How does promo abuse work?
Multi-accounting is a key tactic used in promotion abuse fraud, where individuals create and use multiple accounts to exploit promotional offers repeatedly.
This type of fraud usually involves an individual creating multiple fake accounts and using malicious tools or tactics to scale up quickly, sometimes across multiple different associated websites and/or competitors.
What tools can be used to abuse promotions?
Fraudsters are savvy and make the most of every tool available in their arsenal. However, there are some particular tools that are used more frequently than others.
Emulators & App Cloners
Tools such as app cloners and emulators allow fraudsters to run multiple instances of the same app on a single device or across different virtual devices simultaneously. This enables them to create numerous fake accounts in a short period.
VPN, Proxy or Tor
Fraudsters use VPN, Proxy servers or Tor browsers to hide their true IP addresses, making it difficult for platforms to trace and block suspicious activities. This enables them to obscure their location and avoid detection when creating and managing multiple accounts.
Once the fraudsters have created thousands of fake accounts from a single device, they use these accounts to repeatedly take advantage of promotional offers. For companies, the cost of promo abuse goes beyond lost revenue.
Bots
Given the goal of such campaigns is focused on converting users, if a fraudster is able to create a good script, they can wreak havoc.
Bots can inflate advertising costs with fake clicks, and enable a single bad actor to abuse a promotion on multiple accounts.
They also distort any data that might be used for analytics, which in turn makes it difficult to separate real engagement from fake engagement, leading to misguided or worse, harmful marketing decisions in the future.
What are the consequences of promo abuse for a business?
There are multiple issues that stem from bonus abuse. It skews marketing metrics, inflates user growth numbers with fake accounts, and diminishes the effectiveness of promotions.
All of this adds to a potentially major loss of revenue and creates distrust among legitimate customers, affecting brand reputation.
This kind of fraud is particularly common in industries that rely heavily on promotions to attract and retain customers, such as marketplaces, e-commerce, iGaming, gaming, online delivery, and mobility.
What types of promotions are vulnerable to promo abuse?
There are three promotions in particular that are especially prone to promo abuse fraud. All three of these listed are good marketing tactics to attract new users and establish customer loyalty early on.
However, without proper planning and oversight of the risks that come with running such campaigns, they can become a low-hanging fruit for fraudsters.
- Sign-up bonuses: These bonuses act as a reward offered to new customers as an incentive to try out a company's products or services. This can include discounts on a first purchase, free samples, or other special perks designed to attract new users.
- Vouchers: Online businesses frequently leverage voucher codes for various promotions, including limited-time discounts aimed at increasing sales or free delivery options to help prevent cart abandonment.
- Referral bonuses: The aim of this promotion to encourage current customers to bring in new users by referring their contacts to sign up for a service. In this setup, the customer takes on the role of a promoter, earning rewards, often in the form of a discount on their next purchase, for successfully bringing in new sign-ups. In many cases, both the existing customer and the new one receive a benefit from the referral.
What industries are most at risk of promo abuse?
Industries that aim to onboard a large number of new users are most likely to see attempts of promo abuse. These include:
iGaming
In the world of sports betting, casino and iGaming, sign-up bonuses are a major promotional tool to entice new players. These bonuses usually come in different forms, and here’s how they work:
- Welcome bonus: Offered to new customers on signing up or making their first deposit
- No deposit bonus: A bonus given to new players just for registering, without requiring a deposit.
- Free spins: These are specifically for slot games in online casinos, giving players a certain number of spins without having to wager their own money. They are often part of a welcome package or ongoing promotions.
Online delivery
Online delivery companies frequently offer one-time promotions, such as "$10 off your first order," to attract new customers.
Also, vouchers are widely used by online delivery services to encourage first-time orders or repeat business, with discounts on first orders, free delivery, or "buy one, get one free" deals a common theme.
Crypto
Crypto apps often offer promotions as part of their user acquisition efforts. For example, a referrer would be rewarded with one token for every new user referred.
With this type of offer, fraudsters could create hundreds of fake accounts to rake in tokens with real monetary value. Given the emphasis on privacy in cryptocurrency, this could be quickly laundered and siphoned away to larger criminal syndicates.
