Fraud is not just a security issue. It is a business risk that can erode customer trust, disrupt operations, and create real financial exposure, including revenue loss or customer churn. For Cloud Solution Provider (CSP) partners, that risk is amplified by privileged access across customer environments and responsibility for billing and provisioning.
Microsoft fraud prevention work underscores the scale of what the ecosystem is facing. According to an August 2025 white paper, Three Lessons from Microsoft’s Fight Against Fraud, the company stopped $4 billion in fraud attempts, blocked around 1.6 million bot sign-ups per hour, and rejected 49,000 fraudulent partnership enrollments.
These are not edge cases. They reflect the operating environment partners see every day: impersonation, account takeover, synthetic identities, and abuse patterns that look legitimate until they cause damage.
Recent fraud trends in the ecosystem
Impersonation and social engineering amplification
One of the most significant shifts is AI-powered impersonation. Attackers can generate highly personalized phishing and business email compromise attempts that mirror the tone and content of legitimate communications, which makes them harder to spot with traditional checks. AI tools are making deception easier to scale, increasing the realism and reach of social engineering attacks.
Supply chain attacks
Supply chain attacks remain prevalent because threat actors often compromise smaller third-party vendors to reach larger organizations. For partners, this matters because your tools, access, integrations, and operational processes can become the pathway into customer environments if not tightly governed.
Microsoft mitigates supply chain attacks in a variety of ways, including partner vetting and due diligence complemented by analytics that map supplier relationships and detect anomalies in data flows that could signal fraudulent activity.
Micro-fraud schemes
Micro-fraud is another growing risk. These schemes rely on numerous low-value transactions that look insignificant in isolation but add up to meaningful financial losses. The white paper cites an example of targeting academic offers for individual students, where small, repetitive actions accumulate into substantial damage.
This is especially relevant for partners because micro-fraud can be easy to miss without monitoring designed to detect subtle patterns, not just obvious spikes or single high-value events.
What’s changing on Microsoft platforms for partners
Microsoft continues to strengthen protections across products and services, including actions like disrupting inauthentic behavior, enhancing detection, and adding fraud controls as part of product design processes. In parallel, we are raising the security baseline for partner access to reduce identity-based risk and protect customers.
Mandatory MFA for partner tenants and Partner Center APIs
Partner security requirements are clear: you must enforce multifactor authentication (MFA) on all user accounts in your partner tenant, including guest users. This requirement applies to Partner Center access, partner delegated administration, and transactions through APIs.
Microsoft is also moving to enforce MFA for Partner Center API access in specific scenarios. Beginning April 1, 2026, all app and user (App+User) usage of Partner Center APIs will enforce MFA. Microsoft also notes that, as of October 2025, APIs now look for the MFA token and provide confirmation of its presence in responses to support partner readiness.
Secure Application Model and modern authentication for automation
The Microsoft partner security requirements also call out the Secure Application Model framework. Partners who integrate with Partner Center APIs must adopt the Secure Application Model framework for any App+User authentication model applications, and Microsoft strongly recommends using it when partners leverage automation to avoid disruption when MFA is enforced.
Identity is a common entry point
Many fraud incidents start with account takeover, stolen credentials, or over-permissioned identities. As fraud tactics become more convincing, especially with AI-powered deception, identity controls are the first line of resilience.
What Microsoft is doing on the platform
Microsoft is enforcing and validating MFA for partner tenant access across Partner Center experiences and API transactions. Partners who do not implement mandatory security requirements may lose the ability to transact in CSP and can be blocked from managing customer tenants that use delegated admin rights.
Microsoft is also aligning partner API access patterns with MFA verification signals. When App+User authentication is used, Partner Center APIs check for the presence of MFA in token claims and can reject requests that do not meet the requirement.
The baseline every partner should meet
Treat Microsoft platform enforcement as the baseline, then build your operational practice around it. For most partners, these actions reduce exposure quickly:
These are not just compliance measures. They reduce the likelihood that a single compromised identity becomes a customer-impacting incident.
Fraud, misuse, and nonpayment create financial exposure for CSP partners
CSP partners are financially responsible for fraudulent purchases by their customers and for nonpayment of purchased services. That is why Microsoft recommends rigorous fraud prevention and detection controls, as well as why online transaction risk management discipline matters.
Stronger onboarding is a practical defense. Validate who you are provisioning before you extend services. Watch for rapid spikes in consumption, frequent billing changes, and behaviors that resemble abuse of service. The Microsoft online transaction risk management guide outlines risk exposures like crypto-mining, malware distribution, and automated account creation and recommends a comprehensive framework that includes prevention, detection, investigation, and mitigation.
Microsoft documentation on managing nonpayment, fraud, and misuse outlines specific steps to reduce exposure. In addition, the articles below focus on best practices to mitigate a customer’s fraudulent activities and misuse of Microsoft services:
Use Microsoft notifications and security alerts effectively
Microsoft can send notifications when suspicious activity is detected, but partners should use additional methods of monitoring and not rely solely on notifications.
For CSP partners, Partner Center security alerts provide a way to detect and respond to potential unauthorized abuse and account takeovers, including near real-time alerts and dashboards. The Microsoft guidance also emphasizes keeping email addresses and security contacts up to date so the right teams receive alerts.
AI-powered deception is raising the stakes
The use of generative AI is increasing the scale, speed, and realism of phishing and impersonation tactics. AI can also accelerate reconnaissance by scraping public information to tailor social engineering lures. The result is deception that looks and sounds more legitimate on a wider scale.
That reality makes identity controls and operational rigor even more important. Established measures still work, including increasing employee awareness of legitimate support processes and applying Zero Trust principles to enforce least-privileged roles across accounts and devices.
Trust starts with proactive execution
Microsoft has adopted a fraud-averse, secure-by-design approach, embedding fraud prevention into product development, telemetry, and policy. That same mindset applies to partners. As Customer Zero, your controls signal to customers what secure execution looks like.
Now is a good time to ask your team the tough questions. Are your systems resilient against impersonation or account misuse? Would you catch a micro-fraud campaign before it grows? Do your customers know they can trust your operational integrity?
If you want a simple plan, focus on three motions:
- Secure identity end to end: MFA everywhere, readiness for App+User Partner Center API MFA enforcement, and Secure Application Model framework adoption.
- Reduce blast radius: GDAP, least-privileged roles by task, and time-bound access aligned to Zero Trust.
- Operationalize fraud readiness: Onboarding checks, consumption monitoring, and a clear process to receive, review, and act on Microsoft security notifications and Partner Center security alerts.
Fraud is persistent. With strong identity controls and resilient operations, you can reduce exposure and protect the customer trust you have worked hard to earn.
Additional resources