How Location Fingerprinting Can Thwart Fraud

Exact location collection technology gives it an edge over traditional device fingerprinting.

Written by Andre Ferraz
Published on Oct. 02, 2023
How Location Fingerprinting Can Thwart Fraud
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Traditional device fingerprinting, once an effective method for device identification and recognition, has lost its touch. Its accuracy depends on the specific attributes used to create it, for instance device model, operating system, IP address, browser version and screen resolution. 

What Is Location Fingerprint Technology?

Location fingerprint technology uses device intelligence and hyper-precise location analytics to create device identification. It is able to identify devices even if they have been altered some way, for instance after a factory reset. 

User privacy concerns and implemented related changes done by operating systems, however, have made it more challenging for developers to collect device attributes. New device models and the widespread use of VPNs, emulators and other tools have further complicated device identification. 

Additionally, fraudsters have become increasingly sophisticated, employing tactics to manipulate or disguise device attributes, undermining the reliability of device fingerprinting technology. As a result, relying solely on traditional device fingerprinting is no longer as effective as it once was in fighting fraud and is impairing businesses’ ability to detect fake account creation (also known as multi-accounting), promotional abuse and account takeover (ATO). With device fingerprinting being less stable, more and more companies are struggling to recognize and block repeat offenders reliably. 

But bad actors often scale beyond one device, making it even more difficult to track their fraudulent behavior. In fact, our internal data shows that approximately 61 percent of fraudsters operate from the same location but use multiple devices.

Given this, the need for strong device identification solutions has never been more urgent, which is why location fingerprint technology was built. With precise location analysis, it ensures that fraudsters cannot cover their tracks by either resetting their device or using multiple devices, which leads to better protection for all digital businesses. 

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What Is Location Fingerprinting? 

Location fingerprinting combines device intelligence and hyper-precise location analytics to create the next generation of device identification. This innovative technique relies on a number of attributes to form a distinct profile for each device, which is then transformed into a hashed value that functions as a unique device ID.  

The main difference between device fingerprinting and location fingerprint is the latter’s integration of exact location collection technology, which is the culmination of over a decade of research and development. Unlike traditional device fingerprinting, location fingerprinting identifies devices even if they have been altered in some way, for example, after a device has been factory reset, which restores all attributes to the factory settings making it appear like a new device. In sum, the addition of exact location data creates a more persistent device recognition signal than a fingerprinting solution using traditional identification methods. 

 

How Effective Is Location Fingerprinting? 

The effectiveness of location fingerprinting depends on the ability to accurately verify location. To do so, the solution creates distinctive signal environments using a combination of signals, including GPS, Wi-Fi and Bluetooth. These signal environments are contextualized based on the device’s behavior. As a result, location fingerprinting can identify 99.9999 percent of devices solely based on their location behavior.

Additionally, the solution can re-identify devices even after factory resets, detect spoofing, app and device tampering, and proactively block based on a watchlist of suspicious locations. By associating devices by their location, the solution recognizes hidden fraud patterns, further enhancing its customer’s ability to prevent fraud. 

Given the power of location behavior, location fingerprinting requires the collection of fewer device attributes than traditional solutions, streamlining the identification process. This makes the technology more stable than other solutions that rely on device data, as they rely on more attributes, which are vulnerable to changes by the operating systems.

 

Benefits of Location Fingerprinting 

With this new solution, businesses could benefit from a false positive rate of 0.01 percent, along with a 95 percent reduction in identity fraud at onboarding. This is a significant improvement over traditional methods, which often struggle with higher error rates, particularly during the onboarding stage. 

ATOs have been a persistent thorn in the side of businesses, leading to substantial financial losses. Location fingerprinting tackles this issue head-on by identifying suspicious behavior patterns, significantly reducing the incidence of ATOs. The result: businesses can expect a 90 percent reduction in financial losses associated with account takeovers.

 

Alternatives to Device Fingerprinting

Fraud prevention is most effective when several solutions are layered together to create a better mousetrap. Depending on the problem to be solved, one solution may be more effective than the other. For example, behavioral biometrics, a technique that analyzes unique user behavior patterns, like typing speed, mouse movements and touches, is more effective at identifying new account fraud because bad actors tend to demonstrate similar behaviors when applying for an account using a fake identity, such as moments of hesitation and the use of copy and paste. In contrast, phone verification through one-time-passcodes (OTPs) is better suited to prevent and detect account takeover attempts than they are to identify a fake account. 

The most effective fraud prevention strategies don’t exclusively rely on device-specific information, but they incorporate solutions that verify multiple factors, including historical user behavior, real-time device context and device integrity. 

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Next-Gen Device Security 

As traditional device fingerprinting struggles to keep pace with evolving fraud tactics, location fingerprint technology provides a robust and innovative solution. By blending device intelligence with precise location data, this new technology creates unique profiles, allowing for more secure identification. With its effortless implementation and remarkable results, location fingerprinting may just be the future of device security. 

As traditional device fingerprinting struggles to keep pace with evolving fraud tactics, location fingerprinting is quickly being recognized as a valuable tool in the fight against fraud. By detecting location spoofing, it restricts fraudsters to a smaller geographical area, making it harder for them to operate. Additionally, it enables accurate tracking of multiple devices linked to the same individual or organization.

While no security measure is completely foolproof, the addition of exact location data gives location fingerprinting an edge that requires bad actors to work even harder. This next-generation technology promises to be the future of device security, offering advanced protection against the ever-evolving threat landscape.

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