Device-Based Fraud: The Fraud You Don’t See Coming

Hello folks, welcome to another blog of InsightAI on fraud and digital risk.

Most fraud today does not start with a transaction. It starts much earlier, at login, signup, app install, device change, or even a simple browsing session.

You may see one user. But behind that user, there may be a bot, emulator, fake device, stolen session, VPN network, or fraud ring testing hundreds of identities from the same device setup.

That is where device-based fraud comes in.

What exactly is device-based fraud?

Device-based fraud happens when fraudsters manipulate, hide, clone, or abuse device identity to perform fake or suspicious activity on digital platforms.

This can include fake account creation, bot attacks, account takeover, promo abuse, payment fraud, loan fraud, mule account onboarding, and transaction manipulation.

The fraudster may not always attack your payment system directly. Instead, they first create trust through the device layer.

They may use:

• Emulators to behave like mobile users
• Headless browsers to automate actions
• VPNs and proxies to hide location
• Device farms to create fake users at scale
• Stolen sessions to bypass login checks
• Repeated device resets to appear “new”

Traditional fraud systems usually look at transaction rules, KYC data, IP address, or user profile. But modern fraudsters have learned how to bypass these. The device is now one of the most important risk signals.

Different types of device-based fraud

Device fraud is not one single attack. It usually appears in multiple forms:

1. Bot-driven fraud Automated bots perform fake signups, credential stuffing, scraping, card testing, and checkout abuse. Thales’ 2025 Bad Bot Report highlights that bots are being used for account takeover and fraud-related attacks, especially in financial transactions.

2. Account takeover from suspicious devices Fraudsters log in using stolen credentials from new or masked devices. TransUnion reported a 20% global increase in suspected digital account takeover attempts from 2023 to 2024.

3. Fake account and synthetic identity creation Attackers use device farms, emulators, and automation tools to create many accounts that look genuine at first.

4. Promo, referral, and incentive abuse The same fraudster creates multiple identities from linked devices to exploit offers, wallets, gaming rewards, or referral campaigns.

5. Emulator and virtual device fraud Fraudsters simulate mobile devices to bypass app-level controls, especially in fintech, lending, gaming, and ecommerce flows.

What do the numbers say?

Device-based fraud is hard to measure as a standalone category because it overlaps with ATO, bot attacks, fake account creation, payment fraud, and identity fraud. But the indicators are clear.

TransUnion reported that suspected digital fraud globally declined to 3.8% in 2025, yet account takeover, account creation fraud, scams, and breach-related fraud accelerated. This means fraud is shifting from simple transaction abuse to identity and access-layer attacks.

LexisNexis reported that third-party account takeover attempts represented 28.7% of attacks in its Digital Identity Network, making it the top global fraud classification.

In ecommerce, LexisNexis reported a 64% year-over-year growth in ecommerce fraud attack rate, while login attacks where fraudsters try to take over accounts jumped 216%. Gaming and gambling sites saw a 76% rise in global attack rate in 2025.

For merchants, the cost is also much higher than the direct loss. LexisNexis notes that every fraudulent transaction costs merchants 3.11x the lost transaction value on average, including chargebacks, fees, and labor.

Regional and domain distribution

The risk is strongest in markets with high digital adoption, fast payments, mobile-first onboarding, and heavy ecommerce usage.

TransUnion’s 2025 report noted that India was among the markets where suspected digital fraud rates increased year over year in 2024. It also identified Brazil, Canada, Colombia, Dominican Republic, Hong Kong, India, and the Philippines as markets with elevated suspected digital fraud rates.

From an industry point of view, the highest-risk domains are fintech, banking, ecommerce, gaming, gambling, lending, wallets, marketplaces, and any platform with digital onboarding or incentives.

This is exactly why, during Cyber Security Expo India, InsightAI saw strong interest from banks, fintechs, gaming companies, and enterprises for its Device Intelligence solution.

Why is device fraud more important now?

Because fraud has moved before the transaction.

By the time a suspicious transaction happens, the fraudster may already have created fake accounts, tested cards, bypassed login checks, changed devices, built trust, and linked multiple identities.

So, fraud teams need to shift from only detecting bad transactions to detecting bad intent early.

How InsightAI protects digital platforms

InsightAI’s Device Intelligence solution helps companies detect risk at the device and behavior level before fraud converts into financial loss.

Our system collects and analyzes device signals, browser attributes, network metadata, behavioral patterns, emulator indicators, bot signals, velocity patterns, and cross-device linkages.

Why InsightAI?

Because we do not look at the device as a static fingerprint.

We look at it as a risk identity.

InsightAI connects device intelligence with behavioral analytics, fraud rules, AI scoring, and graph-based relationship mapping. This helps detect fake users, bots, mule-linked devices, account takeover attempts, repeated suspicious access, and fraud networks that normal rules may miss.

Call to action

If your platform has digital onboarding, login, payments, lending, wallet usage, referrals, or high-volume user activity, device fraud is already a risk.

Let InsightAI run a quick fraud and device-risk audit for your platform.

Book a demo or reach out at: akash@insightai.in