How Developers Can Prevent Fraud and Stop Scammers

As a developer, you work hard to create amazing applications and deliver value to your users. The last thing you want is for fraudsters and scammers to exploit your hard work for nefarious purposes. Unfortunately, as our world becomes increasingly digital, the threat of fraud in software development continues to rise.

Fraud can be broadly defined as any deceptive scheme designed to steal money, data or other assets. In the context of software, this often takes the shape of scammers tricking developers into giving up sensitive information, injecting malicious code into applications, or leveraging vulnerabilities for unauthorized access and data theft.

The consequences can be severe, from reputational damage and financial losses to regulatory penalties and erosion of user trust. According to IBM‘s Cost of a Data Breach Report 2021, the average cost of a data breach reached $4.24 million per incident, up 10% from the previous year. Verizon‘s 2021 Data Breach Investigations Report found that 86% of breaches were financially motivated and 10% were driven by espionage.

Bar chart showing increase in average total cost of a data breach from $3.86 million in 2020 to $4.24 million in 2021
Source: IBM Cost of a Data Breach Report 2021

As custodians of the software that powers our digital economy, developers have a critical role to play in preventing fraud and protecting users. A study by WhiteSource found that over 70% of applications have a security flaw in an open source component. Meanwhile, Contrast Security reports that 62% of applications contain at least one serious vulnerability on first scan.

The threat is only growing, with the global cost of cybercrime predicted to hit $10.5 trillion annually by 2025 according to Cybersecurity Ventures. As Sean Regan, Chief Product Officer at Akamai sums up:

"Not only are web attacks becoming more frequent, they are also getting more difficult to detect. Cybercriminals keep discovering new ways to break applications to steal data."

Common Scams Targeting Developers

So how exactly do scammers target developers? Let‘s break down some of the most common tactics:

Phishing Attacks

One of the oldest tricks in the book, phishing involves sending fraudulent emails or messages disguised as legitimate communication. These often contain malicious links or attachments designed to steal credentials or install malware. 96% of phishing attacks come via email according to Verizon‘s DBIR.

Developers are prime targets, as gaining access to your development environment or code repository could allow attackers to inject malicious code that compromises your application and its users. Check out this real example of a phishing email posing as a job opportunity to harvest developers‘ GitHub credentials:

Screenshot of phishing email impersonating CircleCI job opportunity
Source: Alyssa Miller on Twitter

Malware Injection

Even if you‘re too savvy to fall for a phishing lure, scammers have plenty of other ways to get malicious code into your systems. This could involve compromising the package managers, libraries, and build tools you rely on.

One infamous example is the ESLint-Scope incident, where an attacker compromised the NPM account of a popular package maintainer. They then published malicious versions of the package which attempted to steal the NPM tokens of developers who installed it and use them to propagate the infection further.

In another supply chain attack, someone forked the ua-parser-js library, added malicious code, and then disguised it as a patch. The malicious code exfiltrated data by sending HTTP requests to the attacker‘s server whenever the package was loaded by a server-side Node app.

Social Engineering

Social engineering refers to manipulating people into divulging sensitive information or taking a risky action. Scammers might pose as legitimate clients, colleagues or authority figures, using urgency and pressure tactics to override your better judgment.

A recent trend is the "pig butchering" scam where fraudsters spend weeks or months building a relationship with a victim – often on dating apps or social media – before convincing them to invest in a phony cryptocurrency platform and stealing their money.

Fraudsters target developers to gain inside information and access that can later be used for account takeover, blackmail, espionage and more. They may ask you to share sensitive details about your company‘s security practices, pressure you into sending code samples, or even convince you to install "helpful" tools that are really malware.

Bot Attacks

Not all fraud targets humans directly. Scammers also deploy hordes of automated bots to exploit vulnerabilities in applications, often leveraging compromised credentials or brute force attacks. This could allow them to scrape sensitive data, inject spam content, or even take over user accounts.

The 2021 Imperva Bad Bot Report found that 25% of web traffic comes from bad bots. The most common bot threats include account takeover, content or price scraping, scalping, sockpuppet armies, carding and denial of service.

Pie chart showing breakdown of bad bot traffic by type
Source: Imperva Bad Bot Report 2021

As a developer, it‘s critical to harden your application against these bot attacks. Some steps include:

  • Blocking known bot hosting providers and proxy services
  • Using CAPTCHAs, browser fingerprinting and other challenges
  • Analyzing user behavior to identify anomalies
  • Setting rate limits on logins, searches, uploads etc.

Best Practices for Fraud Prevention

Now that we‘ve covered some of the key threats, let‘s dive into specific steps you can take as a developer to prevent fraud and protect your users.

Implement Strong Authentication and Access Controls

One of the most fundamental principles of application security is ensuring that only authorized users can access sensitive data and functionality. This starts with implementing strong authentication mechanisms such as multi-factor authentication (MFA) and secure password policies.

The National Institute of Standards and Technology (NIST) recommends MFA for all accounts, and major providers like Google and Microsoft claim it blocks 99% of automated attacks. When implementing MFA consider using time-based one-time passwords (TOTP), hardware security keys, or biometrics in addition to passwords.

Equally important are granular access controls that follow the principle of least privilege, giving each user only the permissions they need to do their job. Use role-based access control (RBAC) to define clear user roles and map them to specific privileges. Regularly audit permissions and remove any that are unused or unnecessary.

