The as-a-service (aaS) model is everywhere. You can get software, infrastructure, platform, disaster recovery, cyber-security, and countless other items as a service. This model gives customers access to products that they traditionally couldn’t afford on their own, and it streamlines ownership by providing support for implementation, deployment, and usage.
However, it’s not just legitimate consumers that have gravitated toward this model. The as-a-service model is so attractive that it’s also been embraced by criminals. Now, big-time criminals offer fraud as a service (FaaS) to other criminals who are just starting their lives of crime or opportunists looking for easy money. If you run a financial institution, you should be aware of this threat and how to protect yourself.
What Is Fraud as a Service?
Fraud as a Service (FaaS) is when fraudsters sell their services to help people commit fraud. FaaS providers don’t just sell account numbers or identities. Instead, they offer a full gamut of fraud-for-hire services.
These organizations operate like businesses. They often offer free trials or customer satisfaction guarantees. They also focus on customer support and are constantly looking for ways to improve their offerings.
How Does FaaS Work?
Just like other as-a-service models, FaaS provides clients with services over the internet. However, in this case, the clients are criminals, and the services enable them to commit fraud.
Thanks to FaaS, criminals don’t need to learn how to hack into programs, write phishing emails, or take over bank accounts. Instead, they can plug into the services offered by an FaaS organization and commit a wide range of different crimes.
FaaS providers offer a variety of different fraud services, and they often specialize. For instance, one provider may focus on attack bots, while another is an expert at phishing attacks. Clients can purchase the services they need, and they enjoy the core benefits of the XaaS model such as cost-effectiveness, low overhead, tech support, and scalability.
Examples of Fraud as a Service
FaaS is as broad as fraud in general. There are organizations offering a wide range of different fraud services including the following:
- Online payment fraud: Credit and debit card numbers, authorization details, and account holder details so that criminals can commit online payment fraud.
- Account takeover: Login details, change of address, and other essentials to take over someone’s account without any phishing or hacking.
- Loan fraud: Stolen or hybrid identities, loan applications, and coaching to commit loan fraud.
The types of FaaS fraud are constantly evolving. Fraudsters are very smart, and the criminals driving FaaS are the cream of the crop. They know how to make money by teaching other people how to commit crimes. The way they offer these services also varies.
For example, one provider may offer specific details to help a client take over a victim’s account. Another provider, in contrast, may offer bots that allow a client to check thousands of usernames and password combinations so that they can take over multiple accounts.
How FaaS Works
FaaS schemes consist of two players: the person selling the fraud as a service and the person buying the fraud as a service. Typically, the person selling is a skilled criminal, while the second person is an aspiring criminal or sometimes even just an opportunist who doesn’t necessarily think they’re doing anything wrong.
Often, the relationship starts on social media. The FaaS providers create groups with tips designed to entice opportunists to join their groups or follow their pages. Then, the FaaS providers lure the followers into paying for fraud services. However, these interactions often take place on the dark web as well.
Other Types of Crime as a Service
Fraud as a service isn’t the only threat. Criminals also offer ransomware-as-a-service (RaaS), cybercrime-as-a-servce (CaaS), Distributed denial-of-service-as-a-service (DDOSaaS), phishing-as-a-service (PaaS), and others.
How to Protect Your Bank From FaaS
To protect your financial institution, you need fraud prevention tools that look at all aspects of customer interactions, not just payment transactions. You also need tools that work in real-time, leveraging data and machine learning to optimize accuracy and efficiency.
Beyond that, you need to get to know the criminals, and that means working with an anti-fraud partner focused on gathering cyber threat intelligence from social media, the dark web, hacker forums, etc. to learn about new and emerging threats.
At SQN Banking Systems, we customize fraud prevention strategies for our clients. We work closely with you to create an approach to fraud based on your unique threats and vulnerabilities. To optimize our offerings, we partner with Q6 Intelligence for cyber threat intelligence focused on early detection and rapid breach response.