can be a red flag for bot fraud. Bots can artificially inflate CTRs by repeatedly clicking on links or ads, making it appear as though there is a significant interest from genuine users. This can lead to inaccurate performance metrics and potentially result in wasted advertising budgets.
If your online ads are suddenly getting a lot more clicks than expected, it could indicate ad fraud or other irregularities that need investigating to protect your ad budget.
5. Faster spend of ad budget without engagement
A rapidly exhausted ad budget without generating meaningful engagement is another sign of ad fraud.
When bots repeatedly click on your ads, the advertising platform registers these interactions as genuine human engagement, causing your budget to diminish rapidly.
To identify this issue on time, it’s crucial to monitor the rate at which your ad budget is spent and compare it to actual engagement metrics. By doing so, you can pinpoint suspicious activity.
Analyzing the spending pattern of your ad budget can help uncover discrepancies and potential bot-driven click fraud, preserving your resources and ensuring your ad campaigns reach real, interested audiences.
6. Irregular traffic patterns
Irregular traffic patterns refer to deviations from the expected and typical behavior of user traffic on your website.
This can include sudden spikes in traffic, unusual navigation paths on the website, or high volumes of requests from specific locations. Such irregularities may indicate bot activity, especially if it doesn’t align with the usual user behavior.
Monitoring and analyzing traffic patterns regularly in your Google Analytics or other reporting tools can help you identify malicious bots on time.
7. Repeat information for multiple contacts
When multiple contacts or accounts share identical or very similar information, it may suggest a form of bot fraud. Bots can generate fake profiles or accounts with repetitive or copied information, attempting to manipulate your website and online forms.
Recognizing these patterns and implementing verification processes can help mitigate the risks associated with such fraudulent activity.
So, if you notice the same information from multiple contacts, it should be taken as a sign to implement further protection techniques.
8. A high volume of leads from a single IP address
Receiving an unusually high volume of leads, inquiries, or interactions from a single IP address can be a strong indicator of bot fraud.
Bots often use a single IP address to generate a large number of requests or submissions, overwhelming your website and potentially disrupting legitimate user interactions.
Identifying and blocking suspicious IP addresses is a crucial step in preventing bots from accessing your website.
Bot prevention techniques to avoid bot fraud
Preventing bot attacks requires a mix of strategies and tools tailored to the specific risks you want to protect against.
First and foremost, keep an eye on your traffic regularly or in real-time. This will help you spot any traffic irregularities and take appropriate measures on time.
Additionally, following user activity patterns could help you identify anomalies that may indicate bot activity. For example, opening too many pages in a single one-minute session is not typical of human behavior and may signal potential bot activity.
Implementing rate limiting (a strategy for limiting network traffic) is another valuable tactic. By restricting the number of requests originating from a single IP address or user agent, you create obstacles that make it harder for bots to overwhelm your system.
Keeping your security protocols up to date and staying well-informed about emerging bot threats is equally important since cybercriminals continually refine their tactics.
Additionally, fostering awareness within your team and user community about the risks associated with bot fraud is essential. Encourage a proactive approach to reporting any suspicious activity, as early detection is often key to prevention.
Automated bot prevention solution to combat malicious bots
Lastly, consider harnessing the power of machine learning algorithms and AI-driven solutions to mitigate and stop bot attacks in real-time.
These adaptive technologies can effectively respond to new and sophisticated bot attack methods, helping to protect your business.
For instance, CHEQ Essentials runs over 2,000 behavioral analysis tests in real-time for each visit to distinguish between human and bot activity. This way, it detects and blocks the malicious bot actions to prevent further harm to your business.
What are bots in fraud?
Bots are software programs or codes programmed to operate autonomously and execute automated tasks at a scale.
In the context of fraud, cybercriminals use bots to carry out malicious activities over the internet, including stealing sensitive data, artificially inflating advertising metrics, or spreading spam.
These bad bots pose a significant threat to the entire online ecosystem and cybersecurity. Businesses must be aware of the risks associated with bots and take measures to protect their online assets.
What are the industries most affected by bot fraud?
Bot traffic experienced a significant rise over the recent years and now consists of nearly 50% of the entire online traffic.
However, some industries are a more attractive target to fraudsters. Some insights show that the industries most affected by bot fraud in 2022 were:
- Media and Streaming – 57%. Bots can be used to generate fake views, engagements, or streams, artificially skewing the data.
- Travel and Hospitality – 49%. In the travel and hospitality industry, cybercriminals use bots to make fake bookings, steal customer data, and spam customers with unwanted messages.
- Ticketing and Entertainment – 46%. Bots are often used to buy tickets to popular events and resell them at a higher price.
What is bot fraud in digital advertising?
In digital advertising, bot attacks are mostly associated with ad fraud. This happens when bots, or an entire network of many bots (known as botnets), are employed to deliver fake clicks, views, or other forms of interaction to online ads.
Bots are programmed to imitate human users, which makes it difficult for advertisers and advertising platforms to distinguish between bots and real human activity. Such fraudulent traffic delivered by bots wastes advertisers’ money and skews campaign performance data.
Bot fraud is a major problem for the digital advertising industry. It’s estimated that ad fraud, caused mainly by bots, will cost businesses 100 billion U.S. dollars globally in 2023.