What’s the difference between multi-accounting and account creation fraud?

Account creation fraud encompasses any scheme undertaken by a fraudster to create an account, using methods such as fake documents, incorrect data, or deepfakes. What matters here is that the account itself is created illegally. Multi-accounting involves any scheme designed to ensure that one individual or a group of people possess multiple accounts. Here, real data and real individuals (such as mules) may be involved. In essence, account creation fraud can be exploited by scammers to generate multiple accounts for their own use, which they can then use for multi-accounting fraud.

How are multiple accounts detected?

Sumsub’s Fraud Network Detection tool can identify multi-accounting fraud by detecting suspicious activities and grouping users into networks. This is achieved by establishing connections between them based on similarities such as IP address, identical selfie backgrounds, matching locations, and similar proof of address.

How can we prevent multi-accounting?

Businesses can prevent multi-accounting by implementing robust identity verification measures and employing advanced anti-fraud solutions that detect and flag suspicious patterns and activities—such as Sumsub’s Fraud Network Detection solution. Additionally, incorporating features like biometric authentication, behavior analysis, and real-time monitoring can enhance the effectiveness of prevention strategies. Businesses can also strengthen their stance against multi-accounting by explicitly stating in their Terms of Use that such practices are forbidden.

Anti-fraud

Mar 22, 2024

6 min read

Multi-Accounting: What Industries are Under Threat and How to Stop It (2024)

Businesses often underestimate the consequences of multi-accounting. Let’s find out when it can become an expensive issue and how to prevent it.

Aline Fade

Content Manager

Mark saw that his favorite carsharing service was offering lucrative discounts for new customers. He decided to take advantage of this promo by creating another account. Is this a crime?

What Mark did isn’t exactly fraud, but if the service prohibits multi-accounting, he certainly violated the terms and conditions. Similar instances of account misuse can be seen across multiple online industries, such as e-commerce, gambling, betting, gaming, dating, travel, and food delivery.
Multi-accounting has indeed surged in recent years, along with other forms of online fraud. So let’s dive into multi-accounting, how it’s perpetrated, and the fraud-related implications.

What is multi-accounting?

Multi-accounting is when a single user registers multiple accounts to take advantage of an online service. This can be done to repeatedly benefit from free trials, discount codes, and other bonuses—or to continue using the service after getting banned.

Multiple accounts may seem benign. For instance, people can often have both public and private social media accounts. But when it comes to online services, multi-accounting can be used for a range of fraud (which we’ll cover in more detail below). For this reason, companies that detect multiple accounts being created or accessed from a single device should raise a red flag.

Many companies explicitly prohibit having more than one account, but some users find ways to get around these restrictions. In fact, you can find tips on this practice on forums and Youtube videos, which offer detailed explanations on how to multi-account without getting caught.

Multi-accounting methods

Multi-accounting methods range from basic to complex:

Creating multiple accounts from the same IP address and device using a new email address. This is the simplest method of multi-accounting. Users don’t have to be tech-savvy, but more advanced ones may use a VPN.

Gnoming. This is a more complex method used by professional gamblers after getting limited or banned by bookmakers. They create new accounts, usually with the personal data of close friends and family. In more sophisticated cases, gnomers use emulators, virtual machines, and deceptive IPs to create new accounts.

Using fake or stolen identities. More experienced fraudsters convince KYC operators that they’re entirely new customers by using stolen data, fake identities, or IDs forged from original documents.

Using deepfakes. Deepfakes use machine learning (ML) algorithms to create convincing representations of people or objects. In the wrong hands, this technology can be used for a wide range of fraud, including the creation of synthetic identities and documents for multi-accounting. Detecting and countering deepfake networks pose significant challenges, necessitating advancements in technology.

According to Sumsub’s 2023 Identity Fraud Report, there was a10x increase in the number of deepfakes detected globally across all industries last year, with notable regional differences. This included a 1740% deepfake surge in North America, 1530% in APAC, 780% in Europe, 450% in MEA and 410% in Latin America.

As AI tools are getting cheaper and easier to use, they become an even greater fraud risk. But AI is also the solution to this growing problem.. Deepfakes always contain certain visual or audio artifacts that are absent in authentic media—and they can be traced with the help of AI/ML.

Examples of multi-accounting fraud

There are various reasons why people conduct multi-accounting. Some are relatively harmless, but others involve more serious fraud, such as money laundering.

Promotion abuse. This is when customers take advantage of a business’s discount codes, sign-up offers, and other bonuses. Such campaigns aim to attract new audiences, and certain individuals attempt to trick the system by taking more than their fair share.

Suggested read: Promo Abuse Fraud—How to Avoid It

Affiliate fraud. Some services offer referral bonuses if users invite their friends. By creating multiple accounts, users can collect affiliate and signup bonuses without actually increasing the customer base of the service. Affiliate fraud often involves bot farms and incentivized traffic techniques.

Circumventing limits/bans/blocklists. This is one of the most common reasons why users create new accounts under a different name. This enables those previously blocked over bad credit histories, driving records, or gambling bans to continue using restricted services.

Fake customer reviews. Multiple accounts can be used to write false reviews, which affects the integrity of online ratings and ultimately brings down customer trust.

Smurfing. This is when a high-level online gamer creates a new account to play against lower-ranked players. Skilled players use smurfing to get points or improve their tactics without risking their main account. This results in unbalanced matchmaking, which can ultimately drive away gamers.

