As digital landscapes evolve, businesses worldwide confront multifarious cyber threats. Foremost among these is the ominous phenomenon of account takeover (ATO). ATO is a form of identity theft where cybercriminals gain unauthorized access to online accounts to steal sensitive information, funds, or commit other malicious activities. Kasada’s solutions are crafted to battle this menace, fortify your virtual security, and ensure your business stays resilient.
Short Summary
- Account takeover fraud is a form of identity theft that can lead to severe financial losses and reputation damage.
- Prevent ATO by creating strong passwords, implementing multi-factor authentication, monitoring account activity, identifying red flags & implementing bot management.
Account takeover is a risk you cannot afford to take
Account takeover is a type of fraud in which an attacker gains access to another person’s online account. Cybercriminals take over accounts by stealing the victim’s login credentials, using malware, or finding and exploiting vulnerabilities in the security of the accounts. Once the attacker has control of the account, they can use the account and change the credentials, steal credit card details to use in a different place, or commit other types of fraud.
Account takeover (ATO) can have serious consequences for both individuals and businesses. For individuals, sensitive personal information may be compromised, and they may be unable to access their accounts. For businesses, account takeover can lead to even more significant financial losses and damage to their reputation.
ATO risks aren’t going away anytime soon, either. ATO attacks increased 307% between 2019 and 2021.
One of the first prominent instances of account takeover fraud was the Target breach in 2013. In this incident, fraudsters stole millions of customer credit and debit card numbers by gaining access to the retailer’s point-of-sale system.
Since then, account takeover fraud has become an increasingly common problem. In 2018, there was a major account takeover attack on Ticketmaster, in which fraudsters gained access to customer account information. We’re continuing to see account takeover attacks occur in all industries – from financial services, online grocery providers to streaming services–affecting millions of people.
As this type of malicious fraud is only growing more severe, it’s important to understand why it’s becoming increasingly more common. These are several factors that have contributed to the rise of account takeover fraud:
The growth of online commerce
As more businesses move online, there are more opportunities for fraudsters to commit account takeover fraud. E-commerce businesses are particularly vulnerable, as they often store large amounts of customer data, including credit card numbers and account login information.
Social media accounts are a treasure trove of information for attackers. They contain a lot of personal information that can be used to commit fraud or identity theft. Many social media platforms store birthdates, addresses, and phone numbers. Combined with often weak and/or reused passwords created by users, account takeover attacks pose a serious security issue for our favorite social networks.
The increase in data breaches
Cybercriminals are able to obtain login credentials from data breaches, which they can then use to take over accounts. They can also buy stolen login credentials on the dark web and use them for credential stuffing attacks and other forms of account takeover fraud. In fact there are dedicated underground marketplaces which sell guaranteed to work stolen accounts.
The proliferation of mobile devices
Mobile devices are easily lost or stolen, which gives malicious actors physical access to the device. In addition, phones usually have weaker security than desktop computers, making it easier for fraudsters to obtain sensitive information.
The affordable and easy access to automation
As you can imagine, conducting a profitable attack is a numbers game. Attackers are typically only motivated by financial gain, meaning they are looking for the fastest, easiest and cheapest way to take over accounts. Malicious automation also known as bots offers not only speed and cost savings, they are also incredibly effective at evading traditional detection. Cost, speed, and sophistication all add up to bots being attackers’ preferred tool when launching account take over attacks at scale.
Types of Account Takeover Fraud
The tactics employed by cybercriminals in ATO fraud are as diverse as they are devious. Some of the most common methods include:
- Phishing: fraudsters deceiving victims into revealing sensitive information such as passwords or credit card numbers through seemingly legitimate emails or text messages
- Malware: malicious software that can infect your devices and steal personal information
- SIM card swapping: fraudsters convincing your mobile service provider to transfer your phone number to a new SIM card in their possession, allowing them to access your accounts
- Man-in-the-middle attacks: intercepting communication between you and a legitimate website or service, allowing the attacker to eavesdrop or manipulate the information exchanged
These methods can leave you or your organization exposed and vulnerable to further attacks. As technology continues to evolve, cybercriminals are constantly adapting and refining their methods, making it all the more crucial for individuals and businesses to stay one step ahead of threat actors.
