Hacker using mobile smartphone

Online Fraudsters: Unveiling the Methods Behind Digital Impersonation

Over the past decade, technological tools have developed at a breathtaking pace, continually innovating and pushing the bounds of what was previously thought possible. Yet, not all of these technological advancements are put to good use, with fraudsters using technology to hone their ability to duplicate sites, falsify identities, and commit acts of fraud.

Since 2019, counts of digital fraud in every category have skyrocketed, with synthetic identity theft and account takeover increasing in volume by 132% and 81%, respectively. In order to stay safe online, organizations and individuals alike need to understand the methods that digital fraudsters are using.

By proactively looking out for fraudulent activity, organizations and individuals alike can radically reduce the possibility of falling into a scam. In doing so, they mitigate the potential for real-world consequences and financial repercussions that often occur after a case of digital fraud. In this article, we’ll explore the methods and tactics behind digital impersonation, demonstrating what they are and exactly how businesses and individuals can spot and neutralize them.

Let’s dive right in.

What Are the Main Methods Used by Online Fraudsters?

Although digital fraud comes in many forms, the methods fraudsters use are fairly narrow in comparison. The vast majority of fraud events are caused by one of three methods: phishing, spoofing, and malware.

By understanding how attackers execute each of these methods, users can protect themselves and businesses can take preventative and proactive steps to secure their networks, train their staff, and ensure the safety of their customers.

Phishing: Deceptive Emails and Website Impersonation

Phishing is the most common form of cybercrime, with over 3 billion phishing emails being sent out every single day. Fraudsters will send out an email that appears to be from a reputable company or service, such as a bank or phone provider. Within these emails, fraudsters will include links to falsified websites which closely resemble real services. That is the essence of phishing: tricking users into believing that they’re interacting with a real company or service that they’re familiar with. Once fooled, customers may give out their passwords, bank details, or credit card numbers to the fraudsters, allowing them to gain access to their accounts and steal their funds.

Technology today affords fraudsters the ability to duplicate websites, creating 1:1 clones that easily trick users. The image below demonstrates this with PayPal. While this may seem like a normal login screen, you’ll notice that the HTTP address is not secured and that the URL is not the same as the real PayPal website.

PayPal website

How To Defend Against Phishing: The best way to stay ahead of phishing attacks is awareness training and education. Users should educate themselves on the dangers and be wary of unexpected or unfamiliar emails or text messages. Don’t open attachments or links in unsolicited emails, even if the emails come from a recognized source.

Businesses have a two-fold responsibility in not only protecting themselves, but their customers. There are anti-website impersonation tools brands can use to save their image and prevent damages to their customers. Memcyco, a new player in the space, monitors brand websites and can detect cloning attempts in real time. It also warns customers if they enter a spoofed version of a brand’s website and alerts security teams to neutralize the threat. In addition, Memcyco provides a digital watermark for brands to put on their website, acting as a proof of authenticity for customers to instantly recognize.

Just as fraudsters leverage the modern technology landscape to achieve their malicious goals, businesses can protect themselves and their customers with real-time tools, user education efforts, and awareness training.

Spoofing: Manipulating Caller ID and Email Headers

Spoofing is another common tactic employed by fraudsters, similar to phishing in that it involves trickery by masquerading as a legitimate source, but different in that the end goal is often identity theft as opposed to information theft. Spoofing also usually involves malicious software being downloaded onto the victim’s computer.

One common example of spoofing is manipulation via telephone, in which attackers tamper with caller ID to display a different number from the one that’s actually calling, such as by using a local number that appears familiar to the victim. Another case is email header spoofing, which gives the impression that an email is being sent from a different source or origin.

Like most digital fraud efforts, spoofing relies on users making one small mistake. With the business of our daily lives, it’s easy to misread information and believe that it’s real. Unfortunately, this one small mistake is all fraudsters need, especially over email or phone, where they can directly extract information from their target.

Apple support

Malicious users can use Unicode spoofing, lookalike domains, or AD (Active Directory) spoofing to create the above fake emails. A good rule of thumb is to always take your time to check the veracity of a line of communication that you receive. Banks and government agencies will never require you to give out personal details online or over the phone.

How to Defend Against Spoofing: The best way to defend against spoofing is to ensure you have Sender Policy Frameworks and DomainKeys Identified Mail enabled within your email account. In terms of tools, a DMARC Analyzer such as PoweredMARC can help prevent spoofed emails from arriving in your inbox.

Malware: Exploiting Vulnerabilities

Malware, commonly distributed via email, is software that users accidentally download onto their computers. This malicious software will farm information from the system, log sensitive information, and create backdoors that hackers can use to enter a computer.

Most of the time, malware is held within files that a user will click on within an email. As this only requires a user to misclick on a singular file, it is a notoriously common mistake that occurs. The image below demonstrates this, with the malware in question appearing inside the zipped file on the email.

Email malware

How to Defend Against Malware: To defend against malware, it’s important to stay vigilant when reading emails. Always look out for fishy wording or inaccurate spelling or grammar, which could indicate a lack of professionalism usually present in legitimate emails. To detect and prevent malware, it’s advisable to use security management systems that can scan for malicious activity in your inbox. Guard.io, for example, monitors email, scans through files, and neutralizes malware before it ever lands in an inbox.

Defending Against Digital Impersonation

Digital organizations and individual users alike are not defenseless when it comes to their online security. On the contrary, there are a number of ways both groups can protect themselves from digital fraud:

  • Use MFA: Multi-factor authentication adds an additional security layer to passwords and user accounts. This extra layer can be invaluable in preventing security breaches.
  • Educate the workforce: It only takes one mistake by a singular employee to put an organization at risk. Running security seminars within organizations can keep team members in the loop and ensure that everyone knows what to keep an eye out for.
  • Use digital tools: Employing digital security tools, such as those we’ve outlined in this article, can be a worthwhile investment for organizations to keep their customers safe, or for individuals to protect themselves at home.

Being aware of the various fraud methods is the first step towards an effective defense. By looking out for the methods detailed in this article, organizations and individuals are one step closer towards keeping their identities and assets secure.


Staff Writer at CPO Magazine