The Evolution Of Click Fraud: Massive Chinese Operation DormRing1 Uncovered

Comment

As long as advertisers pay for clicks, there will be click fraud. And the more people combat it, the more sophisticated the attacks become to get around the defenses that advertisers, search engines, and others put in place. But a recent click fraud ring discovered by click-fraud monitoring service Anchor Intelligence suggests that the practice is evolving to a scale never seen before.

Anchor Intelligence identified a click fraud ring being run out of China which involved 200,000 different IP addresses and racked up more than $3 million worth of fraudulent clicks across 2,000 advertisers in a two-week period. That money was never paid out and the ring has now dissipated (or moved onto another scam), but who knows how long the ring was in operation before Anchor noticed. The operation was called DormRing1 because it was centered in dorms at technical universities in China such as the Shanghai Technology Institute.

“We have seen 200 fraud rings,” says Anchor VP Richard Sim, “and this one by far trumps them all. I think it is indicative of how sophisticated the click fraud is getting. We are seeing the sheer scale and size of these rings growing.”

Click fraud occurs when someone sets up a website, signs up with an ad network, and then clicks on the ads to generate ad revenues with false clicks. DormRing1 operated the same way, except it easily involved more than 1,000 people who set up more than 10,000 Websites to spread out the fraud. The image above depicts a portion of the ring, with each red dot representing a source of fraudulent clicks with similar digital signatures. (Anchor monitors such activity on behalf of advertising clients).

Spreading the click fraud out across thousands of sites makes it harder to detect, but it also requires a lot more people to perpetrate it. DormRing1 recruited student click fraud workers on Chinese social networks where and forums participants would post images of checks they were getting for their activities. One drummed up interest by talking about his plans to buy a car with the proceeds. Just like with any criminal organization, people at the lower rungs had to do a lot of grunt work to move up the ladder of trust and money. A briefing paper provided by Anchor describes the operation:

These social networks involve a complex set of user access levels. The baseline entrance level is only available by invitation; access to sensitive information is restricted solely to those users who have attained the highest levels. Users with the uppermost levels of access are able to purchase root kits to engage in fraudulent activity and contract out phases of their fraud operations to a large network of willing participants. Users reach higher levels of access in one of two ways: either through a vouching system or by proving themselves as valuable contributors to the network through the provision of some ground level of services (e.g. contracting to create hundreds of accounts on various websites).

DormRing1 was able to use these exclusive social networks to create a division of labor in which all participants at the highest levels shared in a percentage of profits from an operation. The students involved in the ring each set up dozens of bare-bones websites, and successfully registered them with multiple ad networks. The students then hired the services of several botnet controllers to systematically click on ad links that were displayed on these sites. For each ad click, the publisher made a percentage of what the advertiser paid for that click. Through this network, the perpetrators were able to contract money mules (i.e. people with US addresses to which checks can be sent), traffic generators / botnet herders, website template developers, and a host of other service providers. After monetizing these fake websites via fraudulent ad clicks, the perpetrators then wired money to their various contractors.

Remember, we only know these details because DormRing1 was stopped. But nobody was arrested. The advertisers just stopped making payments to the fraudulent Websites. You can be pretty sure that DormRing2 is already up and running.

More TechCrunch

Welcome back to TechCrunch’s Week in Review. This week had two major events from OpenAI and Google. OpenAI’s spring update event saw the reveal of its new model, GPT-4o, which…

OpenAI and Google lay out their competing AI visions

Expedia says Rathi Murthy and Sreenivas Rachamadugu, respectively its CTO and senior vice president of core services product & engineering, are no longer employed at the travel booking company. In…

Expedia says two execs dismissed after ‘violation of company policy’

When Jeffrey Wang posted to X asking if anyone wanted to go in on an order of fancy-but-affordable office nap pods, he didn’t expect the post to go viral.

With AI startups booming, nap pods and Silicon Valley hustle culture are back

OpenAI’s Superalignment team, responsible for developing ways to govern and steer “superintelligent” AI systems, was promised 20% of the company’s compute resources, according to a person from that team. But…

OpenAI created a team to control ‘superintelligent’ AI — then let it wither, source says

A new crop of early-stage startups — along with some recent VC investments — illustrates a niche emerging in the autonomous vehicle technology sector. Unlike the companies bringing robotaxis to…

VCs and the military are fueling self-driving startups that don’t need roads

When the founders of Sagetap, Sahil Khanna and Kevin Hughes, started working at early-stage enterprise software startups, they were surprised to find that the companies they worked at were trying…

Deal Dive: Sagetap looks to bring enterprise software sales into the 21st century

Keeping up with an industry as fast-moving as AI is a tall order. So until an AI can do it for you, here’s a handy roundup of recent stories in the world…

This Week in AI: OpenAI moves away from safety

After Apple loosened its App Store guidelines to permit game emulators, the retro game emulator Delta — an app 10 years in the making — hit the top of the…

Adobe comes after indie game emulator Delta for copying its logo

Meta is once again taking on its competitors by developing a feature that borrows concepts from others — in this case, BeReal and Snapchat. The company is developing a feature…

Meta’s latest experiment borrows from BeReal’s and Snapchat’s core ideas

Welcome to Startups Weekly! We’ve been drowning in AI news this week, with Google’s I/O setting the pace. And Elon Musk rages against the machine.