Targets of Account Takeover Fraud
No one is immune to the threat of account takeover fraud. Cybercriminals target individuals, businesses, and financial institutions alike, in pursuit of financial gain and access to sensitive information. The consequences can be dire, with victims suffering from financial losses and damaged reputations. Businesses, in particular, face the added risk of losing customers and incurring higher processing fees as a result of data breaches.
Business Email Compromise (BEC) is a prime example of how ATO can affect businesses. Fraudsters gain access to an employee’s email account, impersonate the victim, and target others for restricted data or payment requests. This form of ATO can lead to significant financial losses and reputational damage for the affected business.
To mitigate these risks, it is essential for both individuals and businesses to understand the various forms of ATO fraud and take proactive measures to prevent unauthorized access to their accounts.
Most prominent security risks that facilitate account takeover fraud
There are several security risks that can facilitate account takeover fraud:
Using the same password for multiple accounts
If a fraudster obtains the login credentials for one account, they can use those same credentials to take over other accounts. This is why it’s important to use different passwords for every account.
Reusing passwords that were previously compromised
If you have ever used a password that was involved in a data breach, it’s important to change that password and never use it again.
Using easily guessed passwords
Passwords that can be easily guessed by fraudsters are one of the most common ways that account takeover occurs. Malicious actors can use password-guessing tools to try to gain access to accounts.
It’s important to use unique passwords for all of your accounts. A strong password should be at least 10 characters long and contain all of the following: uppercase letters, lowercase letters, numbers, and symbols.
Failing to enable two-factor authentication
Two-factor authentication (2FA) is an additional layer of security that can help to protect your accounts.
With 2FA, you will be required to enter a code that is sent to your phone or email in addition to your password when logging in. This makes it more difficult for fraudsters to gain access to your account, even if they have your password.
Failing to keep software up to date
One of the most important actions you can take to protect your account is to keep your software up to date. Malicious actors often exploit vulnerabilities in outdated software to compromise accounts.
Siloed assets and lack of comprehensive visibility
It’s crucial for organizations to have visibility into all of their assets in order to detect and respond to security threats.
Broken object-level authorization (BOLA) is an API vulnerability that allows fraudsters to access account data that they should not be able to see. BOLA can be used to commit a variety of account takeover attacks, such as financial fraud or data exfiltration.
Zero-day vulnerabilities
Zero-day vulnerabilities are direct opportunities for attackers. Organizations are not yet aware of these vulnerabilities, but attackers are—and that makes them a major security risk. Security teams must prioritize the discovery and elimination of zero-day vulnerabilities.
Malicious automation
Automated bots allow threat actors to scale up their efforts and compromise accounts more quickly than ever before. Advanced bots can also go undetected for long periods of time, which gives them a wider window of opportunity to complete an ATO attack successfully. Sophisticated attackers can also reverse engineer traditional detection, forcing you to play a never ending game of cat-and-mouse with adversaries. Highlighting the need for a solution that is hands off and resilient to reverse engineering.
Why Account Takeover Fraud is so Hard To Protect Against
Account takeover (ATO) is a growing threat to online businesses, with bots playing a major role in this cybersecurity issue. Automated tools and bots, capable of mimicking human behaviors, make it challenging to detect and protect against ATOs in real-time. Once an account is compromised, it opens the door for unauthorized purchases, sensitive data theft, and personal information changes. Factors contributing to the challenge of preventing ATOs include the difficulty in detecting automation, lack of visibility into account activity, weak authentication systems, insufficient security controls, human error, insider threats, and third-party risks.