Gaming
Sign-up bonuses in gaming are more about boosting user engagement rather than offering cash rewards. These bonuses often come in the form of in-game currency or items, such as:
- In-Game currency bonuses: When players sign up for a new game or platform, they might receive bonus in-game currency (e.g., coins, gems, or points) to spend on upgrades, characters, or other in-game items.
- Exclusive items or characters: Some games offer exclusive items, skins, or characters as a sign-up bonus to entice new players.
Ride-Hailing
Ride-hailing and mobility-as-a-service businesses often offer one-time promotions, such as first-ride-free, to entice new users away from any competitors.
Say a fraudster is able to emulate their phone as a different device and sign up using this code, they are able to then take advantage of the free journeys or begin developing a wider collusion fraud scheme.
E-commerce stores & Marketplaces
E-commerce platforms use referral bonuses to attract new customers through existing ones. These bonuses are often in the form of discounts or store credits for both the referrer and the new customer.
For example, an online store might offer a $20 discount voucher to both the referrer and the new customer when the referred individual makes their first purchase.
These platforms also use vouchers to offer discounts, free items and shipping, or promotional offers. These may be distributed via email, social media, or partnerships.
If a fraudster has access to multiple drop points with different addresses, certain fraud systems, especially without device fingerprinting capabilities, could miss the connection.
The company would then be unknowingly giving potentially free products to the same person, abusing the promotion for their own gain.
What are obvious signs of promo abuse fraud?
While fraudsters often use sophisticated techniques to avoid detection, there are still key warning signs that businesses should be aware of to protect themselves from fraudsters exploiting promotional offers.
By keeping an eye on these signs, businesses can better detect and mitigate promo abuse.
- Multiple accounts from the same device: Usually, promo abuse fraud is associated with a single device being operated by the fraudster. Whether it’s ten thousand accounts or seven accounts linked to the same device, this user behavior is reason enough to warrant further investigation.
- Rapid account creation: Multiple accounts being created from the same device, IP address, or within a short period of time. This often indicates the use of automation tools, like emulators or app cloners, that allow fraudsters to set up fake accounts at scale.
- Repeated use of promo codes: The same promo code being used across multiple accounts or transactions is a telltale sign of fraudulent behavior.
- Irregular IP addresses: Multiple accounts accessing the platform from the same IP address or a small range of IP addresses.
- Unusual purchase patterns: Large volumes of purchases made in a short period, often immediately after a promotion is launched.
- Inconsistent customer data: Customer data that doesn’t match up, such as users registering with the same IP address but using different names, email addresses, or payment methods.
- High rate of chargebacks or cancellations: An increase in chargebacks, canceled orders, or refund requests from accounts that have redeemed promotional offers. Fraudsters may redeem promo codes for items and then dispute the transaction with the payment provider.
- Inactive or low-engagement accounts: Accounts that were created solely to take advantage of a promotion, but show little to no engagement with the platform afterward. For instance, a new user might make a purchase using a promo code but never return to the platform.
How to protect against promo abuse in 2025
Promo abuse fraud can be challenging to trace without robust fraud detection and prevention measures in place. Since this type of fraud begins with the creation of fake accounts, it's essential to identify the devices accessing the platform.
From there you can analyze indicators of suspicious behaviors such as unusual device information, network data, behavioral patterns, and historical trends. If accessible in real time, you can take actionable insight right away and begin to block access before any damage is done.
By running a cost analysis on previous campaigns with the right fraud prevention software, businesses will soon learn how crucial it is to effectively combat this threat.
How SHIELD works to stop promo abuse
Our Device-First Fraud Intelligence platform acts as the first line of defense for any business looking to stop promo abuse. It focuses on device identification and intelligence. By identifying the root cause of fraud with SHIELD ID (the device).
The technology identifies and labels devices to highlight links to multiple user accounts, which often is an indication that a fraudster or fraud ring is attempting to exploit promotions.
These device IDs are resilient against manipulation tactics such as factory resets and advanced tampering techniques.
From there, it gives a risk manager actionable fraud intelligence in real-time to help them swiftly detect and eliminate promotion abuse.
Fraud Intelligence continuously profiles device sessions, returning when a good user turns bad. This feature exposes the tools and tactics used by fraudsters to commit promo abuse, such as:
- GPS spoofers, VPN and proxy: used to spoof locations and avoid detection when creating and managing multiple accounts.
- Emulators and app cloners: used to create thousands of fake accounts at scale to conduct promo abuse.
