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Fraud and the Internet of Things

Jul 06, 20173 mins
Internet of ThingsSecurity

We must stay vigilant about security.

0 iot intro smart appliances
Credit: Thinkstock

During the past few years, the Internet of Things (IoT) has become one of the hottest movements of our time. Although many technology trends and buzzwords come and go overnight, it’s clear that the IoT is here to stay. Almost half of the world’s population is online, and technology is a deeply integrated part of our lives. Smart thermostats regulate our business and household temperatures, connected cameras watch over our homes and pets, online TVs and speakers respond to our every need, and intelligent devices constantly monitor our health.

According to Gartner, the number of world-wide Internet connected devices will grow to 11.4 billion by 2018. It’s a phenomenal trend that will continue to spread until human and machine connectivity becomes ubiquitous and unavoidably present.

Of course, anything that develops this rapidly will bring a lot of growing pains, and the IoT is no exception. Security hazards are one of the largest concerns. The market has emerged so quickly that manufacturers have hastily created insecure products in their rush to bring goods to market. Security has received very little, if any attention. Despite this lack of security and the inherent dangers it brings, we continue to buy and deploy these smart gadgets. As Amy Webb, futurist and CEO at the Future Today Institute proclaims: “Technology can be like junk food. We’ll consume it, even when we know it’s bad for us.”

There’s little doubt that the growth of insecure IoT devices will increase fraud. We’ve already seen numerous attacks against point of sales terminals and ATM machines. Recently, we witnessed how self-propagating malware can infect IoT devices in mass. In October 2016, nearly 150,000 smart security cameras were infected with malware as part of the Marai attack. In that particular assault, the compromised cameras launched a denial of service attack against the internet’s backbone, but the target could just as easily have been financial service organizations.

Today’s cybercriminals are organized, smart, and well equipped. They have the funding and resources to infect millions of IoT gadgets with disruptive mechanisms, spyware, password snatchers, legitimate device imitators, and a host of other nasty contraptions.

The only way to effectively protect ourselves is to stay continually vigilant and stay up to date with the latest knowledge and the most advanced security and fraud prevention tools.  The threats are dramatically changing, and if we want to minimize our risks of being attacked, we must be willing to change and adapt as well.


Rahul Pangam is co-founder and CEO of fraud-detection startup Simility, which has $7.2 million in seed funding led by Accel Partners and Trinity Ventures and dual headquarters in Palo Alto, Calif., and Hyderabad, India.

Founded in 2014, Simility is already analyzing millions of transactions per week for customers on four continents as part of a limited beta release of its online fraud-detection platform.

Prior to Simility, Rahul was a director at Google, where he led a global team of 200 that reduced fraud in ads by 90 percent. He is a fraud-detection industry veteran, having spent more than six years at Google building teams responsible for fighting fraud and abuse in Google’s ads and its local and social products.

Prior to Google, Rahul was a lead engineer at General Electric, working on GE’s smart grid software products.

Rahul holds an MBA from the University of Michigan and M.S. in electrical engineering from Clemson University.

The opinions expressed in this blog are those of Rahul Pangam and do not necessarily represent those of IDG Communications Inc., or its parent, subsidiary or affiliated companies.