Responding to Account Takeover Fraud
Detecting and responding to ATO fraud is a crucial aspect of protecting your accounts and minimizing the potential damage caused by unauthorized access. This involves monitoring account activity, identifying red flags, and taking immediate action to mitigate the threat.
In the following subsections, we will discuss each of these steps in more detail, providing you with valuable insights and strategies for identifying and addressing account takeover fraud in a timely and effective manner, especially when account takeover fraud occurs, including the prevention of account takeovers.
Monitoring Account Activity
Monitoring account activity is a crucial defensive measure against account takeover (ATO) fraud. Constant vigilance over account behaviors enables organizations and individuals to detect irregularities or anomalies that might signify unauthorized access. As cybercriminals employ increasingly sophisticated methods to bypass security measures, having a granular view of account actions can help in promptly identifying and countering potential threats. By proactively monitoring account activity, one can spot and address suspicious patterns, such as unusual login times or locations, thereby mitigating the risk of ATO fraud and protecting sensitive data and assets.
Preventing Account Takeover Fraud: Tips for Individuals
Now that we’ve explored the various aspects of detecting and responding to account takeover fraud, let’s discuss some tips for individuals to help prevent ATO from occurring in the first place. These include creating strong passwords, implementing multi-factor authentication, and staying vigilant against phishing attacks.
By following these best practices, you can greatly reduce your chances of falling victim to account takeover fraud and protect your sensitive information from unauthorized access.
Creating Strong Passwords
Creating strong and unique passwords for all of your accounts is essential for ensuring account security. This is the foundation of online security. A robust password should consist of a combination of upper and lowercase letters, numbers, and symbols, making it difficult for would-be attackers to guess or crack. Additionally, it is important to avoid using easily guessable information, such as your name, birthdate, or common phrases, as part of your password.
To help you manage and generate strong passwords, consider using a reliable password manager, such as LastPass. Here’s how it can help:
- LastPass can create complex, unique passwords for all of your accounts
- It can store your passwords securely in an encrypted vault
- By using LastPass, you can significantly decrease your risk of account takeover fraud
Take the time to create strong passwords for each of your accounts and update them regularly to further enhance your security.
Implementing Multi-Factor Authentication
Implementing multi-factor authentication (MFA) is another crucial step in safeguarding your accounts from unauthorized access. MFA requires users to provide two or more verification factors to access an account, such as something the user knows (password), something the user has (smartphone or token), and something the user is (biometric data). This additional layer of security ensures that even if your password is compromised, attackers will still be unable to access your account without the additional verification factor.
Many online platforms and services now offer MFA as an option for added security, and it is highly recommended that you enable this feature whenever possible. By combining strong passwords with multi-factor authentication, you can create a formidable barrier against account takeover fraud and help protect your sensitive information from unauthorized access. Although this proves to be a key way to protect against ATO, as multi-factor authentication (MFA) becomes more widespread, attackers increasingly focus on exploiting MFA security measures in account takeover campaigns.
How Organizations can accurately detect an ATO attack
Although it can be difficult to detect cyberattacks, it is not impossible. Here are a few ways organizations can detect ATO fraud:
Employ bot detection
An advanced bot detection solution like Kasada’s will identify malicious automation and fraudulent activity that would normally go undetected. With an advanced bot mitigation solution you can stop attackers from using their preferred tool. By preventing attackers from using automation and remaining resilient to retooling efforts you can undermine the ROI of the attack, forcing financially motivated attackers to move on.
Monitor login activity
Organizations should keep an eye out for suspicious behavior, such as multiple failed login attempts, logins from unusual locations, and logins at strange times.
Review account activity
Regular reviews of account activity can help organizations identify unauthorized transactions or changes to account details.
Check for anomalies
Organizations can use data analytics to look for anomalies in account activity. This can help them to identify unusual behavior that may be indicative of account takeover fraud.
