When someone is using a proxy, they are connecting to the internet through a server that allows them to hide their IP address and their true location. This allows them to access content that would be blocked in their home country or to use a service that offers them free internet access while hiding their identity. This is often done to avoid security risks or to access websites that are otherwise unavailable in their area.
Proxy detection software is used to identify proxies, VPNs and other suspicious connections that may be compromised or have malicious intent. These tools work by analyzing several critical attributes of the internet connection, including the real and virtual IP addresses, detecting whether the traffic is proxy Tor exit node or a proxy hosting provider, identifying the characteristics of the internet service being used and checking for suspicious data center locations and open ports.
There are some simple, standalone proxy detection services proxy detection software that allow you to check a single IP address against a database of known proxies and VPNs. However, most of these are not very accurate and are usually based on a list that is frequently out of date and does not include the latest versions of popular proxies and VPNs. There are also more comprehensive fraud scoring services that can detect proxies and other suspicious connections by scanning a much wider range of data points. These services often incorporate a combination of forensic analysis, blacklisting, honeypots and traps, a large database of known proxies and VPNs, and client feedback loops.
In addition to proxy detection, some of these tools can also detect TOR and other malicious connections. This helps with spotting bot activities that attempt to bypass automated fraud rules by using residential proxies to disguise their true location and identity. They also detect proxies that are marketed as being undetectable because they use private, residential IPs rather than public ones and have other unique features such as ping backs that make them difficult to spot by conventional proxy detection methods.
Identifying and blocking these proxies can be very helpful in the effort to combat fraud, manage bandwidth and keep employees focused on their tasks. Some businesses even use a proxy detection tool to block access to social media sites or other distracting websites that can derail productivity and cause a loss of revenue.
For ecommerce and retail, the most important feature of a proxy detection solution is its ability to prevent fraudulent transactions. These tools are designed to detect a wide variety of types of fraud, including credit card fraud, account takeover, and other types of online sales scams. The best solution combines proxy detection with risk score, device identification and other advanced fraud analysis techniques. This provides a more complete view of the customer and their intentions, making it possible to filter out potentially fraudulent traffic before it is able to negatively impact the business. For example, a proxy detection system that is able to detect TOR and other types of malicious connections can help with preventing payment fraud by blocking these transactions from being approved.