Why Bot Protection Matters

In the digital era, websites are increasingly vulnerable to a variety of automated threats. These threats, executed by malicious bots, can lead to significant financial losses, data breaches, and compromised user experiences. To safeguard against these risks, it is imperative for websites to implement robust bot protection. This article explores the necessity of bot protection by examining key threats, including scalping, scraping, carding, fake account creation, bonus abuse, and Layer 7 denial-of-service (DoS) attacks. We will also discuss the financial impact of these exploits and suggest effective defensive measures.

Understanding the Threats

Scalping: Automated Bulk Purchasing

Scalping involves bots purchasing high-demand items in bulk, often during limited-time sales, to resell them at inflated prices. This practice can lead to inventory shortages and frustrate genuine customers.

• Example: During the PlayStation 5 launch, scalping bots bought up consoles within seconds, leading to widespread shortages.

Scraping: Unauthorized Data Extraction

Scraping refers to the automated extraction of data from websites, often for competitive intelligence or unauthorized use. Malicious scraping can result in data theft and intellectual property violations.

• Example: LinkedIn faced legal challenges over unauthorized scraping of user profiles by third-party companies.

Carding: Testing Stolen Credit Cards

Carding involves using bots to test stolen credit card information on e-Commerce sites to determine its validity. Successful attempts can lead to fraudulent transactions.

• Example: Ticketmaster was targeted by a carding operation, resulting in unauthorized ticket purchases.

Fake Account Creation: Generating Bogus Profiles

Bots create fake accounts on websites for spam, fraud, or manipulation purposes. This can overwhelm systems and degrade user experiences.

• Example: Facebook reported removing billions of fake accounts to combat misinformation and spam.

Bonus Abuse: Exploiting Promotions

Bonus abuse occurs when bots exploit promotional offers, such as sign-up bonuses, by creating multiple accounts to claim rewards. This can lead to financial losses.

• Example: Online gaming platforms have reported bonus abuse, where bots exploit offers to gain unfair advantages.

Layer 7 Denial-of-Service: Overloading Application Resources

Layer 7 DoS attacks focus on overwhelming application-level resources by sending a high volume of requests, leading to service disruptions.

• Example: A major financial institution faced a Layer 7 DoS attack, causing significant outages.

The Financial Impact of Bot Attacks

1. Revenue Loss: On average, businesses lose 4.3 percent of their online revenues annually due to bot traffic. This translates to approximately $85 million for a typical enterprise. This loss can stem from various types of bot attacks, including scalper bots, credential stuffing, and fake account creation.
2. E-Commerce Sector Vulnerability: In the e-Commerce sector, 72 percent of websites and 83 percent of mobile apps reported being attacked by bots in the past year. Notably, 89 percent of these businesses took two to six months to realize they had been targeted by scalper bots, which are particularly damaging. Scalper bots can lead to lost sales and inventory issues, as they often purchase high-demand products before legitimate customers can.
3. Impact on Promotions and Stock Management: Over half of the e-Commerce businesses surveyed indicated that they ran promotions based on data that was later found to be inaccurate due to bot activity. This mismanagement can lead to overstocking or understocking, further impacting revenue.
4. Operational Costs: Bot traffic can increase operational costs significantly. For instance, businesses may incur additional infrastructure expenses to handle the excess traffic generated by bots. A case study highlighted that one retailer identified 84 percent of traffic to their product API as malicious, leading to unnecessary resource allocation.
5. Customer Support Costs: Bots can also lead to increased customer support costs. For example, when bots lock users out of their accounts or create fraudulent transactions, businesses may face a surge in customer support calls. The average cost of a support call can be substantial, further straining resources.
6. Customer Churn and Satisfaction: Bots negatively impact customer satisfaction, with 88 percent of businesses reporting that bots affected their customer experience. This can lead to increased churn rates, as dissatisfied customers may choose to take their business elsewhere. The financial implications of losing customers can be severe, especially when considering the lifetime value of a customer.
7. Long Detection Times: It typically takes businesses about four months to detect bot attacks, during which time they may continue to incur losses. This delay in detection can exacerbate the financial impact as companies may not be aware of the ongoing damage until it is too late.

Bot net traffic is a key problem for businesses of all kinds and specific to its impact on the bottom line.

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Jamison Utter

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November 12, 2024