Mischief Managed: Mitigating Metaverse Fraud

Organizations are racing to make their name in a virtual world of limitless possibilities. According to  Meta and Microsoft, the metaverse could “reach a billion people, host hundreds of billions of dollars of digital commerce, and support jobs for millions of creators and developers” within the next decade.

If virtual and augmented reality is the future, how can we expect to be safe from security threats like metaverse fraud and account takeover?

Impressively immersive but still far from perfect

Despite all the metaverse's potential, promise, and disruptive qualities, it remains a highly unregulated environment fraught with risk. Metaverse companies experience 80% more bot attacks and 40% more human attacks than other businesses. There’s also rising concern about fraud and deception in the metaverse since avatars are used to talk and interact in the metaverse. Researchers from Lancaster University and UC Berkeley found that humans can no longer tell the difference between AI-generated faces and real, human ones, making users more susceptible to attacks from illicit actors exploiting these weaknesses.

The metaverse promises a safe, and secure shared digital reality, powered by revolutionary technology. However,  organizations must begin building a robust infrastructure to combat risks and security threats in order to realize that future potential. For example, companies should invest to ensure they gather  proper sets of training data to build better-performing Machine Learning models that can accurately uncover trends in harmful activities. 

To venture or not to venture?

That is indeed the question. As daunting as it is, companies that want to compete in the future must take some initial steps into the metaverse today. Early adoption can allow for deeper experience and insight as the metaverse continues to gather momentum. While early investors have the capacity to stay ahead of the competition, companies that invest too late may risk falling behind. Much like the retail phenomenon during the height of the pandemic, brands that lacked a robust digital presence suddenly found it urgent to innovate.

For some industries, the metaverse in its current form is well-suited and ready for big ventures:

• Gaming
  According to a study by Ernst & Young, 97% of executives say that the gaming industry is going to be central to the development of the metaverse, and its advancement would likely benefit other non-gaming companies that are looking to engage in the 3D world. Several video games have already adopted metaverse concepts and techs, such as immersiveness and 3D avatars—Second Life, Minecraft, and Fortnite, to name a few—and more gaming companies are already investing in research and development to further the development of video games in the metaverse.
  
• Media and Entertainment
  Media consumption and creation will become transformative in the immersive worlds of the metaverse. Artists, influencers, and entertainment companies are already looking for ways to engage their audiences with the immersive experience. Disney, for example, sees the metaverse as the “next great storytelling frontier,” making it part of the company’s priorities.
  
• eCommerce and Retail
  Looking at the astronomical rise of eCommerce in recent years, virtual shopping and mixed realities could revolutionize the retail experience. Several brands already utilize 3D and augmented reality tech to drive more value to their consumers. In fact, a department store reported their product return rates decreased from the usual 5-7% to less than 2% after implementing augmented reality (AR) and virtual reality (VR) product visualization.

While we know the general goal and where it’s supposed to be headed, the vision for what the metaverse will become remains largely unknown. Brands may be heading into the metaverse ill-equipped for future challenges—after all, it’s a digital wild west situation—that’s why it’s imperative to prepare before plunging into the unknown.

The Dark Side of the Metaverse

The metaverse may be new, but the platform's illicit actors have decades of experience in digital mischief and mayhem. Fraudsters and scammers have figured out ways to conduct nefarious activities and will continue to look for ways to do it on future platforms.

• Account Takeover
  In the crypto community, account takeover is becoming increasingly common. Fraudsters use phishing attacks to access accounts and swipe their victims’ wallets contents with little to no repercussion or enforcement.
  
• Malware/Hardware Hacking
  Because of the very nature of the metaverse’s concept and infrastructure, the necessity of wearable hardware and virtual avatars allows for a more intimate look into a user’s real life. These devices could collect sensitive personal data such as biometric information that cyber hackers want to target.
  
• Personal Identifiable Information (PII) Theft
  A user could be approached by a seemingly friendly avatar inviting them to a unique room, only to later discover a metaverse fraudster attacking them to gain access to their digital wallet and information. Users may be more likely to trust interactions with others in the metaverse due to certain characteristics of avatars, making them more vulnerable to these kinds of attacks.
  
• Data Collection
  For some, the metaverse raises privacy concerns due to the amount and nature of personal data collected and shared on these platforms. The wearable hardware used to access the metaverse could be used by companies to collect sensitive information such as eye-tracking, blood pressure, heart rate, and more. Unlawful collection, distribution, and manipulation of such data poses serious concerns that could risk companies losing consumer trust.

Mitigating Metathreats

The security and compliance risks in the metaverse are heightened by the level of personal data being shared by its users. Integrating a robust risk and response system that covers everything from fraud detection to regulatory compliance is the key to creating a resilient platform in this new realm.

At TaskUs, we understand the need to stay a step ahead and constantly innovate new technology, techniques, and training methodologies. Our ridiculously smart teammates are behind the scenes manually reviewing, sorting, and deciphering data to quickly and efficiently uncover trends in harmful activities. We also have investigators in place to monitor any signs of fraud and respond to user-reported incidents.

• KY-Everything
  With a suite of KYC, KYB, KYT, and additional identity verification offerings, we safeguard and expedite platform onboarding by verifying the identity of new users, platform sellers, merchants, and other third parties.
  
• Enhanced Due Diligence
  We supercharge due diligence for business and higher-risk customers by combining automation and omnichannel capabilities to verify data such as ultimate ownership.
  
• Fraud Detection
  We have workflows, automation, and case management tools to process chargebacks and disputes, validate transactions, and address account takeover troubles.

We believe it takes both a highly trained team and cutting-edge technology to create the strongest risk and response methodologies to battle cyber criminals. While we may not outnumber digital bad actors, we will always find ways to outsmart them.