Russia online security firm accused of fraud

By bne IntelliNews February 8, 2016

Academ Media, a Siberian-based mobile phone app developer, has been accused of defrauding millions of dollars via MoPub, the online marketplace owned by Twitter.

Online security company Sentrant said the alleged fraud by Academ was among the most sophisticated yet in the fast-growing market for mobile advertising, according to a report in the Financial Times. Academ Media has strongly denied the allegations while Twitter and MoPub declined to comment, the FT said.  

Sentrant said it has identified more than 200 apps in the Google Play store that, after being downloaded on a mobile device, loaded "invisible" ads in the background. Its research team estimated that these rogue apps generated at least $250,000 in advertising revenues each day — from companies paying for views — even though the ad placements could not actually be seen by people.

"This is as bad as any financial crime going on worldwide," Allen Dillon, chief executive of Sentrant, told the FT. "It's going to cost the consumer at the end of the day, because someone has to pay for the losses."

Apps containing "fraud code" linked to Academ Media included Frozen Flame, a free game for children that has been downloaded more than 100,000 times.

Academ Media, which has 1,000 employees, said that the allegations were unfounded. It claimed that, a year ago, its systems were hacked by an unknown attacker, who stole data and modified the company's apps to commit advertising fraud.

However, Sentrant has claimed that more than 20 shell companies linked to Academ Media launched new apps last year containing a "stealthier" version of code that had previously been found in Academ's apps.

The US Association of National Advertisers, whose members include McDonald's and Unilever, in January forecast that online ad fraud would cost brands $7.2bn this year.

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