How to protect against account takeover fraud
Cybercriminals are constantly evolving their tactics, yet too often security solutions don’t keep pace with attackers. Organizations need to employ a proactive approach and work with like minded security partners that understand the mindset of adversaries.
Here are steps companies can take to protect their sensitive data from account takeover fraud:
2FA and MFA
Organizations can use two-factor authentication (2FA) and multi-factor authentication (MFA) to protect against account takeover. This requires users to enter a code from their mobile phone or another device in order to access their account.
Without 2FA or MFA in place, attackers will likely be able to access an account the moment they are able to guess the correct login credentials. This is why it’s crucial for organizations to implement multiple steps in the authentication process.
While MFA is a good step, it isn’t infallible, account takeover attempts can result in a massive influx of login requests, leading to increased costs from OTP service providers. Additionally, these verification techniques can be compromised by phishing schemes designed to deceive users into handing over their One Time Password.
Hardware security keys
Even more secure than 2FA codes, hardware security keys can be used to protect against account takeover fraud. These keys are physical devices that must be inserted into a computer or phone in order to log in. They can be used to authenticate login requests and prevent account takeover attempts.
Since most modern ATO fraud occurs online, hardware keys offer an excellent layer of security for organizations.
However, they place a large amount of friction on users. It is unreasonable to expect users to own and use a hardware security key every time they want to log into their account.
Secure storage of digital assets
Organizations should store digital assets in a secure location, including customer account details, employee login details, and financial information.
Restricting account access
Only authorized personnel should be able to access accounts with sensitive data. This can help to prevent unauthorized account takeover attempts. We recommend reviewing access levels regularly to ensure that they are up to date.
Account tracking system
Organizations should implement an account tracking system to identify suspicious account activity and take action accordingly.
Monitor account activity
Monitoring account activity can help businesses detect account takeover attempts. Businesses should look for suspicious login attempts, changes in account details, and unusual activity.
Active password management
Organizations should implement company-wide processes that include regularly changing passwords, using strong passwords, and not sharing passwords with unauthorized users.
Password managers
Using a password manager can help businesses to create and store strong passwords. Password managers generate random passwords and store them in an encrypted format. This reduces the risk of account takeover fraud.
Educating employees to double-check the legitimacy of online communications
Before clicking on any links or sharing account details, employees should double-check whether the emails they receive are real or not. They should look for signs that an email or website may be fake, such as spelling mistakes and grammatical errors.
Identifying Red Flags
Identifying red flags is another critical step in detecting and responding to account takeover fraud. Some common indicators of potential ATO include unrecognized activity, changes to contact information, and unusual login attempts. By familiarizing yourself with these red flags and remaining alert to their presence, you can significantly increase your chances of detecting ATO fraud in its early stages.
If you notice any of these red flags on your accounts, it is important to take immediate action to protect yourself and your assets. This may include changing your passwords, enabling multi-factor authentication, or contacting your financial institution to report suspicious activity. By acting quickly and decisively, you can help minimize the potential damage caused by account takeover fraud and ensure that your accounts remain secure and protected.
Immediate Actions to Take
Upon detecting account takeover fraud, it is imperative to take immediate action to reduce potential damage. One of the most effective ways to detect account takeover fraud is by monitoring your accounts for any suspicious activity. This includes:
- Changing passwords for all affected accounts
- Enabling multi-factor authentication
- Contacting your bank or financial institution to report the suspicious activity
- In some cases, contacting law enforcement, particularly if the fraud has resulted in significant financial losses or identity theft.
In addition to taking these immediate actions, it is also important to remain vigilant and continue monitoring your account activity for any further signs of unauthorized access or suspicious behavior. By staying proactive and taking the necessary steps to protect your accounts, you can greatly reduce your risk of falling victim to account takeover fraud and ensure that your personal and financial information remains secure.
Advanced bot defense
Bot defense is one of the key strategies to defend against account takeover.
