Tor Browser

In 2024, scam cases rose by 56%, and related losses jumped 121%. Overall, reported fraud losses hit $12.5 billion, according to this report.

While Tor Browser has many legal uses, it's often linked to scam activity. This means risk teams should monitor applicants who use it more closely.

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What is Tor Browser?

Tor is a free web browser that hides your identity by bouncing your internet traffic through different servers worldwide. Also known as The Onion Router, it helps users stay anonymous online.

Tor’s average daily users and top countries from September 2023 to October 2024:

The Tor network has around 2.5 million active daily users. Like many tools, it can be used for both good and bad purposes. 

The good purposes to use Tor for include:

• Avoiding censorship.
• Reporting wrongdoing anonymously.
• Accessing restricted information.
• Protecting personal data from tracking.
• Browsing safely in monitored countries.

The survey by the Tor team showed the main reasons people use the browser:

A bar chart titled "Why do you use Tor?" based on 50,225 responses. The reasons are "Personal privacy" at 81%, "For ideological reasons" at 37%, "To circumvent censorship" and "To stay safe as an activist" are both at 16%, "For work" at 12%, and "Other reasons" at 4%.

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What is Tor Browser used for​​ in loan fraud?

Due to its identity-hiding features, Tor is associated with criminal activity in fintech markets. This browser helps fraudsters to slip past standard checks during loan applications.

Here’s why Tor raises red flags in lending:

• Hides key identity signals like IP address and device details.
• Makes it harder to verify location, which is often part of risk assessment.
• Allows fraudsters to bypass digital footprint checks used in loan application systems.
• Enables multiple fake applications without being easily detected.

While not always fraud, this activity often signals a need for closer review by risk teams.

The method that allows lenders to detect Tor Browser usage and gather key details about a borrower's connection is called IP address lookup.

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How IP lookup helps identify Tor users in lending

IP address lookup is a technique that analyzes a user’s connection details to provide context beyond the application data.

By adding this layer of intelligence, lenders can refine their risk models, uncover hidden patterns, and better evaluate the credibility of each applicant’s digital environment.

How it improves risk insights:

• Flags anonymizers like VPNs, proxies, and Tor.
• Checks the location against the applicant’s declared address.
• Identifies IP type to spot high-risk patterns.

IP address analysis gives lenders a clearer picture of who's applying without slowing down the process. 

It strengthens risk models, improves decision accuracy, and helps prevent fraud while keeping the borrower experience smooth.

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What is the Tor in lending? Final thoughts

As fraud tactics grow more sophisticated, tools like Tor Browser make it easier for bad actors to stay hidden. 

What this means for risk managers:

• Most legitimate borrowers don’t need to hide their digital footprint.
• Tor usage is often flagged by risk teams as suspicious behavior.
• While Tor has legal uses, in lending, it’s a known tool for avoiding detection.

By using proactive tactics like IP analysis and alternative data scoring, lenders can spot this behavior early and make smarter, safer lending decisions.