What is a VPN (Virtual Private Network)?
A VPN (Virtual Private Network) is technology that creates encrypted connections over the internet, routing traffic through intermediary servers to mask users' real IP addresses and locations. VPNs encrypt data between the user's device and VPN server, providing privacy from ISPs and networks. While VPNs serve legitimate privacy needs, they also enable fraud by hiding attackers' true locations. Fraudlogix IP Risk Score, IP Blocklist, and VPN Checker detect VPN usage for fraud prevention.
How VPNs Work
When you connect to a VPN, your device creates an encrypted tunnel to a VPN server. All internet traffic routes through this tunnel before reaching destination websites. Websites see the VPN server's IP address instead of yours, effectively masking your location and identity. The encryption protects data from interception by ISPs, network administrators, or attackers on public Wi-Fi.
VPNs operate at the network layer, capturing all traffic from your device. This differs from proxies which typically handle only browser traffic. Commercial VPN services maintain server networks across multiple countries, allowing users to appear as if they're connecting from different locations by selecting different servers.
VPN Protocols
VPNs use various protocols for establishing connections and encrypting data. OpenVPN is widely considered secure and reliable, using strong encryption standards. WireGuard is a newer protocol offering faster speeds with modern cryptography. IKEv2/IPSec excels at maintaining connections during network changes, popular for mobile VPN apps. Legacy protocols like PPTP and L2TP are outdated and should be avoided.
Protocol choice affects speed, security, and detectability. Some protocols are easier to detect and block than others. Sophisticated users may use protocols designed to evade VPN detection, though these still leave characteristic patterns that advanced detection can identify.
VPNs encrypt all device traffic at the network level, while proxies typically handle only browser traffic without encryption. VPNs provide stronger privacy but are also more detectable due to characteristic connection patterns. Both hide IP addresses but VPNs offer comprehensive protection.
Legitimate Uses of VPNs
Privacy and Security
Privacy-conscious users employ VPNs to prevent ISPs from tracking browsing habits, avoid targeted advertising based on browsing behavior, and protect against data collection by websites and apps. Public Wi-Fi users rely on VPNs for security—unencrypted Wi-Fi allows network operators and nearby attackers to intercept traffic, but VPN encryption prevents this.
Journalists, activists, and whistleblowers use VPNs when researching sensitive topics, communicating with sources, or operating in hostile environments. These legitimate privacy and security needs justify VPN usage despite fraud concerns.
Remote Work
Corporate VPNs enable secure remote access to company networks and resources. Employees connect through VPNs to access internal systems, file servers, and applications as if physically in the office. This represents VPNs' original purpose—providing secure connectivity for distributed workforces. Corporate VPNs typically use static IP ranges that can be whitelisted by platforms serving business customers.
Geo-Restriction Bypass
Content streaming services, websites, and apps sometimes restrict access based on geographic location. VPNs allow users to appear as if connecting from different countries, accessing regionally restricted content. While often against platform terms of service, many users consider this legitimate personal use. Platforms combat this through VPN detection and blocking.
Censorship Circumvention
In countries with internet censorship, VPNs provide access to blocked websites and services. Users in China, Iran, and other restricted countries use VPNs to bypass government firewalls and access the open internet. Governments attempt to block VPN usage, but obfuscation techniques help users evade detection. This represents a critical free speech use case for VPN technology.
Fraud Uses of VPNs
The same privacy features protecting legitimate users enable fraudsters to hide their identities and locations. VPNs are ubiquitous in fraud operations, making detection essential for platforms combating abuse.
Account Takeover and Credential Stuffing
Account takeover attackers use VPNs to hide their locations when testing stolen credentials. Logging in from suspicious locations triggers security alerts, but VPNs make attacks appear from diverse, seemingly legitimate locations. Credential stuffing operations rotate through VPN servers to distribute attacks and evade rate limiting.
Payment Fraud
Card testing fraudsters use VPNs to hide their locations when validating stolen payment cards. Card-not-present fraud operations use VPNs appearing from cardholder home countries to avoid geographic mismatch flags. E-commerce fraudsters use VPNs to create seemingly legitimate purchase patterns from expected locations.
Bonus Abuse and Multi-Accounting
Bonus abusers create multiple accounts violating platform terms of service. VPNs make each account appear from different IP addresses, evading detection systems flagging multiple accounts from single IPs. Online gambling, gaming, and promotional offer abuse heavily involve VPN usage to create illicit account networks.
Click Fraud and Ad Fraud
Click fraud operations use VPNs to generate fraudulent clicks appearing from diverse locations. Affiliate fraudsters use VPNs to simulate organic traffic from different regions. Bot traffic operations combine VPNs with automation to hide bot locations and evade blocking.
While VPNs serve legitimate purposes, fraud operations use them extensively. Platforms often see disproportionately high fraud rates from VPN traffic—sometimes 5-50x higher than non-VPN traffic. This fraud association leads many high-risk platforms to block or restrict VPN access.
Detecting VPN Usage
VPN detection relies primarily on identifying IP addresses belonging to known VPN providers. While not perfect, IP-based detection remains the most effective method for identifying VPN usage at scale.