Money muling and multi-accounting

Money muling is when individuals with a clean banking history and no criminal record, known as money mules, are recruited to transfer illicit funds, disguising their origin. According to Sumsub’s 2023 Identity Fraud Report, money muling networks are one of the top-5 global fraud trends.

Money muling is also a form of multi-accounting fraud, where a ‘herder’—whether a single fraudster or an organization—manages multiple accounts of mules typically employed for money laundering.

Detecting mules is highly challenging, as almost 100% of the time, their documents are valid and their accounts are clean. Therefore, to identify this type of crime, businesses should utilize an advanced anti-fraud solution with transaction monitoring, anomaly detection algorithms, and behavior analysis.

What businesses are affected?

Any business can become a multi-accounting target, but the following industries are most likely to suffer:

Peer-to-Peer Services

These are decentralized platforms where buyers and sellers transact directly with each other. People use such platforms to sell things, offer services, and post tasks for qualified professionals. Fraudsters can create multiple accounts to swindle others—for instance, by selling counterfeits or asking for ‘prepayment’ and disappearing with the money. If unchecked, these practices can cause the marketplace or service to lose a significant number of customers.

E-commerce

In recent years, online marketplaces have become targets for promotion abuse and affiliate fraud. This refers to the repeated use of sign-up bonuses, referral bonuses, and vouchers from multiple accounts.

iGaming

Multi-accounting has been a huge problem for gaming and gambling platforms since unscrupulous players can enrich themselves by selling accounts and certain resources. For instance, players can sign up on multiple accounts to amass free gifts intended for newcomers and resell them.

Betting

Bettors can use multiple accounts in order to conduct arbitrage betting, a practice otherwise known as “arbing.” This refers to a strategy in which bets are placed on multiple outcomes to guarantee a profit. Arbing is legal but bookmakers don’t welcome this practice because it costs them money. However, it’s often challenging for bookmakers to identify and track arbers.

Travel services

Fraudsters can use multiple accounts to write fake reviews, which travelers heavily depend on when booking their vacation. Accordingly, a single negative review can be costly for any travel company. Multi-accounting is also used for fake bookings to get onboarding perks. What’s more, there are fake accounts resembling travel agents who then swindle would-be travelers.

Dating services

The online dating industry is full of romance scammers and fraudsters that use multiple accounts. In 2022, around 70K people in the US reported a romance scam to the Federal Trade Commission. Overall reported losses hit a striking USD 1.3 billion, with the median reported loss being USD 4.4K. This underscores the persisting vulnerability of the industry.

For instance, Simon Leviev, the famous tinder swindler, created several fake identities to date with dozens of women around the world. Then he managed to establish lines of credit and loans in their names, ultimately leaving them holding the bills.

In the aftermath, scammers created plenty of fake ‘Simon Leviev’ accounts as The Tinder Swindler went viral. They make money from fake fundraising campaigns created to allegedly support Leviev’s victims.

How to prevent multi-accounting

Multi-accounting prevention requires flexible and secure verification, where honest users are let in while fraudsters and bonus hunters are kept out. While not all multi-accounting should be seen as necessarily fraudulent, businesses can still use advanced solutions to decide if it should be stopped or not.

To mitigate the risk of multiple account misuse, Sumsub offers advanced AI-powered solutions, including:

Liveness Detection: This involves biometric analysis of the user’s face and facial movements to ensure their true presence during the check.

First, the user goes through the liveness check upon account registration. Then, the system uses the results to determine whether this user already exists in its database. This way, advanced face authentication solutions can help businesses ensure that users are genuine individuals—and not just the same person with an endless number of accounts.

Fraud Network Detection: This solution continuously analyzes user behavior at every stage of the customer lifecycle, including onboarding, AML-screening, and transactions. Fraud Networks Detection can easily detect multi-accounting through IP address analysis, behavioral biometrics, and device fingerprinting, ensuring user authenticity. Fraud Network Detection helps companies with significant traffic and high volumes of applicants in the banking, trading, crypto, gambling, e-commerce, and social media industries.

Fraud Network Detection prevents:

Multi-accounting by unveiling connections between accounts
Deepfake scams
Bot farms
Incentivized traffic

FAQ

What’s the difference between multi-accounting and account creation fraud?

Account creation fraud encompasses any scheme undertaken by a fraudster to create an account, using methods such as fake documents, incorrect data, or deepfakes. What matters here is that the account itself is created illegally. Multi-accounting involves any scheme designed to ensure that one individual or a group of people possess multiple accounts. Here, real data and real individuals (such as mules) may be involved. In essence, account creation fraud can be exploited by scammers to generate multiple accounts for their own use, which they can then use for multi-accounting fraud.
How are multiple accounts detected?

Sumsub’s Fraud Network Detection tool can identify multi-accounting fraud by detecting suspicious activities and grouping users into networks. This is achieved by establishing connections between them based on similarities such as IP address, identical selfie backgrounds, matching locations, and similar proof of address.
How can we prevent multi-accounting?

Businesses can prevent multi-accounting by implementing robust identity verification measures and employing advanced anti-fraud solutions that detect and flag suspicious patterns and activities—such as Sumsub’s Fraud Network Detection solution. Additionally, incorporating features like biometric authentication, behavior analysis, and real-time monitoring can enhance the effectiveness of prevention strategies. Businesses can also strengthen their stance against multi-accounting by explicitly stating in their Terms of Use that such practices are forbidden.