Account takeover fraud is a common cybercrime that impacts businesses of all sizes. Protect your customers from fraud by learning how fraudsters target accounts.

Criminals harvest usernames and passwords through data breach phishing or buy them on the dark web. They then use these stolen credentials to commit fraud, causing financial loss and reputational damage.

Know Your Customer

Account takeover is one of the most dangerous and fastest-growing forms of fraud. It’s pervasive, hard to detect, and can cost businesses millions in unauthorized purchases, customer loyalty, and lost revenue.

It starts with stolen credentials – most likely acquired in a data breach, then used to hijack an online account – giving criminals broad latitude to change, steal, or authorize information or activity associated with that account. The most common use of stolen credentials is to steal money – whether from a bank account or by purchasing goods with rewards points – but hackers can also gain a survey of a company’s internal operations and its customers.

Fraudsters are challenging to spot because they’re cloaked as real customers with ordinary account histories. That’s why implementing strong password policies and multifactor authentication is critical to helping prevent account takeover.

Another way to nip account takeover in the bud is to monitor every action on a bank account. Most of these actions are customer-initiated, but a fraud detection process that looks at the big picture and all the moving parts can help spot suspicious patterns. A sound system will look at the new address, phone number, or password being requested and compare it to what was already in the account. This holistic approach is much more effective than relying on rules-based detection methods.

Know Your Threats

This is the basic of what is account takeover. Account takeover is a known and highly profitable attack where a lousy actor gains unauthorized access to an online account using stolen credentials. These accounts can be anything from websites secured by login credentials, such as email, social media accounts, travel sites, loan applications, and more. They often contain sensitive PII, funds, loyalty points, and more. Attackers typically purchase stolen data from the black market or obtain it through breached sites. They then use credential stuffing, a form of brute force attack that involves verifying a username and password combination, to gain access to the account. The attacker can then do a variety of things with the account, including:

These activities can be as simple as sending spam and phishing messages to friends and family members posing as their accounts, but they could also be used for more sinister crimes such as drug- and human trafficking. Regardless of the motivation, criminals can cause immense harm to your customers, brand reputation, and bottom line through account takeover fraud.

The good news is that you can help your customers avoid account takeovers by detecting abnormal behavior in their accounts, such as an accumulation of unsuccessful login attempts or a sudden change in how they log in. By identifying and flagging these changes in real-time, you can help them protect their information and reduce the risk of their account being taken over by a malicious third party.

Detect ATO Immediately

Account takeover (ATO) is a form of cybercrime and fraud that occurs when bad actors obtain stolen credentials from another person’s online account. These stolen credentials may include an email address, password, or other login information. Criminals then use those credentials to carry out various attacks that can cost the victim – and their employer – dearly.

For most organizations, ATO starts with a phishing attack, typically spear phishing, which targets a specific user rather than a general audience. The attacker pretends to be the victim’s financial institution to obtain their login credentials.

After obtaining an account, bad actors try to change the email, phone number, or other contact information associated with the account. They also make unauthorized purchases or use the account to commit fraud. ATO is an expensive problem for businesses, especially those that rely on digital channels to conduct business.

The most common ATO attacks involve credential stuffing, phishing, and malware. Credential stuffing is when hackers attempt to guess passwords, often using word lists or brute force through bots, until they gain access to an account. These credentials are then sold on the dark web for other ATO hackers to use. Hackers can then use stolen credentials to reset a victim’s password on other accounts and potentially carry out phishing attacks or fraud.

Secure Your Data

Account takeover is one of the most potent types of cyber attacks and can have devastating consequences for customers and businesses. Fraudsters can use stolen credentials to commit credit card fraud, business email compromise (BEC), and more. They can also steal personal information to perpetrate identity theft or use it in phishing attempts to infiltrate other accounts and networks.

The good news is that you can do several things to make it harder for criminals to gain access to your accounts. Start by ensuring you have strong and unique passwords and enable multifactor authentication on critical accounts. It’s also important to be vigilant of suspicious emails, texts, or calls and keep security software current.

Involving all departments across your organization is crucial to responding effectively to account takeover. Providing examples demonstrating how account takeover can impact different business areas is helpful to get buy-in. To do this, you should learn about incidents in each department and the impact on a specific customer or the business itself. This is the best way to relate the issue to different people and help them understand its significance. This approach can also help you secure the support needed to invest in protection against this growing threat.