Understanding Account Takeover – What It Is and How It Happens

Account takeover fraud (ATO) happens when cybercriminals hack into your online accounts to steal or manipulate information for financial gain. ATO fraudsters target bank accounts, credit card accounts, e-commerce accounts, and government benefits such as Medicare and Social Security.

Attacks begin with stolen credentials harvested from data breaches or purchased on the dark web. Fortunately, continuous monitoring and multifactor authentication can help prevent account takeover fraud attacks.

What Is Account Takeover?

Account takeover is a form of cyber fraud in which criminals use stolen credentials to gain unauthorized access to an online account. Typically, the accounts hacked contain valuable information such as credit card numbers, bank account information, personal details, and more. Criminals may then use the compromised information to commit fraudulent activities, including phishing, identity theft, and other financial scams.

Account takeover fraud is a significant problem for consumers and businesses alike. The most common consequence for individuals is identity theft, which can lead to monetary losses and a loss of trust in their business partners. Similarly, businesses face the risk of a high churn rate from customers who are upset about fraudulent charges and transaction disputes.

During an account takeover attack, thieves can steal private messages from your social media and email accounts, impersonate you on social media to run scams against your friends, or even post public content that exposes your details and reputation. Stealing passwords and usernames is the key to the success of many account takeover attacks, as criminals can buy stolen credentials from the dark web or gain them through phishing.

Once they have a list of credentials, attackers can use bots to test them across travel, retail, finance, eCommerce, and other accounts. Once they have verified the credentials, they can sell them to other hackers or use them to commit additional fraud.

What Are the Signs of Account Takeover?

Account takeover is a form of identity theft where hackers use stolen credentials to hijack actual credit cards, shopping, or even government benefit accounts. Criminals use these hijacked accounts to make purchases, withdraw money or extract information they can sell or use to breach more valuable assets.

Scammers can also use hacked accounts to launch phishing campaigns or conduct reconnaissance to plan more sophisticated attacks. The insidious nature of this type of fraud is that criminals can operate undetected for a long time, and it’s difficult to stop once a hacker has access.

For example, a user experiencing unusual activity, such as multiple account password changes or a sudden increase in login attempts, could be a sign of an account takeover. Similarly, companies may experience higher chargebacks or customer transaction disputes when fraudsters use stolen accounts to purchase goods and services.

Using the correct account takeover protection can help to prevent these kinds of attacks. Look for cybersecurity software that analyzes the small signals bots and other malicious actors send to a website or API and can detect suspicious activity in milliseconds. DataDome’s bot and account takeover protection solutions analyze 3 trillion signals daily to determine whether a request is coming from a human or an automated attacker at a false positive rate of less than 0.01%.

How Can I Prevent Account Takeover?

Account takeover is a threat to anyone, but it’s devastating for individuals and businesses relying on digital communication and data storage. Hackers can use stolen information and impersonate the victim to change account details, send phishing emails, steal credit card or bank information, and more. They can also exploit the stolen information to breach more accounts within an organization.

The good news is that there are many ways to prevent account takeover. Cyber-awareness training, a firm password policy, and multifactor authentication are all essential. Additionally, companies should watch for account alerts, such as password changes, login failures, and any suspicious or unusual activity.

Despite these measures, the threat landscape continues to evolve. For example, hackers often use a technique called credential stuffing or “card cracking” to gain access to users’ accounts. It involves using a combination of leaked usernames and passwords, dictionaries of common passwords, and stolen data purchased on the dark web.

It’s also vital for organizations to monitor employees’ physical devices, as fraudsters may attempt to compromise a device by entering code into the system or using malware to access the device remotely. Taking these steps, implementing fraud orchestration, and enabling biometric security measures like face or fingerprint recognition can help prevent account takeover. It’s also essential to avoid clicking on links in emails or texts from unknown sources and enable two-factor authentication wherever possible.

What Are the Consequences of Account Takeover?

Ultimately, account takeover fraud can cost consumers, businesses, and banks a lot of money. Fraudsters can use stolen credentials to hijack credit cards, shopping, or even government benefit accounts and use them for various illicit purposes. It can include making fraudulent transactions, stealing sensitive information, or even opening new accounts in the victim’s name.

Criminals can target individuals, small businesses, and large corporations. However, smaller businesses are more vulnerable to this cyber risk because they lack the resources to prevent or investigate suspicious activities. It is especially true in the case of the Business Email Compromise (BEC), where cybercriminals use stolen credentials to extort money from employees and clients.

The key to preventing account takeover is to have a comprehensive fraud detection system that uses continuous monitoring, or watching a customer’s activity before, during, and after a transaction, to detect patterns of suspicious behavior. For example, if a bank notices that a customer’s phone number or home address associated with their bank, credit card, or loyalty account has changed, this could indicate an account takeover attack.

A risk engine combining machine learning with continuous monitoring can identify these attacks in real time and stop them before they cause any damage. This kind of technology can also help to protect against phishing attempts, detecting and blocking IP addresses that are known to be involved in brute force attacks and botnets.