Recently privacy and information security research firm Ponemon Institute published some research that took a look at the impact of fake users on businesses and the impacts on consumers. “The Fraud Report: How Fake Users Are Impacting Business” highlighted the average economic value of a company’s user base ($117M) and the financial and brand reputation damage that can be done if fraudsters are allowed to create fake accounts.
The research, undertaken alongside mobile identity vendor TeleSign, found that 82% of companies face some issues with fake users in their systems. More worrying was the fact that 43% of respondents admitted allowing fake users into their ecosystem in an effort to avoid user registration friction. Respondents reported user convenience (58%), cost efficiency (52%) and ease of use (42%) as the most important factors to an organization’s authentication strategy with security at a distant fourth (21%). Overwhelmingly, companies value ease of use over security against fraudsters, making them vulnerable to the threat of fake users.