Why residential proxies have become one of security’s biggest blind spots [Q&A]

Security teams still rely heavily on IP reputation, static IP lists, and behavioral baselines to separate legitimate users from malicious activity. But those methods are starting to break down. Increasing amounts of automated abuse, fraud and data scraping occur through residential proxy networks built from consumer IPs, blending into normal traffic and making it hard for security teams to detect malicious activity.

We spoke with Alastair Parr, CTO of Spur, about why residential proxies have become so effective for attackers and automated abuse and what security teams can do to regain visibility without adding friction for real users.

BN: Why have residential proxies become such a significant blind spot for security teams?

AP: Security teams tend to treat residential traffic as low risk by default. Historically, that made sense. Residential IPs usually meant real people sitting behind real devices. That assumption doesn’t hold anymore.

What’s changed is the number of consumer devices that quietly participate in residential proxy networks. Free mobile apps, VPNs, embedded SDKs and low-cost streaming devices often resell bandwidth or connectivity in the background. From a defender’s perspective, the traffic looks completely normal. It comes from legitimate ISPs and mobile devices. That gives fraud and automation a level of cover that’s hard to challenge with traditional controls.

BN: How do everyday consumer devices end up participating in these proxy networks without users realizing it?

AP: Most of the time, the consent is buried in the terms and conditions. Someone installs a free game, a utility app, or a free VPN. A streaming stick ships with third-party software preloaded. Somewhere in the agreement is permission to route traffic through the device.

There’s no compromise involved. Nothing is overtly malicious. But once that permission is granted, the device becomes part of a much larger pool of residential endpoints. Multiply that by millions of installs, and you end up with a global proxy network built out of ordinary household IPs.

BN: What kinds of activity rely most heavily on residential proxies today?

AP: Anything that benefits from looking like a real consumer. We regularly see residential proxies used for inventory hoarding, agentic scraping, and account farming. Because the traffic behaves like regular user activity, it’s very effective. Automation can refresh pages for hours, preload carts, or cycle through accounts without triggering obvious alarms. There’s no vulnerability being exploited. Success comes from leveraging the reputation of a residential IP.

BN: Why do traditional detection methods struggle so much with this type of traffic?

AP: Over the years, security teams have managed risks associated with infrastructure that attackers can quickly automate and discard, such as VPNs. Most security controls today are focused on mitigating these types of attack vectors. However, with residential proxy services, the IP address appears clean, the ASN seems legitimate, the device fingerprint appears common, and location checks pass. When teams investigate suspicious activity and determine that the traffic is residential, it’s often dismissed.

BN: How does hybrid work and BYOD make this problem harder to manage?

AP: Personal devices now sit directly on the edge of corporate access. An employee might use a personal phone or laptop for work while that same device participates in a proxy-resale network without their knowledge.

By doing so, legitimate business traffic is combined with the activity of other users on the same endpoint. From a security standpoint, it becomes more challenging to evaluate intent because traditional signals weren’t designed to consider that overlap.

BN: Beyond security risk, where do organizations feel the impact of residential proxy traffic day to day?

AP: The impact is evident almost immediately. In e-commerce, for example, automated traffic increases queue times, slows access to delivery and payment services, drains marketing budgets through automated clicks, and removes products before real customers can buy them.

Outside of the retail sector, organizations will experience similar dynamics when creating forecasts and capacity plans. When data scraping, account creation, and credential testing are hidden with what may seem like normal demand, teams become misinformed about the level of risk associated with residential traffic.

BN: If adding more friction isn’t the answer, what should security teams focus on instead?

AP: Teams that are making progress focus on using passive signals to provide additional context about the user without interrupting legitimate online sessions.

Examples of such passive signals include a user’s consistent location over time, the quality of their network, various indicators associated with known proxy-resale applications, and session behavior that doesn’t match what would normally occur within an average person’s behavior. These passive signals operate in the background to help teams more accurately determine the level of trust businesses should have in their users.

BN: What prevents security teams from accurately assessing residential proxy traffic today?

AP: The main issue is a lack of usable context. Most teams collect IP data and behavioral signals, but those signals often stop at surface-level classification. What matters more is whether that user’s behavior makes sense given their location and whether residential proxy infrastructure is involved. Because residential proxies inherit the reputation of consumer infrastructure, the traffic is often trusted and treated as normal demand, rather than being examined more closely to determine whether it represents legitimate activity.

With stronger contextual and historical understanding in place, teams can distinguish between real users and coordinated automation running on shared residential infrastructure without adding friction.

BN: Should residential proxies now be treated as part of the attack surface?

AP: Yes. Residential proxy networks are now a permanent infrastructure on the internet. They weren’t built through exploitation, which is why they’re often easy to overlook. But attackers already treat them as a resource.

Security teams must add this risk to their threat model. By assuming that all residential traffic is safe, teams can create blind spots in fraud detection, identity assurance, and operational monitoring. Recognizing this will enable security teams to make better decisions about risk, trust, and their overall defense strategy.

Image credit: BeeBright/depositphotos.com