Validate and Sanitize User Inputs

Never trust user input! Any data that comes from an untrusted source, whether that‘s a web form, API request or file upload, could potentially be malicious. As a developer, it‘s your responsibility to validate and sanitize all input before processing it.

Validation means checking that data conforms to expected formats and allowed values. For example, if you expect a user‘s age, validate that the input is a positive integer between 0 and 120. If you expect an email address, validate that it matches the proper format. Here‘s an example of validating an email with a regular expression in JavaScript:

function validateEmail(email) {
    const re = /^(([^<>()[\]\\.,;:\s@"]+(\.[^<>()[\]\\.,;:\s@"]+)*)|(".+"))@((\[[0-9]{1,3}\.[0-9]{1,3}\.[0-9]{1,3}\.[0-9]{1,3}\])|(([a-zA-Z\-0-9]+\.)+[a-zA-Z]{2,}))$/;
    return re.test(String(email).toLowerCase());
}

Sanitization means removing or escaping any potentially malicious characters or code snippets from the input. For example, if you are displaying user-generated content on a webpage, you need to sanitize any HTML to prevent cross-site scripting (XSS) attacks. In general, prefer whitelists (only allow known safe values) over blacklists (block known bad values).

Here‘s an example of sanitizing HTML with the DOMPurify library:

import DOMPurify from ‘dompurify‘;

const clean = DOMPurify.sanitize(dirty_html);

Encrypt Sensitive Data

Encryption is a powerful tool for protecting data both in transit and at rest. As a best practice, any sensitive information such as passwords, financial data or personally identifiable information (PII) should be encrypted using strong, industry-standard algorithms like AES-256.

When transmitting data over the network, always use secure protocols like HTTPS and SSL/TLS to protect against eavesdropping and tampering. Enable HTTP Strict Transport Security (HSTS) to ensure all connections to your domain use HTTPS.

For data at rest, consider using full disk encryption, database encryption and field-level encryption for the most sensitive items. Properly manage encryption keys and follow the OWASP Cryptographic Storage Cheat Sheet for guidance.

Remember, encrypting data is necessary but not sufficient for security. You also need to ensure the integrity and availability of the data, as well as secure the systems and networks it traverses.

Monitor for Suspicious Activity

Even with strong preventative measures in place, it‘s still possible for fraud to slip through the cracks. That‘s why it‘s important to continuously monitor your application for signs of suspicious activity, such as:

  • Abnormal spikes in traffic or errors
  • Users logging in from unexpected locations or devices
  • Repeated failed login attempts, especially using leaked credentials
  • Unusually large or frequent payments or fund transfers
  • Sudden changes in a user‘s language or behavior

By setting up automated alerts and having a plan in place to quickly investigate and respond to potential incidents, you can minimize the impact of any fraud that does occur.

Some tools to consider for monitoring include:

  • Security information and event management (SIEM) platforms like Splunk or ELK
  • Web application firewalls (WAFs) like Cloudflare or Imperva
  • Fraud detection solutions using machine learning and behavioral biometrics
  • Endpoint detection and response (EDR) tools like CrowdStrike or SentinelOne
  • Intrusion detection systems (IDS) like Snort or Suricata

Train and Collaborate with Your Team

Developers don‘t work in a vacuum. Preventing fraud and securing applications requires a collaborative effort with product managers, operations teams, security engineers and everyone else involved in the software development lifecycle.

As a developer, strive to build good security habits in yourself and spread that mindset within your team. Some steps to reinforce security culture include:

  • Request secure coding training and workshops, ideally tailored to your specific stack and use cases
  • Integrate automated security scans into your IDE, build tools and CI/CD pipelines
  • Contribute to shared libraries of approved dependencies, packages and configurations
  • Regularly review code, conduct penetration tests, and share postmortems of incidents
  • Shadow the security team to understand their tools and processes and see incidents from their perspective
  • Act as a security champion for your team and speak up about risks in design and architecture meetings
  • Share articles, research, and breakthroughs in the security community and seek opportunities to contribute

Don‘t be afraid to reach across team boundaries and pull in expertise from compliance, risk management, privacy and other departments. The stronger your cross-functional relationships, the easier it becomes to respond quickly to threats and make security a shared responsibility.

Conclusion

Fraud prevention is a critical responsibility for anyone building software in today‘s digital landscape. As a developer, you have the power to make a real difference by implementing strong security controls, staying alert to potential scams, and continuously educating yourself about evolving threats.

The techniques and best practices we‘ve covered in this article are a great starting point:

  • Understand the common types of fraud targeting developers, from phishing and malware to social engineering and bot attacks.
  • Implement technical best practices like strong authentication, least privilege access, input validation, encryption, and activity monitoring.
  • Stay vigilant for red flags like unsolicited messages, pressure tactics, impersonations, and unverified links or attachments.
  • Take a proactive, layered approach to fraud detection using tools like WAFs, anti-bot solutions, SIEM, IDS and more.
  • Foster a culture of security awareness and collaboration within your team and across the organization.

Remember, security is an ongoing journey. No one is 100% protected, but by taking the right precautions you can dramatically reduce the risk and impact of fraud. Heed the wise words of cybersecurity pioneer Bruce Schneier:

"Security is a process, not a product. Products provide some protection, but the only way to effectively do business in an insecure world is to put processes in place that recognize the inherent insecurity in the products."

So keep learning, keep innovating, and keep fighting the good fight. Together, we can build a more secure and trustworthy digital world for everyone.

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