Fake Signups Are on the Rise — Here's What Small Business Owners Should Know

If it feels like your new “customers” sign up and ghost you faster than a bad Tinder date... you might be dealing with bots.

In this publication, we're spotlighting a growing threat small businesses can no longer afford to ignore: fake signups. It's not just a numbers game — it's a direct hit on your business's reputation, resources, and security.

A new report from Okta reveals that 46% of all customer signups in 2024 came from bots, not humans. These fake accounts are more than just annoying — they’re often the front line of much bigger cyberattacks.


How It Works:

  1. Bots flood your signup forms pretending to be real customers.
  2. They collect promo codes, hoard free trials, and test your system for weaknesses.
  3. Some bots "age" accounts over weeks so they appear legit — then strike.
  4. In some cases, bots overload your system entirely, causing slowdowns or full-on crashes (a DoS attack).

It’s like handing out VIP wristbands at a party... only to realize half the guests are robots in trench coats.


Who’s Targeted:

  • Small businesses with customer signup forms, free trials, or loyalty programs
  • E-commerce and retail sites — the most affected sector in 2024
  • Financial and professional services — prime targets for data-hungry bots
  • Any business offering discounts, early access, or account perks

If you're collecting emails, offering a signup bonus, or just trying to grow your customer base — you're on the radar.


Real-Life Example:

Okta’s report found that retail and e-commerce companies saw fake signups outnumber real ones 120 to 1 at their peak. In April 2024 alone, one day saw 93% of signups as fake. And it’s not just retail — bots are hitting everything from fintech to furniture brands.


Why You Should Care:

Letting bots into your system is like leaving your back door unlocked:

  • They skew your analytics — making it hard to know what’s working in your marketing
  • They drain your promotions — burning through trial offers, coupons, and points
  • They endanger your customers — testing passwords and hunting for data
  • They slow or crash your site — frustrating real customers
  • They prep for larger attacks — like account takeovers or data breaches

And with AI-powered bots, it’s even harder to tell the fake from the real.


How to Protect Yourself:

• Use CAPTCHAs smartly — Only show them when activity seems suspicious, not every time.

Block shady IPs — Use security tools to detect and automatically block traffic from sketchy locations.

• Rate-limit signups — Cap how many accounts can be created from a single IP/device.

• Add a Web Application Firewall (WAF) — A great line of defense for your site.

• Streamline secure logins — Use passkeys or one-tap logins instead of long forms.

• Install bot protection tools — Modern tools use behavior tracking to spot and block bots in real time.


Quick Tips:

Quick Tip: Notice a bunch of signups from odd email addresses or the same IP? Bots may already be inside.

Pro Tip: Don’t just rely on basic form validation — pair it with behavioral tools that monitor patterns bots can’t fake.


Stay safe, stay informed.


Definitions of Key Terms

  • Bot: A software application that runs automated tasks — often used by cybercriminals to mimic real users.
  • Fake Signups: False account registrations, typically created by bots to exploit promotions or test systems.
  • Denial-of-Service (DoS) Attack: A cyberattack where systems are overloaded with traffic to disrupt operations.
  • CAPTCHA: A tool used on websites to distinguish human users from bots.
  • Web Application Firewall (WAF): A security system that filters and monitors HTTP traffic to and from a web application.
  • Passkey: A password-free login method that uses biometrics or device-based authentication.
  • Rate-Limiting: A technique to control the number of requests a user can make to a server over a certain time.

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