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Fake user accounts costing companies millions of cash money dollars

Fake followers are doing tremendous damages to all sized companies, yet no one does much to fight back.

User accounts costing you big bucks

If your company has customers who sign up for a user account online, you may or may not have noticed that some of your account users are fake. If a recent Telesign report is any indication, you probably haven’t, and it could be costing your company big bucks and valuable customers.

The report surveyed a number of companies offering online accounts in order to assess the impact of “bad bots” and fake user accounts. The study found that fake users, also known as “bad actors,” could have a major impact on companies by damaging their bottom line, as well as their reputation. Most fake accounts are opened with the purpose of spamming real users, or stealing their personal information.

Despite all of this, brands do little to fight back

These shenanigans cause up to nine percent of the user base, and four percent of business partners and stakeholders, to bail. Sixty percent of surveyed companies indicated that bad actors had damaged their reputation. Even more startling were the costs of investigating and cleaning up after bad actors. Companies in the study blew an average of $4 million on these efforts.

Despite these high costs, most businesses are doing the bare minimum – if anything at all – to prevent or remove fake accounts. A full 43 percent of surveyed companies didn’t worry about this problem whatsoever, often because they’d rather keep their registration processes as simple as possible than add steps to ensure that users are who they say they are. While most companies require a password and email address to create an account, far fewer use specific questions, mobile phone numbers, or other bot-catching traps to verify that a new user is for real.

This means that companies, rather than preventing fake accounts, are responding after the damage is already done. More than half of companies surveyed have no official process for addressing fake accounts, and about a third don’t even bother trying to identify the fake accounts in the first place.

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What about your business? Could fake users be costing you money – and damaging your reputation? What steps are you taking to prevent or curb this problem?


Ellen Vessels, a Staff Writer at The American Genius, is respected for their wide range of work, with a focus on generational marketing and business trends. Ellen is also a performance artist when not writing, and has a passion for sustainability, social justice, and the arts.

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