Mobile fraud cases are becoming a growing concern for app developers, experts and users. Fake reviews and phishing schemes that steal personal information are fraudulent activities. These activities affect mobile app security and its ecosystem's integrity along with decreasing user trust.
Imagine how a fake Android app poses as a housekeeping service to steal online banking credentials from customers of eight Malaysian banks, isn't it scary?
To promote the malicious APK, 'Cleaning Service Malaysia,' the app is advertised through multiple fake or cloned websites and social media accounts. This app was found by MalwareHunterTeam and was analysed by Cyble researchers, who provided detailed information on the app's malicious behaviour.
Hence mobile app fraud and abuse can take many forms, including fake reviews, click fraud, fake instals, and even identity theft. These activities harm the users and impact the reputation and financial health of app developers and businesses.
So, what are the strategies that app developers and businesses can implement to prevent and detect mobile app fraud and abuse?
Before you dive deeper into the strategies for preventing and detecting mobile app fraud and abuse, learn about the mobile app fraud definition and how it works below.
What is mobile app fraud?
Mobile app fraud is a type of online fraud that explicitly targets users of mobile devices.
Scammers frequently create fake mobile apps that look like popular legitimate apps but contain malicious code designed to trick users into sharing private data or money.
Because these apps can be difficult to distinguish from legal ones, you should be cautious when downloading and installing new apps on your devices.
How a fraud app works
Hackcontrol reveals how a scam app works. The simplest form of the scam is when a user buys to download a programme only to discover that it has no functionality at all. In this case, the victim merely loses a handful of the app's purchase price.
Another category of bogus apps bombards the user's phone with hundreds of adverts while the con artist reaps the financial benefits of the ads.
Some of the hardest malware fake apps conceal their shortcut from the home screen, making it challenging for users who are not tech-savvy to remove them off the device.
Besides, although COVID-19 has been widely criticised for the current growth in mobile banking, the use of mobile devices is expected to increase going ahead. In Q1 2020, mobile banking Malware increased by a whopping 173%, and according to industry specialists, mobile phishing attempts increased by 37% globally.
How to detect mobile app fraud
One article from Onespan reveals examples and ways to detect mobile app fraud.
1. Reverse Engineering
For example, a hacker may release malicious software on their own that is intended to take advantage of weaknesses in the banking app's security.
2. Repackaging
An attacker will first reverse engineer an app, add malicious code, and then relaunch the modified app on unofficial markets.
3. Overlay Attacks
An overlay attack involves the display of an attacker-generated screen over the user interface of a real application. To the unsuspecting victim, it will seem like a normal app experience, but they will be inputting sensitive data into a form that the attacker controls, including usernames, passwords, credit card numbers, and other personal information.
4. Rogue Keyboards
To replace the built-in keyboards on mobile devices, there is a tonne of reliable alternative keyboard apps available in the app store.
5. Mobile Banking Trojans
Although a mobile banking Trojan may seem to be legal, it may be concealing malware that targets a mobile banking app on the afflicted device.
6. Man-in-the-Middle Attacks
In a Man-in-the-Middle attack, the fraudster places themself in the middle of the customer and the financial institution to secretly intercept, edit, send, and receive messages between the two parties.
7. SIM Swapping
When a consumer buys a new device and the previous SIM card is no longer functional with it, mobile phone providers legitimately offer the service of swapping a SIM card.
8. Mobile phishing
This is a type of phishing when a criminal SMS you a link to deceive you into clicking on it.
How to prevent mobile app fraud
As developers and business owners, let’s take a look at the practical strategies to prevent mobile app fraud below:
1. Background checks on users and partners
One of the most effective ways to prevent mobile app fraud and abuse is to conduct thorough background checks on users and partners. This can include verifying user identities, performing credit checks, and reviewing previous app usage history. By implementing these checks, developers can identify and eliminate users likely to engage in fraudulent activities.
2. Use security measures
Implementing robust security measures is another effective way to prevent mobile app fraud and abuse.
This includes using encryption to protect sensitive user data, implementing multi-factor authentication to prevent unauthorised access, and regularly updating security protocols to avoid new threats.
3. User behaviour tracking
By closely monitoring user behaviour, developers can identify suspicious activity and take action before any fraudulent activity occurs. This can include monitoring app usage patterns, detecting fraudulent app installations, and analysing user reviews to identify fake or spammy content.
4. Use user authentication processes
App developers should implement user verification processes to prevent identity theft and other forms of fraud. This can include requiring users to provide a valid email address, phone numbers, government ids, or Biometrics such as facial scans, and voice analysis. This will make it more difficult for fraudulent users to create fake accounts and commit fraudulent activities.
5. Collaborate with fraud detection experts
App developers can also collaborate with fraud detection experts to identify and eliminate fraudulent activities. These experts can provide specialised tools and expertise to identify and prevent fraud, as well as offer ongoing support and guidance to developers.
6. Educate users
Educating users about mobile app fraud and abuse is another effective way to prevent fraudulent activity. This can include providing users with tips on how to protect their data and avoid fraudulent activity and providing clear guidelines on what constitutes acceptable behaviour on the app.
7. Use mobile in-app protection
To make mobile apps more resistant to mobile threats including repackaging, malware, script injection, reverse engineering, SMS grabbing, and other mobile threats, developers should include mobile in-app protection solutions in their mobile apps.
8. Use the latest technology
The latest technologies such as MFA (Multi-Factor Authentication), two-factor authentication (2FA), and QR-like codes protect financial transactions.
Wrapping Up
Mobile app fraud is a serious issue that can harm users, app developers, and businesses. However, by implementing these strategies, developers and companies can prevent and detect fraudulent activity, protect user data, and maintain the integrity of their app platforms.
Further, it’s important to consider the security aspects of your app and not just the features. The right partner can help you build an app with the right security measures in place.
VirtualSpirit Experts have years of experience working with both businesses and users, so they are well-placed to help you build the right security for your app. Let’s discuss it!
