What is Fraud as a Service
Fraud as a Service?
No, you read that right. We didn’t mean SaaS. Apparently, SaaS has a sibling that is less talked about – FaaS.
Yes, there’s a market for fraud these days, and fraudsters are in the market for these services to introduce some level of ease to their “hard work”.
What is Fraud as a Service?
Fraud as a Service (FaaS) is a deceptive practice where cybercriminals offer a wide range of fraudulent services, tools and skills for a price to individuals looking to engage in fraudulent activities online. These services can range from phishing kits to malware and botnets, all designed to facilitate various types of financial fraud, data breaches, and identity theft
The concept of Fraud as a Service is not new. On the contrary, it’s been in existence for a few years, but given the discreet nature of the business, it is still largely under the radar and not so talked about. Unfortunately, this service continues to boom with more FaaS solutions and businesses springing up on the dark web, which happens to be their main marketplace.
How Does Fraud as a Service Work?
Just like SaaS, Fraud as a Service operates like a legitimate business.
This means they pay attention to basics like customer acquisition, pricing, customer support, building products and improving their services. They even offer user-friendly interfaces, subscription-based models, incentives and promotional offers such as free trials, discounts and training to intending and existing customers. In other words, it’s a business – a FRAUD SELLING BUSINESS!
The mode of operation for these fraud-selling ventures entails providing a suite of tools that enable even those with minimal technical skills to launch sophisticated attacks. They provide everything from stolen data lists to complete phishing campaign packages. Users can select the type of fraud they wish to commit, pay the service provider, and then deploy the tools or services as needed. The ease of access to these tools has led to a proliferation of cybercrime activities as they can easily be accessed and purchased on the dark web.
The services or tools offered by FaaS businesses vary from one to the other. For instance, a particular company could offer phishing services while another focuses on hacking services. This means that criminals do not have to acquire the skills or expertise needed to carry out fraudulent attacks. They could easily acquire those services as long as they can afford it.
The Current State of FaaS
FaaS has seen a surge in popularity among cybercriminals looking to capitalize on the vulnerabilities of individuals and businesses alike. The convenience and anonymity offered by these services make them an attractive option for those seeking to exploit others for financial gain.
As such, the current landscape of FaaS is alarming. The Federal Trade Commission reported that consumers lost over $10 billion to fraud in 2023, a 14% increase from the previous year. Investment scams topped the list of reported losses, amounting to more than $4.6 billion. The rise of FaaS tools has made it easier for scammers to target individuals, leading to a significant increase in fraudulent activities.
The Dangers of FaaS
The ease with which FaaS services can be procured has led to a spike in fraudulent activities, with investment scams and imposter schemes being the most prevalent. It not only leads to financial losses for individuals and businesses but also undermines trust in digital transactions.
The sophistication of these services allows for large-scale attacks that can bypass traditional security measures. For instance, distributed denial of service (DDoS) attacks, botnet development, and the creation of synthetic identities are some of the threats posed by FaaS. These attacks not only result in direct financial damage but also erode consumer trust and can tarnish a company's reputation.
On the other hand, engaging in FaaS not only poses a risk to the victims of fraud but also to the individuals purchasing these services. The legal repercussions of participating in fraudulent activities can be severe, resulting in criminal charges and hefty fines. Additionally, the personal and financial information of those engaging in FaaS is also at risk of being compromised, leading to potential identity theft and other cybercrimes.
In other words, you could start out as a customer with a FaaS business one day, and end up as a product the next day.
Protecting Yourself Against FaaS
Fraud as a Service poses the same risk as fraud. As such, safeguarding against FaaS requires the same measures needed to protect your business against fraud. This includes implementing strong cybersecurity measures such as two-factor authentication, limiting data entry attempts, utilizing secure payment gateways and regularly monitoring financial accounts for suspicious activity.
Additionally, companies should invest in employee training to recognize and respond to potential threats. Utilizing advanced anti-fraud solutions that leverage machine learning and behaviour analytics can also significantly reduce the risk of falling victim to FaaS. Companies like Pastel Africa’s Sigma offer AI-driven solutions to enhance fraud detection and credit scoring, helping businesses stay ahead of fraudsters.
By understanding the nature of FaaS and taking proactive steps to enhance their security posture, companies can safeguard their assets and maintain the trust of their customers. For businesses looking to stay ahead of the curve, Sigma by Pastel Africa offers cutting-edge solutions tailored to combat the evolving threats of FaaS. Discover more about how Sigma can empower your business to thrive in a secure digital ecosystem.
