Report: Online Fraud Coming from Cities with High Concentrations of Data Centers
Aug. 10, 2015
Tampa, Fla. topped a list of U.S. cities with the most fraud attempts, according to antifraud technology provider ThreatMetrix. The San Jose, Calf.-based company said the majority of the top 10, which included New York City, L.A., Chicago, several cities in Silicon Valley and Atlanta, were home to high concentrations of hosted data centers. Merchants need to scrutinize transactions coming from hosted servers and data centers more carefully, said Alisdair Faulkner, chief product officer for ThreatMetrix. The company’s working theory is that breached identities are being funneled through rented online servers using stolen credit cards.
“Criminals set up VPN servers and proxy software at hosted service providers to appear in a location that is consistent with a stolen identity,” said Faulkner. “For example, a fraudster might attempt a banking transaction that appears to be approximately located near the customer’s home address. While there are legitimate privacy-enhancing and VPN services also being hosted at these locations, a telltale sign that your data center is being used to monetize stolen identities will be an increase in the use of stolen credit cards to pay for server time.”
Faulkner said authentic transactions are more likely to come from businesses, consumers and mobile networks than hosted data centers and businesses should adjust their fraud screening accordingly.