A majority of companies (82%) struggle with the problem of fake users, and 43% admit to allowing them into their ecosystem to avoid friction in the user registration process, according to a new report from Ponemon Institute sponsored by TeleSign.
The 584 U.S. and U.K. survey respondents said user convenience (58%), cost efficiency (52%) and ease of use (42%) are the most important factors in an organization’s authentication strategy, with security at a distant fourth at 21%. Overwhelmingly, companies value ease of use over security against fraudsters, which makes them vulnerable to the threat of fake users.
Meanwhile, cyber crime is costing the global economy hundreds of billions of dollars each year, according to the study, “The Fraud Report: How Fake Users Are Impacting Business.”
“Fake users are one of the first steps in the chain of crime, impacting consumers and businesses both directly and indirectly through acts of fraud, theft of information and control of data,” Larry Ponemon, chairman and founder of the Ponemon Institute, said in a statement.
“Through a variety of illicit acts, these cyber criminals damage the global economy to the tune of billions of dollars a year, but companies that take preventative measures can make a difference,” Ponemon says.
Larger companies in the study have spent as much as $14 million to respond to spam or fraud committed by fake users, with an average cost of $4 million per company. A majority (60%) of those costs are going toward repairing damage to brand and reputational.
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