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Scalper Bots Become a Gateway to Illegal Fraud
By Sam Crowther, Founder and CEO, Kasada
In recent years, automated scalper bots have become increasingly popular in purchasing in-demand goods or services with the intention of reselling them at a higher price. Scalper bots are able to bypass organizations’ security measures to purchase items faster than humans, which allows them to successfully secure many items before the general public.
According to the 2022 State of Bot Mitigation Report, companies already using anti-bot solutions lost up to 10% of revenue due to bot-driven account fraud. Because bot operators are becoming more sophisticated and creative about how to evade detection, we predict that more people will leverage scalper bots to cross the legal line and commit acts of fraud, rather than just purchase highly sought-after items like sneakers and electronics.
Grinch bots are a popular example of scalper bots at work. These bots buy large amounts of hot ticket items during the holidays and resell them on secondary markets for a profit. The outcome is unhappy customers and damaged brand reputations.
Crossing Over to the Dark Side
Recently, scalper bots have been repurposed for nefarious money-making opportunities, including stealing online accounts and conducting fraud. This is due to several factors including the low barrier to entry and the low cost of obtaining sophisticated bad bots and solver services (services that bypass most bot management systems), all of which require little technical expertise. As a result, damage increases and scalper bots can be applied more easily to break the law.
A prime example of this activity is the illegal sale of prescription medications which Kasada Threat Intelligence observed this past year. Through the use of stolen credentials, cybercriminals leveraged automation to gain access to online pharmacies to steal customer accounts and take advantage of the distribution of prescribed medications. The active prescriptions were then accessed and resold illegally.
This activity is not only illegal, but it is dangerous, with negative consequences for both pharmacies and customers. Pharmacies may suffer financial harm, and customers may be at risk of receiving fake, expired, or unsafe medications. It also takes prescribed medications away from legitimate patients who need them.
We predict that the use of bots for illegal purposes will increase since it is more profitable and easier than it used to be. Sometimes inadvertently as there’s a fine line being crossed from scalping to conducting fraud. It’s important for online businesses to take steps to protect their brands and customers against scalper bots and other automated attacks. One of the best ways to prevent malicious bots from affecting your organization is to develop a security strategy that proactively detects and mitigates automated threats in real time and adapts accordingly to stay one step ahead of attacks.
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ABOUT THE AUTHOR
Sam Crowther is the founder and CEO of Kasada, a cybersecurity company specializing in stopping bot attacks. He is an entrepreneur with a passion for cybersecurity. With funding from leading U.S. and Australian investors, Sam launched Kasada in 2015 to provide an innovative web traffic integrity solution to companies around the world. Based in New York and Sydney, his goal is to create simple technical solutions to complex problems. Sam is motivated by challenging preconceived ideas and beliefs in order to have a positive impact on the world.
