Account takeover (ATO) fraud is rising, posing a serious threat to businesses and their customers.
According to a 2023 report, 29% of internet users experienced an account takeover attack, with social media and banking accounts being the most vulnerable targets. Moreover, the average corporate breach costs about $5 million, with larger organizations suffering more ATO attempts.
Given these numbers, companies must become hyper-vigilant in protecting sensitive data. They must consistently seek ways to prevent ATO fraud from compromising their organization and customers.
This article provides valuable insights to help you implement advanced account takeover fraud solutions to detect and stop sophisticated ATO attacks. Read on to gain a deep understanding of account takeover fraud and how to fortify your defenses with the latest fraud prevention tools.
What Is Account Takeover Fraud and How Does It Happen?
Account takeover fraud occurs when cybercriminals gain unauthorized access to customer accounts to steal funds, sensitive data, or both. Fraudsters employ various techniques to hack into accounts, including:
- Phishing emails: Fraudsters use malicious links or attachments that contain keylogging malware or ransomware. Once installed, the malware steals account login credentials and other personal information.
- Brute force attacks: This technique involves automated bots systematically attempting to guess weak passwords. Fraudsters then access accounts to change contact details and steal funds.
- Social engineering: Fraudsters make phone calls or messages to trick account holders into providing account access or divulging sensitive data.
- Stolen account credentials: By purchasing stolen credentials on the dark web, fraudsters gain illicit access to user accounts, enabling them to exploit them for fraudulent activities.
To commit ATO fraud, thieves monitor accounts to determine the best time to strike when detection is less likely. They then use the stolen credentials to access accounts, change account information, transfer funds, or make unauthorized purchases. They typically make several small transactions to evade fraud controls before executing larger, riskier ones.
As ATO attacks are often hard to detect, fraudulent transactions can go on for months before being discovered. By the time account holders notice unauthorized activity, the damage has been done.
Assessing Your Organization’s Vulnerability to ATO
ATO risk assessments should be done periodically to account for changes in IT infrastructure, business operations, and the evolving tactics of cybercriminals. Have your security team conduct an internal risk assessment to identify weaknesses cybercriminals could exploit. Be sure to consider both technical and human vulnerabilities.
Technical Vulnerabilities
Assess the strength of account logins and passwords. Review fraud prevention systems and see if machine learning and behavioral analysis techniques are utilized to spot anomalies signaling account takeover.
Some technical red flags include:
- Unusual login activity from new devices or locations
- Sudden changes to account information like contact details or passwords
- Spikes in failed login attempts
- Transfers of large sums of money to unfamiliar recipients
Human Vulnerabilities
Be sure to examine internal processes around account access, management, and oversight. Do employees have more access than needed to fulfill their job duties? Are terminated employees’ accounts promptly deactivated? Are regular audits done to review account privileges and access?
Some red flags include:
- Employees clicking on phishing links in emails
- Weak password security policies
- Lack of employee awareness and understanding of social engineering tactics
Survey employees to gauge their cybersecurity awareness and see if additional training is needed. Run phishing simulations to test if staff can detect and avoid malicious emails aiming to capture account access.
Implementing Effective Account Takeover Prevention Strategies
Once vulnerabilities have been pinpointed, prioritize resolving the most critical risks. Some solutions may require investing in more advanced account takeover fraud solutions, while others call for simple policy changes or education. Reducing the attack surface and strengthening defenses is key.
To effectively prevent account takeover (ATO) fraud, deploy a multi-layered solution that leverages both human and artificial intelligence.
Enable multi-factor authentication for customer accounts.
Multi-factor authentication (MFA) adds an extra layer of security by requiring additional verification, like a one-time password sent via text message or an authentication app. This makes it much more difficult for fraudsters to access accounts even if they have the password.
Monitor accounts for suspicious login activity and transaction anomalies.
Fraud detection solutions that utilize machine learning and behavioral analytics can detect account takeover attempts as they happen by identifying unusual login or transaction patterns. Real-time alerts allow security teams to take immediate action.
Educate customers on account security best practices.
Educating customers about account takeover fraud, phishing, and online safety is crucial. It helps make them partners in fraud prevention. Be sure to regularly inform users of the latest fraud threats. Additionally, advise customers to use strong, unique passwords and enable MFA whenever possible. They should be wary of phishing emails and monitor their accounts regularly for unauthorized activity.
Restrict account access to trusted devices only.
Requiring customers to register trusted devices provides an additional layer of account protection. Any logins from unknown or untrusted devices can then be denied, blocking ATO attempts.
Conduct regular audits of account access controls and security policies.
Account takeover techniques constantly evolve, so fraud prevention strategies must keep pace. Regular reviews of access controls, MFA enrollment, fraud alerting rules, and security policies help ensure maximum ATO protection.
Invest in an AI-based fraud detection solution.
Platforms like Fraud.net use advanced machine learning and behavioral analytics to detect sophisticated ATO attacks that often evade human detection. They can analyze huge volumes of data to spot anomalies and generate highly accurate ATO predictions.
Leveraging Fraud.net’s Advanced Protection Solutions Against ATO Fraud
Implementing a multi-layered solution combining human expertise and technological capabilities offers the strongest protection against the complex threats of account takeover fraud. At the same time, staying vigilant and proactively addressing weaknesses will minimize opportunities for fraudsters to take over accounts and wreak havoc.
Fraud.net offers a unified solution. It leverages machine learning, anomaly detection, and behavioral analysis to help identify and stop ATO attacks. Our AI-powered platform provides risk assessment throughout the customer journey. It can track suspicious activity with easy-to-use tools and provide real-time, actionable alerts for every transaction. Additionally, the risk assessment begins the moment a customer logs in and performs transactions. It also keeps track of any changes made to account details and maintains trusted devices and addresses.
With Fraud.net, you have a multi-layered defense against account takeover and related fraud. Request a demo today to begin safeguarding your customer accounts and data.