Fraud is not just a security issue—it's a business risk that can erode customer trust, disrupt operations, and create real financial exposure. For Cloud Solution Provider (CSP) partners, that risk is amplified by privileged access across customer environments and responsibility for billing and provisioning.

According to Microsoft's 2025 fraud prevention white paper, 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 reflect the operating environment partners face daily: impersonation, account takeover, synthetic identities, and abuse patterns that look legitimate until they cause damage.

Recent Fraud Trends

AI-Powered Impersonation and Social Engineering

Attackers now generate highly personalized phishing and business email compromise attempts using AI, making them harder to detect. AI-powered deception is easier to scale and increases the realism and reach of social engineering attacks.

Supply Chain Attacks

Threat actors target smaller third-party vendors to reach larger organizations. For partners, your tools, access, integrations, and operational processes can become pathways into customer environments without tight governance.

Micro-Fraud Schemes

These rely on numerous low-value transactions that look insignificant individually but accumulate into meaningful financial losses. Partners need monitoring designed to detect subtle patterns, not just obvious spikes or single high-value events.

Microsoft's Updated Security Requirements

Mandatory MFA for Partner Center APIs

Beginning April 1, 2026, all App+User usage of Partner Center APIs will enforce MFA. Microsoft recommends the Secure Application Model framework for Partner Center API integrations, especially where automation depends on user credentials.

Identity as the First Line of Defense

Many fraud incidents start with account takeover or stolen credentials. Microsoft is enforcing MFA across Partner Center experiences and API transactions. Partners who don't implement mandatory security requirements may lose CSP transacting ability or be blocked from managing customer tenants.

Actions Every Partner Should Take

Critical baseline measures:

Financial Exposure and Risk Management

CSP partners bear financial responsibility for fraudulent purchases by customers and nonpayment of services. Stronger onboarding practices and consumption monitoring reduce exposure. Key practices include validating customer identities before provisioning, watching for rapid consumption spikes, and following the online transaction risk management guide.

Microsoft documentation on managing nonpayment, fraud, and misuse outlines specific mitigation steps, including onboarding best practices and customer account and billing management.

Three Core Motions for Fraud Readiness

1. Secure Identity End-to-End
Enforce MFA everywhere, prepare for Partner Center API MFA, and adopt the Secure Application Model.

2. Reduce Blast Radius
Use GDAP, least-privileged roles, and time-bound access aligned to Zero Trust principles.

3. Operationalize Fraud Readiness
Implement onboarding checks, consumption monitoring, and clear processes to receive and act on Microsoft security notifications.

TL;DR

  • MFA is mandatory: All Partner Center access and APIs require MFA; April 1, 2026 deadline for API enforcement
  • Identity-based attacks are rising: AI-powered phishing and account takeover are increasingly sophisticated
  • CSP partners bear fraud risk: Implement strong onboarding, consumption monitoring, and GDAP for least-privileged access
  • Micro-fraud is growing: Small, repetitive fraudulent transactions add up—detection systems must find subtle patterns
  • Trust requires proactive execution: Strong fraud controls signal operational integrity to customers

Resources

Source: Microsoft Partner Blog