High Risk Customers: Types & How to Identify Them

Not every customer is good for business. In fact, the average organization loses 5% of its annual revenue to fraud. In a digital-first world, where accounts are created in seconds and transactions are borderless, bad actors pose a serious threat to businesses.

These high-risk customers come in all shapes and forms, from fraud rings and fake accounts to opportunistic users looking to exploit promotions or lenient policies. Their tactics evolve constantly, adapting to new technologies and exploiting gaps in security systems. That’s why knowing the signs — and having the right tools to identify and stop these users before they cause damage — isn’t just good practice. It’s essential for business continuity and long-term growth.

Who Are High-Risk Customers?

High-risk customers are individuals whose actions or backgrounds signal potential risks, such as fraud, legal issues, or cybersecurity breaches. They may attempt to take over user accounts, use stolen credit cards, steal sensitive company data, or register with fake or stolen identities.

Identifying these threats early is critical. It begins with a thorough understanding of where vulnerabilities exist in the customer journey and by using customer screening tools to detect risks before they escalate.

7 Types of High-Risk Customers and How to Spot Them

Fraud rings operate on a large scale, using automation and familiar tactics to infiltrate systems. But what gives them power also makes them vulnerable — their moves are often predictable. Recognizing the red flags early can be the difference between a close call and a costly loss.

Here’s how to identify the most common types of high-risk customers — and the strategies to keep them from harming your business.

Stolen Credit Card Customers

First on our list are users who attempt to purchase a product or service using stolen credit card details. It’s a major risk because it leads to chargebacks, lost goods or services, damaged reputation and increased processing fees.

Typically, fraudsters using stolen credit cards are easiest to spot at checkout, where mismatched or suspicious payment details often appear. If your business requires a credit card at sign-up, that’s also a good time to verify payment info and catch fraud early.

How to Spot Stolen Credit Card Customers:

• Compare the card’s country of origin with the user’s IP address
• Look out for prepaid or foreign-issued cards
• Check if the email address leads to social profiles with mismatched names
• Monitor for multiple declined card attempts from the same user
• Use BIN lookup tools to extract and verify card issuer data

You can learn more about credit card fraud detection here

Money Laundering Customers

High-risk individuals may use your platform to disguise the origins of illegally obtained funds, posing serious ethical, financial, and legal risks. Failing to detect and prevent this activity can lead to regulatory penalties, reputational damage, and loss of customer trust.

These users can often be spotted during the registration stage, where initial checks should be in place. Later, transaction monitoring becomes crucial, helping identify suspicious patterns that may indicate money laundering activity.

How to Spot Money Laundering Users:

• Implement anti-money laundering (AML) screening at sign-up
• Flag IP addresses linked to sanctioned or high-risk countries
• Enable real-time transaction monitoring for abnormal patterns
• Use KYC processes that require detailed identity verification
• Employ geo-blocking where regulations demand it

Multi-Accounting Customers

These users create multiple accounts to abuse promotions, distort analytics, or carry out fraud, often trying to appear as different individuals while working under a single strategy. This type of behavior can damage marketing efforts, inflate user metrics, and enable more complex fraud schemes.

You can spot multi-accounting during registration by examining data like IP address, email, and phone number. More importantly, analyzing the device they use can reveal connections between accounts that seem unrelated on the surface.

How to Spot Multi-Accounting Users:

• Use device intelligence to find matching hardware and software setups
• Track IP addresses and proxy usage
• Monitor browser cookie hashes and login behavior
• Flag accounts with overlapping contact info or behaviors
• Detect and block suspicious referral or promo patterns

You can learn more about multi accounting here.

Politically Exposed Persons

Politically Exposed Persons (PEPs) are individuals in influential roles, such as government officials, who pose a higher risk of corruption or bribery. Identifying their activity is a crucial part of Anti-Money Laundering (AML) compliance and helps protect your platform from legal and regulatory issues.

