Residential proxies: how attackers hide inside legitimate internet traffic

At DEFION's incident response team, we are seeing a pattern that is growing more common: the attacker no longer connects from a foreign server or an easily identified commercial VPN, but from IP addresses belonging to residential internet providers — often in the same country and even the same region as the victim. Behind this shift are networks of residential proxies.

This is not an isolated observation. The Dutch National Cyber Security Centre (NCSC-NL) published the intelligence report "Residential proxies and consumer devices exploited for malicious purposes" in late May 2026, warning of a growing trend in the malicious use of residential proxies. This article explains what they are, how attackers use them, and — most importantly — how to detect them.

What is a residential proxy

A residential proxy is an intermediary that routes the attacker's traffic through the internet connection and IP address of a real home user: a router, a mobile phone, a smart TV, or any device connected to the internet of things. Because ISPs assign those addresses and they are registered in databases as "residential", the malicious traffic appears to originate from an ordinary citizen browsing from home — not from a data centre or a known anonymisation service.

That is the crucial difference from data-centre proxies or commercial VPNs, which are relatively easy to identify and block. The residential proxy blends into legitimate traffic, which is why many security systems extend it a higher degree of trust.

According to the NCSC, these networks are fed in three ways:

• Voluntary participation: the user installs proxy software — free or paid — and grants access to their connection in exchange for money or access to a service. The terms covering this are sometimes buried in the fine print.
• Malware infection: the device is compromised without the owner's knowledge. Malware connects the device as a background process to the proxy network.
• SDK integration in legitimate apps: developers embed a proxy provider's SDK in their application. Users' devices automatically join the network without the user's awareness.

How attackers use residential proxies

The applications are broad. Based on our incident response case history and the NCSC report, we see the following scenarios:

Credential stuffing and account takeover

An attacker with a leaked credential list distributes login attempts across thousands of residential IP addresses. Security systems that block based on IP reputation or per-IP volume see each attempt as coming from a unique, legitimate user. The result: successful account takeovers that barely stand out in the logs.

Bypassing geo-restrictions

Organisations block traffic from certain regions or countries. A residential IP address from the right region passes these filters effortlessly. For an attacker seeking access to a Dutch-language admin portal with geo-restrictions, a Dutch residential address is sufficient.

Phishing infrastructure and C2 traffic

Phishing pages and command-and-control servers are accessed via residential proxies, so URL scanners and reputation services see an ordinary IP address. The malicious infrastructure thus remains operational for longer.

Automated fraud

Ad networks and platforms partly detect click fraud and bot behaviour via IP reputation. Residential IPs pass these checks, making them attractive for fraud operations at scale.

How to detect them

IP reputation filters do not work here. The attacker has a clean IP address. Detection requires a different approach:

ASN analysis and ISP metadata

Every connection can be enriched with the Autonomous System Number (ASN) and the associated provider. Residential IPs fall under consumer ASNs. A request arriving via a consumer ISP but exhibiting the behavioural pattern of an automated attack is a first detection signal.

Behavioural analysis and TLS fingerprinting

Where a human user has variable response times and navigates an application with normal browser interactions, automated proxies exhibit characteristic patterns: fixed TLS fingerprints (JA3/JA3S), perfect timing regularity, absence of standard HTTP headers such as Accept-Language, and the absence of CSS or JavaScript resource requests that a browser would normally load.

Session and volume patterns

A real user navigates sequentially within a single session. Automated proxy traffic often exhibits hundreds of parallel connections or statistically regular patterns that are detectable by even basic anomaly detection. Particularly when a single username attempts to log in from dozens of different residential IPs, that is a strong detection signal — even if each individual IP appears clean.

What this means for your organisation

Residential proxies are not a new phenomenon, but their use by malicious actors has grown structurally. The NCSC-NL report describes how consumer IoT devices — including home routers — represent an increasingly large share of these networks. The scale and availability of commercial residential proxy services make low-effort abuse accessible to any attacker with a basic budget.

For security teams, there are three immediate focus areas:

For organisations that suspect their systems have been exposed to automated attacks via residential proxies, or that want to understand how their current detection capability performs: a Compromise Assessment or a conversation with our Incident Response team is a logical first step.