Proxies is a type of web connection that helps users bypass the network filtering system by changing the user’s IP address. It is also known as anonymous IP that serves towards hiding the web user’s actual IP address and physical location. The Proxy server acts as a gateway between the user and the internet. Though the question arises why we need proxies? One of the main answers to this question is privacy, as proxies will allow you to use the internet anonymously because it hides your IP address.
Understanding Anonymous IP
Let us understand this with an example: Suppose a purchase is made from Nigeria using a VISA Business card from the United States. Now, this sounds suspicious for card issuers and shop owners. The shop owner can take actions to verify or decline the transaction. A fraudster will then use an anonymous IP address to pretend that the purchase is made from the payment card owner’s location.
Also, once any payment or transaction is made on the internet, the purchaser’s IP address is logged in. The IP address carries a lot of sensitive information. An IP address can easily identify the used computer in the crime, address where the computer is used, and even the computer owner. After any cybercrime occurs, the first step taken by investigation agencies is to track the IP address. The fraudsters use proxies to hide their actual location so that they can avoid criminal charges.
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Types of Proxies
All internet devices carry a unique IP address to communicate with other resources on the internet. Now to stay anonymous on the internet, we use a proxy. The proxy has its own IP address, which provides users anonymity online. The common types of Proxies are:
- Transparent Proxies are the weakest proxy among the listed ones. It acts as a server that intercepts the connection between the device and the internet. While using this proxy, the user’s actual IP address is revealed. The hackers or fraudsters use advanced proxies, which makes it harder to identify them. Parents and employers usually use these proxies.
- Data Center Proxies known as artificial proxies are stored in data centers all around the world. They are popular among businesses that practice business scraping. These proxies are fast and offer stable performance, but websites can identify them and block access to their websites. It is the reason that for more challenging targets, businesses prefer using Residential Proxies.
- Residential Proxies are legal IPs, which means that their real IPs are attached to a physical location. These proxies offer a low block rate which is why they are widely used.
- Anonymous Proxies are comparatively more complex to detect than transparent proxies. It is a proxy server that acts as a privacy shield between computers and the internet. It provides a partial level of anonymity but is still detected and even traced by some websites. These anonymous IPs are a powerful tool for surfing the net online without leaving users traces. Fraudsters mostly use it to create fake accounts.
- Elite Proxies, also known as high anonymity proxies, provide complete anonymity to its users. These connections do not reveal themselves as proxies through connection signatures, so they are highly used by fraudsters to commit cybercrime. When someone connects to this proxy, the server receives no information about the actual IP address. Moreover, it can’t even detect that fraudsters made the connection through a proxy.
- VPN stands for Virtual Private Network. VPN also connects you to a remote computer online, but it is not exactly a proxy. Though VPNs do reroute the traffic via a remote server by hiding your IP address. They redirect all traffic from browsers and background applications. VPNs encrypt the traffic moving between your device and web by routing your connection through a chosen server instead of your ISP. VPNs are usually faster than proxies.
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How Proxies are Used
Proxies are not only used for engaging in fraudulent activities, but instead, their primary purpose was to be used for a better good. Based on the functionality, proxies are used in:
- Individuals and businesses use proxy servers to access the internet more privately.
- Proxy servers help to increase the speed and save bandwidth on a network by compressing the traffic.
- Proxies help in blocking malware, spyware, and other forms of viruses from infecting the systems. We often think of proxy as a way of bypassing the filters. However, Proxy servers help filter out malicious websites.
How Do Fraudsters Use Proxy?
We know by now that proxies provide partial and even complete anonymity to users. The fraudsters use them to protect their identity before conducting any cybercrime.
The proxy effectively hides their true identity and makes them appear as someone else with a unique email address and location. It is easier to commit fraud without being detected, as hackers will appear as different users every time.
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What should be done to fight against proxies?
Almost 97% of fraudulent transactions take place because of the usage of proxy. It is essential that if you have a way to identify and block such spoofing services.
iDenfy provides you with the most accurate and needed Proxy detection services that check the anonymous IPs to help you get involved in any fraudulent activity. The proxy detection is done in the background, enabling the user to continue with their tasks without getting disturbed. Algorithm detects all types of proxies and blocks the user who does not have access to or tries to reach your website or content. This tool provides you with the most accurate protection even if the hacker is hiding their geo-location.
We provide you with the risk score by detecting the anonymity of an IP in real-time. It will help you on how to proceed with the next steps of the particular transactions. Our algorithm detects all sorts of compromised connections and risky users that ensure that only users from approved locations get access to your services.
The detection and protection against fraud have become significantly important in our modernized society. We all are a potential target for cybercriminals when we involve ourselves in any online transaction. However, this does not imply that doing transactions online or using internet-enabled apps is not safe. It’s just that we need to look out for ourselves so that we do not get trapped by any fraudulent activity. To protect your businesses and their users, you should have a proxy detection methodology against online fraud.