Residential proxy networks pay consumers to use their home Internet connections for a nominal fee, making them look like real people online. This allows threat actors to obfuscate where attacks are coming from by not appearing as suspicious or malicious – unlike traffic that is sourced from data centers which can be easily detected and blocked.

Detecting unmasked residential proxies is essential for businesses to prevent fraud, protect operations and enforce policies. Fraudsters, hackers and other bad actors use these proxies for scalping (abusing promotions) and other illicit activities. By combining effective proxy detection with other fraud prevention measures, such as user behavior analysis, VPN identification and anomaly detection, businesses can create robust barriers against these types of abuse.

How to Unmask Residential Proxies: A Step-by-Step Guide

The proliferation of residential proxies is a significant challenge for businesses and security engineers. By using a residential proxy, bad actors can bypass detection and restrictions placed on them. For example, if they are using a home connection with a legitimate address, a website may not ban them or limit their access because it sees the user as a valid customer. However, the same user can be a fraudster in disguise, using malware to inject residential IP addresses and committing a variety of fraudulent activities.

DoubleVerify has seen many examples of fraudsters leveraging residential IPs to commit different kinds of schemes, including account takeover, gift card fraud, ad fraud and crawling government or other websites in search of personal information such as Social Security numbers or driver’s license numbers. To prevent these types of schemes, businesses should look for a provider that ethically sources its proxies and is highly scalable and performant.