{"id":77597,"date":"2026-01-26T05:04:19","date_gmt":"2026-01-26T05:04:19","guid":{"rendered":"https:\/\/dralysstore.com\/blog\/?p=77597"},"modified":"2026-01-26T05:04:19","modified_gmt":"2026-01-26T05:04:19","slug":"the-fraud-hiding-in-email-signups","status":"publish","type":"post","link":"https:\/\/dralysstore.com\/blog\/the-fraud-hiding-in-email-signups\/","title":{"rendered":"The Fraud Hiding in Email Signups"},"content":{"rendered":"
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Ecommerce merchants know the costs in time, revenue, and inventory of illicit chargebacks.<\/p>\n

For many sellers, however, the damage starts with new accounts. Organized fraudsters may sign up hundreds of times, employing valid but fake email addresses.<\/p>\n

\u201cThose fake accounts are being created for purposes like card testing with small-value transactions to see if the number is valid before attempting a bigger transaction,\u201d said Diarmuid Thoma, the head of fraud and data strategy at AtData, an email verification and validation service.<\/p>\n

Chargebacks<\/h3>\n

The primary risk to ecommerce shops comes from chargebacks<\/a>.<\/p>\n

When a cardholder disputes a fraudulent transaction, the store loses the sale, the product, shipping costs, and often incurs additional fees from processors.<\/p>\n

Repeated disputes may even jeopardize the business\u2019s relationship with its payment processor.<\/p>\n

A seller can feel helpless, since the processor authorized<\/a> the transaction in the first place, but holds shops responsible for accepting stolen card numbers.<\/p>\n

Thoma and other email fraud experts believe fake email addresses are often where the problem begins.<\/p>\n

Coupon Abuse<\/h3>\n

A second form of email-based fraud often shows up in ecommerce marketing data.<\/p>\n

Fraudsters use fake but valid email addresses to create accounts at scale to extract promotional value.<\/p>\n

Automated scripts submit thousands of signups, collect welcome discounts, and then abandon the accounts once the incentive is redeemed.<\/p>\n

\u201cA coupon has a monetary value, and when you do it at scale, it becomes a highly profitable business to use and resell,\u201d said Thoma.<\/p>\n

The losses from coupon abuse are massive, as much as $89 billion per year, depending on the source, and likely impacting most ecommerce businesses that offer promotional discounts.<\/p>\n

Fake Accounts<\/h3>\n

Thus fake email addresses facilitate stolen payment card testing and promotion harvesting.<\/p>\n

This sort of behavior can be relatively difficult to detect, because \u201cabout 98% [of the email addresses used], even the fraudulent ones, will be valid,\u201d Thoma said, \u201cbecause the fraudster needs them to be valid\u201d to receive a coupon and complete a purchase.<\/p>\n

In other words, the earliest phase of this kind of ecommerce fraud often looks identical to that of well-meaning shoppers. By the time the first chargeback appears, the damage has existed for weeks.<\/p>\n

Conversely, it gives businesses a relatively simple defense: email validation.<\/p>\n

Account Patterns<\/h3>\n

Creating fake accounts at scale starts with email addresses that follow recognizable patterns, allowing fraudsters to generate thousands of variations while bypassing basic validation checks.<\/p>\n

For example, here are three common patterns.<\/p>\n

Tumbling,<\/strong> where a fraudster rewrites a single underlying address many times.<\/p>\n