For those who provide software as a service (known as SaaS), dealing with fraudsters that exploit subscription-based services is just a part of their daily routine. Still, the negative impact of subscription abuse activity in SaaS cannot be left alone forever.
Sure, some people might have mistaken Steam and Google Play’s library sharing as account sharing, but even those have a limitation. Fraudulent account sharing is more about unauthorized access through device fraud, breaking the terms of service.
This fraudulent device access is not just to illegally access someone else’s subscription account. Apparently, they can also snatch it for monetary gain. So, what can businesses do to really stop this long-existing issue?
What is Subscription Abuse?
In general, subscription abuse refers to any activities that involve misuse of a paid subscription service. Since subscription requires an account to gain the access, this account system can be misused for that access.
Just like any digital service that has an account system, fraudsters can exploit accounts in software as a service platforms. The examples of what they can do:
- Sharing an account meant to be used individually. This abuse allows multiple people to access the paid service while only one person subscribes.
- Selling a stolen/hacked account to multiple people. Many businesses sell these accounts or trial “team subscription” accounts at a cheaper price.
- Creating many accounts to continuously get its trial perks. For example, reusing the free 30-day trial advantage by making new accounts from different emails.
- Using a VPN hoping to get a low-priced offer. People can get cheaper prices by accessing some countries that have cheaper paid subscription service prices.
What is Device Fraud?
Like the name suggests, device fraud is a fraudulent activity that targets the victim’s device. There’s also another term called mobile device fraud, which targets the mobile application in the victim’s mobile device.
In order to do it, fraudsters have ways to target the victims. They can make victims install malware or fake versions of the application, exploit the vulnerabilities in the application, and write the login credentials to access the application unknowingly.
The goal in this fraud is pretty much simple: fraudsters gain unauthorized access to the application and do what they want to do with it. On the other hand, victims will have their account or device compromised.
How Device Fraud Facilitates Subscription Abuse
So, you might have been wondering about the correlation between device fraud and subscription abuse. To put it simply, this fraud can be used to facilitate subscription abuse by getting fraudulent account sharing.
By getting unauthorized access to the paid subscription account, victims are technically sharing their account with someone else. This can lead to worse situations, such as:
- Fraudsters can find personal information being used for the victim’s account. This may help them to try getting access to the victim’s other accounts that exist in their device.
- Fraudsters can sell the victim’s account for a profit to multiple people. Not only does the victim lose their account, but this activity allows fraudsters to grow this shady business even more.
The Hidden Costs of Device Fraud on Your Subscription Business
After understanding what is account sharing and the risks it possesses, another question arises: is account sharing dangerous, regardless of whether it is intentionally shared or the account is stolen by using fraud?
Sharing an account is always dangerous, especially if the other party member might lock everyone else out. However, in the context of stolen paid subscription accounts through device fraud, there will be some hidden costs for the SaaS business.
Revenue Leakage You Might Not Be Measuring
The first thing that can be easily noticed is a revenue leakage, where businesses can’t get the expected income no matter what. This is because it’s hard to tell which account is stolen and being used by multiple people.
Being unable to detect the guilty party that caused this revenue leakage, your business will also be unable to measure the actual losses. Your business may have just had even more loss than income.
Corrupted User Data and Poor Business Decisions
Remember that the fraud can be performed by manipulating or exploiting the subscription service application. This can also potentially cause the damage that results in victims losing their user data.
To prevent that, your business may need to spend more budget to upgrade your service application so that it cannot be easily hacked. However, some businesses may have made poor business decisions that just result in spending even more budget.
Damage to Trust and User Experience
Of course, no one likes finding out their paid subscription account has been compromised by fraudsters. Or at least knowing the fact that your business has a weak protection against fraudulent device access.
The result? Your actual customers that paid for your subscription business will slowly lose their trust and user experience. All while at the same time, fraudsters continue to take advantage of your business.
Why Detecting Subscription Abuse Isn’t as Easy as It Seems
This problem continues to exist for a long time in SaaS businesses for a reason. Detecting them is not as simple, given that:
- Fraudsters constantly search for new ways to abuse. Meanwhile, there is no all-in-one solution that can be used to combat every subscription abuse method, allowing some clever tricks to remain unnoticed for long.
- There is no conclusive way to distinguish between a genuine user and a fraudster. With synthetic identity fraud, fraudsters can keep creating new accounts by using a seemingly genuine profile to use trial perks.
How Keypaz Detects and Prevents Fraudulent Device Access
With that said, surely there must be some fraudulent account sharing prevention tools that businesses can use. Keypaz, for example, provides an AI-powered fraud prevention platform to detect and prevent fraudulent device access.
How exactly does Keypaz prevent unauthorized devices from accessing subscription accounts? Here’s how:
- Reduce abuse with device intelligence to identify well-known indicators. Keypaz can detect the usage of VPNs, geo spoofing, and jailbroken or rooted devices, indicating fraudulent activity.
- Quickly identify a risk in the user’s paid subscription account. For example, sudden logins in different locations or having multiple failed login attempts can indicate fraudulent device access.
Keypaz’s AI-powered fraud prevention can also adapt to any potential new fraud scheme, ensuring businesses maintain healthy revenue streams. Prevent subscription abuse in your business with Keypaz now!