The ideal time to identify PEPs is during user onboarding, typically through Know Your Customer (KYC) procedures. By collecting their full name at signup and cross-referencing it against official PEP databases—ideally using automated tools—you can flag high-risk individuals early and remain compliant.

How to Spot Politically Exposed Persons:

• Screen new users against international PEP databases
• Automate searches using software that checks global watchlists
• Ask users to self-declare PEP status during sign-up
• Watch for unusual transaction volumes or international activity
• Build alert thresholds to trigger reviews when PEP-linked accounts act suspiciously

Synthetic ID Customers

Synthetic ID customers are fraudsters who mix real and fake identity data to create convincing but false personas. They might use a legitimate email alongside a stolen ID, or pair a real name with a doctored document. This type of fraud is particularly dangerous because it can slip past basic identity checks.

The signup process is where you’ll gather the most detailed information, such as name, address, and email—but it’s important to keep monitoring beyond that. Red flags like suspicious IPs during login or mismatches between payment details and customer data can signal synthetic ID use later in the customer journey.

How to Spot Synthetic ID Customers:

• Validate ID documents and cross-reference with public databases
• Run reverse email lookups and phone number lookups
• Monitor behavior analytics (e.g., rapid form-filling, erratic actions)
• Analyze digital footprints and social media presence
• Use device fingerprinting to detect emulators or spoofed setups

Customers from High-Risk Countries

These users originate from jurisdictions flagged due to regulatory, political, or fraud concerns. They aren’t automatically fraudsters, but require closer scrutiny.

How to Spot Customers from High-Risk Countries:

• Maintain and reference updated lists of high-risk countries
• Block or flag accounts from sanctioned regions
• Verify location consistency across device, IP and payment info
• Use risk-based rules for transactions originating from flagged areas
• Require additional verification for high-value transactions

Customers with Complex Ownership Structures

These customers hide behind layers of legal entities, making it difficult to identify the actual beneficial owner. This opacity often signals tax evasion or money laundering.

How to Spot Customers with Complex Ownership Structures:

• Conduct enhanced due diligence (EDD) on corporate clients
• Use software to retrieve beneficial ownership data from registries
• Flag companies registered in secrecy jurisdictions
• Scrutinize documents for vague or missing ownership info
• Check for nominee directors or shareholders used across multiple entities

Why Is It Important to Spot High-Risk Customers?

Spotting high-risk users using risk monitoring methods is paramount to operating a safe, successful Identifying high-risk customers isn’t just about fraud prevention — knowing who poses a threat helps protect both your business and your customers.

• Reduce fraud exposure: High-risk individuals are often behind serious fraud tactics, from account takeovers and stolen ID usage to chargeback abuse and return scams. Early detection helps prevent costly incidents before they escalate.
• Ensure regulatory compliance: In regulated industries like banking or iGaming, failing to identify bad actors can lead to legal repercussions. KYC and AML regulations demand proactive screening and continuous monitoring.
• Preserve your community and brand experience: In community-driven platforms, high-risk users can disrupt trust and safety. From harassment to manipulative behavior, these users negatively impact genuine members and tarnish your brand.

Key Takeaways

Defining a high-risk customer is unique to each industry, but the principle remains the same: failing to identify them early puts your business at risk. From financial losses and compliance issues to reputational damage, the cost of inaction is way too high.

Stopping high-risk customers requires proactive action — by rooting out bad actors early, you create a safer and trusted platform that encourages growth, protects your reputation and builds long-term revenue resilience.

High-Risk Customer Related Articles Based on Industry:

• SEON: How to Detect High-Risk Customers in iGaming
• SEON: How to Identify High-Risk Customers in Banking
• SEON: How to Identify High-Risk Customers in Online Lending
• SEON: How Forex Trading Companies Can Spot High-Risk Customers

Frequently Asked Questions

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• SEON: What Is AML Customer Risk Assessment: Its Importance and How to Do It