
Mitigating Fraud Risks: Overview
Fraud has been and remains a persistent and evolving threat in the digital world, particularly for organizations managing digital customer identities, financial transactions, and high-value user accounts. While implementing fraud detection is not mandatory for every organization, certain industries such as e-commerce, financial services, digital marketplaces, and subscription-based businesses are more likely to prioritize and invest in fraud prevention tools like Dynamics 365 Fraud Protection.
Organizations preparing for Azure AD B2C migration may choose to integrate fraud detection over time, depending on their risk exposure, compliance needs, and business priorities.
The Dynamics 365 Fraud Protection offers an AI-aided real-time service to secure infrastructure and users themselves. Fraud Protection: Redefining security for last-mile fraud detection. Featuring AI-driven adaptive learning models and real-time fraud intelligence from Microsoft, it can visually demonstrate how organizations can start preventing data fraud in online transactions.
In this blog, the significance of Fraud Protection as it directs to the construction of a secure infrastructure for Azure AD B2C migration is demonstrated, where it is logically associated with benefits, primary characteristics, licensing considerations, and why it is critical before migration.
What Is Dynamics 365 Fraud Protection?
It can be integrated securely with Azure AD B2C, offering protection against fraud in account creation, sign-ins, and transactions. It also offers AI models for identifying patterns against fraud, as well as access to global data on fraud by connecting to Microsoft's global intelligence. Key features of the Fraud Protection:
Account Protection
Prevents fraudulent account creation & account takeover attacks. Uses AI-based risk scoring to flag suspicious login activities (e.g., credential stuffing, bot attacks). Beneficial for: E-commerce platforms, financial institutions, and digital service providers.
Loss Prevention
Reduces refund abuse, gift card fraud, and inventory theft. Monitors transactional workflows to detect fraudulent patterns. Beneficial for: Retail, marketplaces, and high-volume online businesses.
Purchase Protection
This ensures the best user experience by minimizing false positives, ensuring legitimate users are not blocked unnecessarily. Prevents payment fraud and transaction abuse using Microsoft's global fraud intelligence network. Beneficial for: Businesses processing online payments & high-value digital transactions.
Who Should Consider Implementing Dynamics 365 Fraud Protection?
While fraud protection is valuable, it requires significant planning, implementation effort, and development work. It is not a quick add-on as integration typically takes 1–2 months, depending on complexity. Organizations that should seriously consider it include: Financial institutions & banks – High risk of identity fraud, account takeovers, and payment fraud. E-commerce & digital marketplaces – Need protection against fake accounts, chargebacks, and refund fraud. Subscription-based platforms & SaaS providers – Prevent account abuse, trial fraud, and bot-based attacks. Gaming & digital entertainment services – Protect against in-game fraud, stolen credit card usage, and cheating.
Who May Not Need Immediate Implementation?
Healthcare providers – Unless processing digital transactions or handling high-risk patient data. Internal B2B applications – Lower risk of public-facing fraud but may still benefit from strong authentication security. Organizations with lower fraud exposure – Businesses with limited online transactions may not prioritize this initially.
Licensing Requirements and Costs
Fraud Protection is part of the Dynamics 365 suite and requires a separate license. Pricing varies based on usage volume and business needs. Here's what you need to know:
Account Protection Plan: Designed for securing user accounts during sign-ups and login activities. Pricing: Starts at approximately $1,000 per tenant/month, but actual costs depend on usage volume and risk evaluation requests.
Loss Prevention Plan: Focuses on protecting transactional workflows from fraud. Pricing: The price for Microsoft Dynamics 365 Fraud Protection Loss Prevention plan is transaction-based, where the actual cost is determined by the volume of transactions and the feature you are using; however, it is within a few cents per transaction for most businesses.
Custom Plans: Custom pricing is available for large enterprises with specific fraud prevention requirements.
Important Note: Licensing for Fraud Protection is separate from Azure AD B2C licensing, and organizations must plan for this additional cost when building their infrastructure.
Gotchas to Consider
Cost Implications: Licensing fees for Fraud Protection can quickly escalate, especially for high-volume transactional businesses, e.g large e-commerce and financial service businesses.
Integration Complexity: Setting up Fraud Protection to work with Azure AD B2C requires technical expertise and additional configuration efforts. It consists of custom API-based integrations for risk scoring and fraud detection.
Limited Effectiveness for External Identities: Fraud Protection can still assess behavior-based risks for users logging in via Google, Facebook, or other identity providers (IDPs). However, authentication-based risk signals (e.g., password reuse detection) may not be available for external logins.
Advantages of Fraud Protection
Disadvantages of Fraud Protection
When to Use Dynamics 365 Fraud Protection
Fraud Protection is highly beneficial for organizations that:
Are preparing for an Azure AD B2C migration: Helps detect and block fraudulent accounts before migrating users into a new environment. Ensures only legitimate identities are onboarded.
High-Traffic Businesses: Ideal for businesses handling millions of sign-ins or transactions (e.g., e-commerce, fintech). Scales efficiently to process real-time fraud detection at enterprise levels.
Fraud-Prone Industries: Ideal for industries like e-commerce, gaming, finance, and others that handle sensitive user data. Protects payment processing, account creation, and user authentication flows.
Key Considerations for Infrastructure Planning
Assess Licensing Needs: Determine if you need Account Protection, Loss Prevention, or a combination of both based on your organizational needs. Plan for transaction-based costs based on estimated fraud prevention needs.
API-Based Integration with Azure AD B2C: Fraud Protection does not directly integrate, it requires API-driven risk analysis and decision-making logic. Align deployment with other security tools like Microsoft Sentinel & Conditional Access.
Plan for Scalability: Configure Fraud Protection to scale seamlessly with your business's growing transactions and login volumes.
Test Fraud Detection Models: Simulate scenarios to optimize detection accuracy and minimize false positives.
Monitor and Evolve: Regularly review fraud patterns and update configurations to maintain a proactive security posture and stay ahead of evolving threats.
Why Fraud Protection Matters Before User Migration
Fraud Protection plays a critical role in securing pre-migration environments for Azure AD B2C by:
Blocks Compromised Accounts: Prevents fraudulent sign-ups and identity takeovers from entering the Azure AD B2C environment.
Reduces Migration Risks: Secures operational workflows and reduces disruptions caused by fraud during the migration process.
Improves Data Integrity: Ensures that only legitimate accounts and activities are part of the migration, reducing post-migration remediation needs.
Builds User Trust: Demonstrates a commitment to security, reinforcing trust among end-users during and after migration.

Final Thoughts
D365 Fraud Protection provides robust, scalable fraud prevention for businesses that require enhanced security in identity and transaction management. While it is not a mandatory step for Azure AD B2C migration, it is highly valuable for organizations facing fraud risks.
Investment & Implementation Considerations:
Requires API-based integration and custom rule tuning to match business needs.
Takes 1–2 months to implement fully, organizations should plan accordingly.
Provides real-time fraud detection using AI-powered risk analysis and Microsoft’s global fraud intelligence network.
Ensures long-term fraud mitigation for organizations that process high-risk transactions or manage high-value user accounts.
Early integration of Fraud Protection within the migration process secures your infrastructure, data, and creates a smooth experience in transitioning into Azure AD B2C. For organizations prioritizing infrastructure readiness, Fraud Protection provides a proactive and reliable foundation for success.