iGaming is one of the most profitable industries on the web. Advances in technologies are making online gambling more accessible and easier to play. By being a profitable industry, online gaming is risky and prone to cheating.
It is important to consider fraud risks to avoid marketing and financial losses, as well as compliance risks. To control many types of fraud, regulators impose requirements that the implementation operators are responsible for enforcing. So, despite the initiative of fraudsters, the prevention of fraud is the operator's responsibility.
Multi-accounting fraud
One of the primary and well-known forms of fraud is multi-accounting: one person creates multiple accounts on a website. It seems harmless at first glance, but in fact, is an effective way to make a profit. Therefore, despite its notoriety, this fraud type is still common. There are several ways why creating multiple accounts attracts cheaters and how it leads them to profit:
- Bonus hunting. If a sign-up bonus is available on the website, the hunter will try to get it multiple times: losing on one account, he creates a new one. Also, hunters show interest in Welcome deposit offers, which are usually the most attractive promotions on a website;
- Gnoming, chip dumping. These strategies increase the odds of winning at poker, for example, by creating multiple accounts and using them to lose deliberately to influence the results in favor of the primary account;
- Affiliate fraud. When cheater creates multiple accounts, using an affiliate link, they can benefit from affiliate and bonuses for the registration without increasing the base of players for the platform;
- Bypassing previous account closure or restrictions. When the platform applies restrictions or bans to the customer due to term violations or previous fraudulent activity, they can try to bypass these restrictions by creating a new “clean” account.
How to stop multi-accounting fraud?
To prevent multi-account fraud, it is crucial to implement a system check to match the following data on the account: IP address, e-mail, devices used, personal data, and betting patterns.
What do 1Click Games have to offer?
1Click Games offers its own system with several checks that take place both during and after customer registration to prevent the creation and use of multiple accounts. Using its experience and expertise in iGaming, 1Click Games can fully protect the site from fraud attempts through clear rules, verification, and manual control of automated processes.
However, 1Click Games always thinks about the client first, so if a client is interested in a third-party system to prevent multi-accounting fraud, this system can be integrated into the platform!
Payment fraud
There is always the risk of users who join the casino not for fun and entertainment, unfortunately. Aside from fraud with multiple accounts, there are other ways to get hold of funds by taking advantage of gaps in casino security and payment systems’ policies:
- Chargeback fraud. Chargebacks were created to protect customers who want to dispute an online purchase made without their knowledge or permission. If the credit card company after the investigation agrees with a customer, the merchant must refund the funds received from the customer and pay a chargeback fee to cover the administrative costs. However, after making a deposit and losing it, some customers open a chargeback dispute stating that their card was stolen, payment was not authorized, and deny making the initial transaction. After this, it is the operator who should refund the customer and also pay a chargeback fee to cover the administrative costs;
- Using the 3rd party card. This is one of the most common ways of payments fraud when a customer uses a stolen or borrowed card which belongs to another person. Such activity is illegal and could indicate that criminals are using stolen cards to launder money or finance terrorism. And even if the card is not stolen, but is being used by a family member, the cardholder can fill the chargeback request and the operator will incur losses;
- Self-exclusion fraud. At first, the user opens an account and self-excludes it. He can do it from his account or by contacting the support agent to request closure. Then they open a second account with the same operator or those that fall under the same license as the parent company. It is important that casinos are connected. They deposit large amounts and play volatile games at max bet. If they lose, they blackmail the operator into getting a refund, by claiming their self-exclusion was not respected.
How to prevent payment fraud?
With payment fraud, the potential risks caused to the operator can be reduced with the right tools. The most crucial steps are identification and verification in the next stages:
| Registration | Deposit | Monitoring |
|---|---|---|
| One of the most effective methods of dealing with self-exclusion fraud is to identify the user during the registration process. In that case, you can prevent them from creating an account, and thus the self-excluded player will remain self-excluded, the rules will be respected, and losses will be avoided. | In this step, it is necessary to confirm that the customer is using their own card, e.g. with a 3D secure verification. Typically, the customer is redirected to an authentication page on their bank’s website, and they enter a password associated with the card or a code sent to their phone. With this additional verification step, the customer confirms their access to the card, which helps avoid the use of a stolen card. | It is important to take into consideration the possibility that the previously verified customer can use new payment methods that have yet to be verified or sell their account to criminals who will use it for money laundering or terrorism financing. Therefore, even after verification, customers’ activity should be monitored on a regular basis. |
Operating the online casino, you can delegate payment method verification to an out-sourcing company, automate this process, or perform manual checks. Each has both pluses and minuses, in terms of cost, effectiveness, and quality. Automatic fraud detection is less flexible and unable to detect new ways of fraud without the appropriate implementations. However, a 24-hour automatic check will cost much less than a 24-hour human check by your employees or our-sourcing company. If you outsource verification, you need to clearly control the risks associated with it - the protection of personal data, and the quality of service, as well as prevent the possibility of collusion with fraudsters or use of your product for their own purposes.
What is 1Click Games' approach to payment fraud?
1Click Games offers a combined fraud prevention system, where both automated and manual processes are set up in such a way as to prevent attempts at fraud as quickly and efficiently as possible. Even though the manual process may seem more costly and less time-efficient, in our experience we have seen that proper training of employees and additional tools created for them can significantly speed up the verification process and in the long run bring profits. Automated processes make the verification process much faster and more convenient, and additional manual verification and transaction monitoring by highly skilled employees has led to less than 1% of chargeback received! At the same time, with a great level of service and communication, we keep those players who come for fun and adventures and stay compliant with our regulatory requirements.