Fake accounts and refund abuse biggest fraud challenges gig economy faces

Incognia has released the Gig Economy Edition of its annual Frontline Report, which ranks the biggest fraud challenges faced by global food delivery and ride-hailing companies in 2024.

Incognia’s findings show that fake accounts were employed in 57 percent of driver-side fraud cases, while refund and promotion abuse were tied as the top consumer-side fraud with 48 percent.

In a particularly notable case, Incognia analyzed a fraudster who created 800 fake accounts to make use of new user coupons, making off with 1.5 percent of the total redeemed coupon value that month. Another case showed how a bad actor accessed 400 different accounts on a single device to take advantage of thousands of dollars worth of promotions in 30 days.

“Fraudsters are becoming more sophisticated, relentlessly targeting gig economy platforms with advanced fraud techniques that erode user trust and degrade the overall experience,” said André Ferraz, co-founder and CEO of Incognia.

Incognia also found that refund abuse accounted for nearly half (48 percent) of consumer-side fraud, while it affects nearly 50 percent of merchants worldwide, according to the MRC 2024 Global eCommerce Report. A noteworthy case Incognia identified was a single Samsung device that accessed more than 200 accounts to fraudulently return over $5,000 worth of stolen merchandise. The fraudster could then resell the items to further their profits.

“This report exposes the broader fraud landscape affecting gig platforms,” Ferraz added. The full report can be found here, which outlines further the types of gig economy fraud and what merchants can do to protect themselves.

At the end of 2024, food delivery platform Grubhub partnered with Incognia to leverage the company’s fraud prevention technology to increase security, and which resulted in greater order profitability and decreased care costs.

Article Topics

biometrics  |  fraud prevention  |  identity verification  |  Incognia