The existence of fake users online is nothing new. We have all come across them at one time or another. What few people realize however is just how malicious and damaging these fake users can be for businesses. Beyond just a nuisance, fake users are actually costing businesses millions of dollars, and the problem continues to grow.
In an effort to unveil the scope of registration fraud and how this epidemic is impacting companies and their users, we have launched a new report, “The Fraud Report: How Fake Users Are Impacting Business.” What we found is that an incredible 82 percent of businesses struggle with fake users, and these fake users are wreaking havoc on brand reputations and real users every day.
Further, we found that a key reason behind this growing issue is that businesses are prioritizing convenience over security during the account registration process. Forty-seven percent even admit to knowingly allowing fake users into their platform in favor of not adding friction to the registration process, and as a result their user base is declining in value by as much as 47 percent. With the average user base valued at $117 million, that can mean a loss of as much as $55 million!
But there is hope. With new products like TeleSign Auto Verify empowering businesses to add security to the account registration process without having to sacrifice convenience, the threat of fake users can one day be a thing of the past. With the elimination of fake registrations, not only can a company save on repair costs (up to $14 million with large companies), they can actually increase the value of their user base by up to 44 percent, or $52 million.