The Truth About the Dark Web Fraud Trade

In observance of International Fraud Week, Terbium Labs has published research and articles concerning dark web fraud trends. Emily Wilson, our VP of Research, also recently penned a cover article for Fraud Magazine discussing the dark web fraud trade.  In the article, Emily discusses misconceptions and inaccurate portrayals of the dark web while providing a more realistic view of the dark web for the reader, utilizing real-life examples. Below are excerpts and top takeaways from her stellar, in-depth article. To read the entire piece, click here.

“The dark web, often inaccurately portrayed as a playground for hitmen and human traffickers, is a place where fraudsters leverage tools, tactics, and technology to build scalable business models, collect and co-opt sensitive data, and exploit organizations around the clock.”

The Structure of The Internet

The internet is broken into three parts, the open, deep, and dark web. Most of us use the open web and deep web daily when we browse our favorite blogs and log into social media. However, the dark web’s content is not accessible through “traditional browsers or standard browsing technology” and is designed to be hidden from search engines, preventing them from appearing on the clear web. 

Browsing and Privacy 

Users are tracked across the clear and deep web via IP (Internet Protocol) address. With this information, website owners can ‘see’ users’ physical locations when accessing their site. IP also allows tracking services to record your website visits – selling this information to marketers who develop ads that “follow” you online. Dark web browsing technology negates these issues by anonymizing traffic. The encrypted routing technology at the core of the Tor Network, an example of dark web browsing technology, circumvents IP tracking and thus adds a layer of privacy for users online. 

The Takeaway: The use of dark web browsing technology is not indicative of criminality. Users can and do utilize Tor and other tools to protect themselves on the clear and deep web too.


Why Dark Web?

As mentioned above, to access and browse the dark web, browsing technology, like the Tor network, is utilized. VPNs, Tor browsers, and even operating systems are leveraged to protect the user from being tracked and identified. 

Hundreds of communities exist on the dark web, from healthcare to politics, the dark web ecosystem hosts a diverse number of entirely legitimate and legal websites, organizations, e-commerce platforms, and social forum. 


“Research conducted by Terbium Labs in 2017 showed that 47.7% of site content across Tor hidden services is legal — other numbers in the industry closely match this stat.”


Privacy Enables Criminality but Not on Purpose

While the anonymity enjoyed by dark web users serves as a foundation for the thriving dark web fraud economy, the dark web also acts as a shield for persecuted groups, persons under oppressive regimes, and whistleblowers. 

The Takeaway: The dark web, practically, is a privacy tool created to protect users’ identities while they traverse the internet for various reasons. Cybercriminals are leveraging the dark web to build hidden e-commerce platforms that specialize in the trade of your stolen data, counterfeit goods, and multiple services. These e-commerce platforms are powered by the demand for and availability of sensitive data. 


The Mammoth Dark Web Fraud Trade

Dark web e-commerce platforms or marketplaces have been developed by criminal communities to facilitate the trade of illicit goods and services. The article talks of the success of these marketplaces, their evolution, and takes a detailed look at the most popular listings across these platforms. Drugs are #1, but information to assist in fraudulent activity is #2.  

Marketplace Structures

In 2011, the now-infamous Silk Road Marketplace launched – becoming the first market to combine privacy, ensuring dark web technology and transactions utilizing anonymous cryptocurrency. Silk Road, in its success, became the model for “all future marketplaces,” employing familiar site structures for users. Users on Silk Road would have a similar experience to those purchasing goods and services on legitimate and legal platforms like eBay or Amazon. When it comes to fulfillment, dark web vendors – particularly those involved in the trade of fraud, use auto-delivery mechanisms to ensure delivery of stolen information to buyers, 24 hours a day. There are also independent shops – many of which are dedicated entirely to the sale of stolen payment card data. These independent shops offer volume discounts for their customers and allow buyers to filter offerings based on criteria like an expiration date.

It’s A Matter of Trust, Kind Of

Dark web marketplaces rely on “mutual anonymity and reputation.” Vendors encourage their customers to leave positive reviews, which in turn, give vendors “trust level” rankings, which, much like Amazon and Alibaba. Vendors with higher rankings capture more market share.

Marketing and Community

Dark web fraud vendors utilize fraud forums for a number of activities. Within these forums, fraud vendors promote their wares and services, while also interacting with prospects. These forums also serve fraudsters, those purchasing the stolen information. Fraudsters use forums to request specific goods, services, and sometimes seek partnerships to assist in fraud schemes. 

“Economic patterns as traditional commerce: New vendors enter the scene promising differentiated value from their competitors, established shops announce holiday sales and new inventory, and buyers — determined to destroy the reputation of the responsible vendors — take to the platform expounding negative experiences and scams.”

The Darkweb economy also follows traditional economic patterns and subscribes to capitalistic principles like laissez-faire. Laissez-faire principles explain that while governments have no place in business decisions, there still must be a form of police to make decisions on disputes. Reliant on mutual anonymity and trust, marketplaces on the dark-web are selling your data as quickly as Amazon sells you Prime. Instant fulfillment, 24 hours a day. 

Takeaway: The Dark Web Fraud Trade has grown out of the evolution of dark web marketplaces like Silk Road. These markets utilize familiar shopping experiences like 24/7 fulfillment, filter capability, and user reviews and primarily sell drugs and stolen information. Secret forums and exchanges, dedicated to stolen information used for fraud schemes, are smaller and independent. The forums serve the fraud community by allowing the promotion of stolen wares and connecting criminals; smaller boutique carding markets offer volume discounts to super fraudsters. 

To learn more about the dark web fraud trade, you can read the full article here. To learn more about Matchlight, the world’s first and only totally private solution for challenges in digital risk protection, schedule a demo.

Enjoy this read? Terbium Labs publishes research on digital risk protection and other topics in information security.