Startups Weekly: It’s the dawning of the age of AI — plus,  Musk is raging against the machine

IndieBio’s Bay Area incubator is about to debut its 15th cohort of biotech startups. We took special note of a few, which were making some major, bordering on ludicrous, claims…

IndieBio’s SF incubator lineup is making some wild biotech promises

YouTube TV has announced that its multiview feature for watching four streams at once is now available on Android phones and tablets. The Android launch comes two months after YouTube…

YouTube TV’s ‘multiview’ feature is now available on Android phones and tablets

Featured Article

Two Santa Cruz students uncover security bug that could let millions do their laundry for free

CSC ServiceWorks provides laundry machines to thousands of residential homes and universities, but the company ignored requests to fix a security bug.

1 day ago
Two Santa Cruz students uncover security bug that could let millions do their laundry for free

TechCrunch Disrupt 2024 is just around the corner, and the buzz is palpable. But what if we told you there’s a chance for you to not just attend, but also…

Harness the TechCrunch Effect: Host a Side Event at Disrupt 2024

Decks are all about telling a compelling story and Goodcarbon does a good job on that front. But there’s important information missing too.

Pitch Deck Teardown: Goodcarbon’s $5.5M seed deck

Slack is making it difficult for its customers if they want the company to stop using its data for model training.

Slack under attack over sneaky AI training policy

A Texas-based company that provides health insurance and benefit plans disclosed a data breach affecting almost 2.5 million people, some of whom had their Social Security number stolen. WebTPA said…

Healthcare company WebTPA discloses breach affecting 2.5 million people

Featured Article

Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Microsoft won’t be facing antitrust scrutiny in the U.K. over its recent investment into French AI startup Mistral AI.

1 day ago
Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Ember has partnered with HSBC in the U.K. so that the bank’s business customers can access Ember’s services from their online accounts.

Embedded finance is still trendy as accounting automation startup Ember partners with HSBC UK

Kudos uses AI to figure out consumer spending habits so it can then provide more personalized financial advice, like maximizing rewards and utilizing credit effectively.

Kudos lands $10M for an AI smart wallet that picks the best credit card for purchases

The EU’s warning comes after Microsoft failed to respond to a legally binding request for information that focused on its generative AI tools.

EU warns Microsoft it could be fined billions over missing GenAI risk info

The prospects for troubled banking-as-a-service startup Synapse have gone from bad to worse this week after a United States Trustee filed an emergency motion on Wednesday.  The trustee is asking…

A US Trustee wants troubled fintech Synapse to be liquidated via Chapter 7 bankruptcy, cites ‘gross mismanagement’

U.K.-based Seraphim Space is spinning up its 13th accelerator program, with nine participating companies working on a range of tech from propulsion to in-space manufacturing and space situational awareness. The…

Seraphim’s latest space accelerator welcomes nine companies

OpenAI has reached a deal with Reddit to use the social news site’s data for training AI models. In a blog post on OpenAI’s press relations site, the company said…

OpenAI inks deal to train AI on Reddit data

X users will now be able to discover posts from new Communities that are trending directly from an Explore tab within the section.

X pushes more users to Communities

For Mark Zuckerberg’s 40th birthday, his wife got him a photoshoot. Zuckerberg gives the camera a sly smile as he sits amid a carefully crafted re-creation of his childhood bedroom.…

Mark Zuckerberg’s makeover: Midlife crisis or carefully crafted rebrand?

Strava announced a slew of features, including AI to weed out leaderboard cheats, a new ‘family’ subscription plan, dark mode and more.

Strava taps AI to weed out leaderboard cheats, unveils ‘family’ plan, dark mode and more

We all fall down sometimes. Astronauts are no exception. You need to be in peak physical condition for space travel, but bulky space suits and lower gravity levels can be…

Astronauts fall over. Robotic limbs can help them back up.

Microsoft will launch its custom Cobalt 100 chips to customers as a public preview at its Build conference next week, TechCrunch has learned. In an analyst briefing ahead of Build,…

Microsoft’s custom Cobalt chips will come to Azure next week

What a wild week for transportation news! It was a smorgasbord of news that seemed to touch every sector and theme in transportation.

Tesla keeps cutting jobs and the feds probe Waymo