IP Database Detection
Commercial VPN services operate networks of servers with specific IP ranges. These IPs can be cataloged and detected. Most popular VPNs including NordVPN, ExpressVPN, Surfshark, and others use shared IP pools serving thousands of customers. Detection services maintain databases of known VPN IPs updated regularly as providers add servers.
Detection accuracy depends on database quality and update frequency. New VPN servers enter service daily, creating brief windows where they're undetectable. Comprehensive detection requires continuous monitoring and rapid database updates. Fraudlogix IP Risk Score maintains extensive VPN detection databases updated in real-time.
Behavioral and Technical Indicators
Beyond IP databases, VPN usage creates detectable patterns. Connection timing reveals VPN characteristics—traffic flowing through VPN servers exhibits specific latency patterns. Port analysis identifies common VPN ports and protocols. Reverse DNS lookups often reveal VPN provider domains. Shared IP detection flags IPs used simultaneously by multiple users, characteristic of commercial VPNs.
Sophisticated detection combines multiple signals rather than relying on any single indicator. Device fingerprinting, behavioral analysis, and IP reputation together with VPN detection create comprehensive risk assessment.
Fraudlogix VPN Detection
Fraudlogix IP Risk Score provides real-time VPN detection through comprehensive IP intelligence combining data from billions of programmatic transactions, global monitoring networks, and continuous VPN provider discovery. Our detection identifies commercial VPNs, corporate VPNs, and emerging providers with high accuracy.
Fraudlogix IP Blocklist includes known VPN IPs, enabling pre-bid blocking of VPN traffic in programmatic advertising. For platforms requiring VPN blocking at scale, our blocklist prevents VPN impressions before they generate costs.
Fraudlogix VPN Checker offers a free tool allowing anyone to check if an IP address is associated with VPN services. This simple interface provides instant VPN detection for investigation, testing, or integration into custom workflows.
🔍 Comprehensive VPN Detection
Fraudlogix provides complete VPN detection solutions for every use case. IP Risk Score delivers real-time VPN detection through API. IP Blocklist enables pre-bid VPN blocking. VPN Checker offers free instant verification. Choose the solution matching your needs.
Managing VPN Traffic
Blocking vs Graduated Response
Many platforms implement blanket VPN blocks, preventing any access from detected VPN IPs. This eliminates VPN-based fraud but also blocks legitimate privacy-seeking users. For high-risk industries like banking, gambling, and payment processing, blanket blocking often makes sense given fraud exposure.
Graduated responses offer nuance. Require additional authentication (multi-factor, email verification, phone verification) for VPN users. Limit functionality—allow browsing but require non-VPN connections for transactions or sensitive actions. Increase monitoring and fraud detection scrutiny for VPN traffic. These approaches balance fraud prevention with legitimate access needs.
Risk-Based Policies
VPN detection should inform risk-based policies rather than triggering automatic actions. Combine VPN status with other risk signals—device fingerprints, behavioral patterns, IP reputation, transaction characteristics—to make holistic risk assessments.
A trusted customer connecting via VPN warrants less concern than unknown users with suspicious behavior connecting through VPNs. Context matters—business travelers legitimately use VPNs, privacy advocates do too. Risk scoring incorporating VPN status alongside other signals enables intelligent decisions.
Industry Considerations
Different industries approach VPNs differently based on user needs and fraud exposure. Financial services typically block VPNs due to regulatory requirements and high fraud risk. E-commerce commonly blocks or restricts VPNs given strong fraud association. Gaming and gambling block VPNs to prevent geographic restriction circumvention and bonus abuse. Content platforms vary—some block VPNs to enforce licensing agreements while others tolerate them.
Consider your specific user base, fraud patterns, and business model when developing VPN policies. Document policies clearly in terms of service so users understand restrictions and can make informed choices.
Frequently Asked Questions
Free VPNs provide basic IP masking but often have limitations including slower speeds, data caps, limited server locations, and weaker security. Many free VPNs monetize by selling user data or injecting ads, defeating privacy purposes. From a fraud detection perspective, free VPNs are typically easier to detect because they operate smaller IP pools with higher sharing ratios. Paid VPNs offer better performance and privacy but present greater detection challenges due to larger, more distributed server networks.
Yes, if you know the IP ranges. Corporate VPNs typically use static IP ranges that can be whitelisted. For B2B platforms serving enterprise customers, collect VPN IP ranges from legitimate business users and whitelist them. This allows corporate remote workers to access your platform while blocking consumer VPNs associated with fraud. However, this requires ongoing maintenance as companies add servers or change providers. Some detection services including Fraudlogix can distinguish corporate from consumer VPNs.
Residential proxies and VPNs use IP addresses from real residential internet connections, making them much harder to detect than commercial VPNs using data center IPs. Detection requires advanced techniques analyzing traffic patterns, behavioral signals, and IP characteristics beyond simple database lookups. Fraudlogix IP Risk Score employs sophisticated detection methods identifying residential proxies and VPNs that evade basic detection. Residential VPN detection represents the cutting edge of fraud prevention technology.