By detecting and stopping malicious automation, you can remove cybercriminals ability to launch a successful ATO attack. Without functional bots, attackers cannot scale up their account takeover efforts because the process will not be automated.
Organizations can minimize their risk of account takeover and its dire consequences by stopping bots in their tracks—and Kasada’s bot defense solution is powerful enough to protect businesses from even the most advanced bot attacks.
Eliminating bots from an adversary’s toolbox significantly minimizes their ability to launch an attack. Of course an attacker can still manually test credentials, but they would rather just move on to a site that their bots can get through and make a profit. Removing the profitability of an attack removes the attackers motivation.
You are the first line of defense in preventing ATO fraud
No one thinks they will become a victim of ATO fraud until it happens. Account takeover is a serious problem, and it’s important to be aware of the risks.
If you take precautions to prevent cyberattacks, you will be able to mitigate the risks and reduce the damage in the event of an attack.
At Kasada, we offer bot defense solutions that prevent ATO fraud
Our technology detects and stops account takeover and other forms of online fraud. Founded on cutting-edge research, Kasada’s solution will help you stay one step ahead of cybercriminals and their sophisticated techniques.
At Kasada, we are dedicated to providing you with an all-in-one solution to preventing ATO. We offer real-time detection, insights that tell you what’s a bot and what’s not, automated response to attacks in action, and never ask you to manage our solution.
Better yet, we’re true partners. With our 24/7/365 support, we act as an extension of your team.
If you’re ready to stop account takeover, reduce your total cost of ownership for security solutions, and secure your accounts more effectively than ever before, schedule a demo today.
Frequently Asked Questions
What is account takeover fraud?
Account takeover fraud (ATO) is a form of identity theft, where unauthorized individuals gain access to someone else’s online account without permission. This can include bank accounts, email accounts and social media profiles.
ATO is a growing problem, as criminals become more sophisticated in their methods. They can use stolen personal information to gain access to accounts, or use malware to take control of a device. This can lead to financial losses.
What is the common indicator of account takeover fraud?
Account takeover fraud is commonly indicated by multiple users requesting a password change, accumulation of unsuccessful login attempts, and customer transaction disputes.
What occurs during an account takeover?
Account Takeover (ATO) is an attack where cybercriminals gain unauthorized access to an online account with malicious intent. The attacker may seek to obtain the account holder’s login credentials through phishing, malware attacks, social engineering, or data breaches and may then use these to steal funds or information, disrupt service delivery, or generate fraudulent transactions.
ATO attacks can have serious consequences for both individuals and organizations. For individuals, it can lead to financial losses and identity theft. For organizations, it can lead to data breaches and reputational damage.
Is it easy to commit account takeover fraud?
Yes and no. Account takeover requires a combination of technical and non-technical skills.
Technical skills: To an extent, fraudsters need to understand coding, networking, and data analysis. They also need to be able to exploit vulnerabilities in systems and devices.
Non-technical skills: Malicious actors need to be able to obtain personal information like birthdates, addresses, and social security numbers. They can get this information through phishing or spyware attacks.
Although the average person might not have the knowledge or skill set to commit ATO fraud, there are thousands of cybercriminals who think taking over an account is like a walk in the park. There is also a growing number of professional account takeover gangs that specialize in this type of fraud.
What steps can individuals take to prevent account takeover fraud?
To prevent account takeover fraud, individuals should create strong passwords, use multi-factor authentication, and be vigilant of phishing attempts.
It is important to use a combination of upper and lowercase letters, numbers, and symbols when creating a password. Multi-factor authentication adds an extra layer of security by requiring additional information, such as a code sent to the user.
How can businesses protect themselves from account takeover fraud?
Businesses can protect themselves from account takeover fraud by strengthening cybersecurity. Cybersecurity can be improved by implementing two-factor authentication, using strong passwords, regularly updating software, and employing modern bot defense.
