Fraud prevention is as much about building relationships and telling compelling stories as it is investigating fraud and collecting data. Once you uncover a pattern of fraud or abuse, your next step is building a plan for how to address it and getting stakeholder buy-in. But if the return-on-investment isn’t immediately clear, that can be harder said than done. In the gig platform and digital marketplace industries, multi-accounting is an excellent example of this phenomena.
Proving that your platform has a multi-accounting problem is only the first step in the journey. You also have to convince your key stakeholders that it’s worth the resources it would take to fight back against fake accounts. In this post, we’ll talk about some useful strategies for framing your multi-accounting discussions.
Having a successful platform with an actively growing user base is a great thing, but it does come with its own challenges. The more popular a platform is, the more likely it is that fraudsters might want to target it.
Fraudsters make dozens of fake accounts to help them do things like abuse promotions, scam legit users, and evade bans, but these fake accounts also have a secondary effect—they can distort your core metrics. Left unchecked, fraudster accounts might even skew the data enough to affect decisionmaking, especially in teams like marketing.
In a webinar with Incognia called “Multi-Accounting: The Gateway to Marketplace Fraud,” Glovo’s Head of Operations Faisal Ahmad Jarif explained that multi-accounting negatively impacts your understanding of your own platform:
“Multi-accounting actually impacts marketplace operations massively as it disturbs some of the core and key metrics.
For example, total number of downloads of your app, active customer base, average spending by a customer on the platform. Because what you feel is your active customer base may not actually be a unique customer base, but some of the customers may be actually having duplicate accounts. So, these are the metrics that do all your growth metrics, all your customer churn metrics, retention metrics, et cetera.
They can be completely disturbed if you do not know what your exact or unique customer base is, and multi-accounting really impacts your business altogether.”
Addressing multi-accounting allows for a clearer picture of your metrics and your core customer base.
Multi-accounting has the power to damage both your company’s revenue and its reputation. Refund and promo abuse cost a platform money at scale, and multi-accounting also makes committing scams against legitimate users easier, leading to a loss of trust.
In one case, Incognia detected a single device that accessed over 400 accounts on a marketplace app. With those accounts, the device owner was able to consume around 2,000 euros in promotions in just a thirty day period.
In another instance, we helped a food delivery app curb a social engineering scam by identifying that the guilty drivers were using multiple accounts to evade bans and repeat the scam as many times as possible—one courier accessed four different accounts and was able to scam $2,668 from the app’s legitimate customers.
In these cases, the platform loses out on money and the user experience suffers—either because promotions meant for legitimate users are going to fraudsters, or because fraudsters are using fake accounts to run scams.
Tackling fake accounts helps maintain the platform’s integrity and profitability by stopping the most costly fraudsters—the ones who operate at scale.
Promotional campaigns are a big target for fraudsters who use multi-accounting. With dozens or even hundreds of accounts, they can claim the same promotions as many times as they want before reselling the platform’s service to a third party at a profit.
These promotions are typically intended to entice new users or to reconvert existing customers—when a percentage of them is going to the same few fraudsters spread out over many fake accounts, that campaign’s effectiveness goes down. The budget isn’t reaching its target audience. The campaign isn’t able to do its job of promoting growth.
Teams in charge of growth are often hesitant to add any friction or additional verification to the onboarding process. Their job is to bring people in, and they see fraud prevention as something that might discourage new users instead.
But we have to keep in mind the type of customers we want to attract. Fraudsters don’t make good customers. They have a low lifetime value because they typically churn immediately.
Legitimate users, on the other hand, have a higher chance of staying with the platform and making additional purchases. Targeting friction towards fraudsters at onboarding ensures that the most valuable users are the ones getting access.
Like we mentioned in the introduction, knowing about the fake accounts is only part of the equation. You also have to advocate for the benefits of limiting multi-accounting.
If fraudsters just made extra accounts and then never used them, maybe it would be a different conversation. But as fraud prevention experts, we know that fraudsters are using their fake account stores to commit ban evasion, refund abuse, promo abuse, scams, and various other harms. Left unchecked, they threaten the integrity and profitability of the platform.
Addressing multi-accounting, on the other hand, has the potential to reduce refund abuse reimbursement costs, make marketing campaigns more effective, safeguard the user experience, and maintain the accuracy of key metrics.
Unfortunately, multi-accounting isn’t a small problem. But that also means that solving it has the power to cause big, positive impacts on your platform. It’s just a matter of understanding the return on investment—how much it costs to address multi-accounting versus how much multi-accounting is costing you.