How Mobile Ad Fraud has Evolved in the Year of the Pandemic

The past 18 months have arguably been the most turbulent on record for the mobile industry. The majority of the world spent significant portions of 2020 under some kind of lockdown, with pressure mounting on mobile operators to keep us connected to the outside world, and with each other. This pressure was felt most acutely in emerging markets such as South Africa, Brazil and Indonesia where users depend almost exclusively on their mobile phones to interact with the online world. Perhaps that’s why, according to a new report published by Upstream, they seem to be the epicenter of a new mobile malware pandemic.

Mobile ad fraud has always been a challenge for network operators in all parts of the globe, but the pandemic has made users more vulnerable than ever before due to the sheer amount of time they now spend with their devices. This vulnerability is only heightened in countries where mobile phones are the primary vehicle for accessing educational resources, government services, news broadcasts, entertainment and shopping. For many of these markets data credit is like currency, something that can be taken literally for “unbanked” users who use their data to buy goods and services through direct carrier billing.

Bad actors are all too aware of this, and we’ve seen a surge in malware activity and sophistication as a result. Secure-D, Upstream’s full-stack anti-fraud platform, currently works with 35 operators in 23 emerging markets to block and identify fraudulent apps and keep users safe. As part of its ongoing efforts to curb malware and raise awareness of new and evolving threats, Secure-D released an in-depth 2021 report called A Pandemic On Mobile: Mobile Ad Fraud & Malware which revealed some vital and surprising insights. The report drills down into how ad fraud and malware have advanced in the wake of the pandemic, often disproportionately targeting developing regions.

The data in the report is based on 840 million mobile subscribers worldwide. One of the most staggering findings was that 95% of all mobile transactions during the pandemic were identified and subsequently blocked as fraudulent. These transactions originate from fraudulent apps posing as legitimate ones, often purchasing premium subscriptions or other content in the background without the user’s direct knowledge or consent. Naturally, this would result in a very high volume of complaints and refund requests to the operator were the transactions not identified and blocked at source. According to the report, which is now freely available, more than 45,000 malicious apps were in circulation in these emerging markets throughout the pandemic, many of them employing new sophisticated tactics to get onto people’s handsets and trigger fraudulent transactions. For the first time ever, mobile games were the number one most targeted app category, but malicious apps took on the form of many other productivity apps and tools, from video editors to fake news apps.

The most suspicious app of the entire pandemic was “com.android.fmradio”, a radio player app that was single-handedly responsible for 99.8 million fraudulent transactions, all of which were caught and blocked by Secure-D. The app was downloaded by 356,270 devices worldwide but is thankfully no longer available on the Google Play store.

To gain more insight like this, such as a breakdown of the most dangerous apps by region, which countries were most impacted by fraud during the pandemic, and how direct carrier billing fraud works, you can get a copy of the report mailed directly to your inbox here.