The Rising Threat of Account Takeover – How Account Takeover Software Can Savvy Businesses

Account takeover fraud is a rising threat. Frequent and massive data breaches have given bad actors easy access to countless username-password combinations.

The direct costs of this type of fraud can be huge, ranging from chargebacks to inventory losses. But the indirect costs are even more remarkable, straining customer relationships and damaging brand trust.

Increased traffic

In the race for customer loyalty and new revenue streams, digital businesses often need to pay more attention to an essential step: ensuring fraudsters do not take over user accounts. When attackers gain control of an account, they steal money and information and damage the brand’s reputation. They can even use the account to conduct more sinister crimes like drug and human trafficking.

Cybercriminals acquire stolen credentials by purchasing them on dark web markets in bulk following data breaches or through phishing attacks. Those credentials are then used to launch automated bot attacks that attempt to log in to an online business platform using the stolen passwords and usernames.

These bots scale their efforts by accessing multiple travel, retail, banking, social media, and e-commerce sites to test login credentials until a valid combination is discovered. The attacker then sells the list of verified credentials for a profit or uses the stolen information to commit account takeovers and other fraudulent activities.

Typically, the first thing hackers do after a successful takeover is to purchase goods or services from the victim. For example, they might buy hotel rooms or airline miles stored in rewards accounts and not monitored as closely as credit cards or bank accounts. Once they have purchased these items, the thief can then use them to evade detection by performing phishing and spam campaigns that look authentic.

Cybercriminals can use tools such as machine-in-the-middle to infiltrate an account further to intercept unencrypted data between a device and a website. It can include mouse movements, keyboard entries, and touch gestures to determine if the behavior matches that of a human or bot.

Any business online is vulnerable to an account takeover attack, but these attacks are dangerous for financial institutions and companies that engage in large-scale transactions. In addition to the financial losses, they may harm the business’s reputation and result in unhappy clients.

However, these dangers can be reduced by installing strong authentication, identity management programs, and account takeover software. These dangers can be considerably decreased by mandating two-factor authentication, using strong passwords that utilize biometric verification, and implementing contemporary bot defense tactics that can detect and block malicious automation.

Authentication errors

Account takeover fraud is one of the most damaging cyberattacks that businesses face. Not only does it cause monetary loss for victims, but it also strains the company-customer relationship. Customers may stop spending with the company or even become frustrated at their inability to fix problems caused by criminal activity. It may result in unfavorable word of mouth, harm the brand’s reputation, and erode consumer confidence.

When criminals access a victim’s account information, such as passwords or email addresses, accounts are compromised. The criminal then uses that information to impersonate the account holder and carry out unauthorized transactions. That is why detecting when an account has been taken over is essential.

For example, if a customer’s email address is changed in their account management system, it should be flagged immediately as a potential sign of an attempted account takeover. It would enable the company to offer additional security measures like multi-factor authentication while suspiciously notifying customers.

Many hackers attempt to attack accounts through phishing scams, malware, and social engineering attacks. They then purchase stolen credentials on the dark web and use bots to continuously test logins on travel, retail, finance, eCommerce, and social media sites. This process can be used to gain unauthorized access, make unauthorized purchases, or cash in loyalty points.

Other accounts criminals target include healthcare, government services, and other online business organizations. Those who attack corporate accounts often seek to steal confidential information or obtain payment methods for ransomware attacks. This cyberattack can be particularly damaging to the company because it’s hard to detect and respond quickly.

While any business that conducts financial transactions online is susceptible to account takeover attacks, it’s especially critical for companies that maintain user accounts for their customers to monitor for these attacks. It includes e-commerce, travel and hospitality companies, and social media platforms that store personal information such as birthdates, addresses, and phone numbers.

Additionally, these companies should implement a backend monitoring system that tracks data transfer between the website and the backend servers. It can help identify suspicious IP addresses and timestamps that might indicate account takeover fraud is occurring.

Increased chargebacks

Account takeover fraud is a digital crime where unauthorized users access an account. Fraudsters can then exploit the account to make unauthorized transactions or cash in loyalty points. It’s a growing problem for online retailers, travel agencies, and other businesses maintaining user accounts. It can also have a significant impact on brand reputation and consumer trust. In addition, it can add to resource costs for remediation and recovery. Finally, it can lead to fines and lawsuits if the account holder’s identity is stolen.

To commit account takeover, hackers typically purchase stolen credentials on the dark web and then try to log in to an eCommerce store or other online portal using that information. They may use a variety of tactics to guess or brute-force the username and password. Malware can also be used to deceive workers into installing harmful software or clicking on nefarious links that collect their login information. Malicious automation, or bots, offers attackers speed and cost savings when launching an account takeover attack at scale.

Once fraudsters have taken over a customer’s account, they often attempt to change account details or notifications so the legitimate owner will not be alerted of their illicit activities. They may also transfer funds or make purchases on behalf of the account holder. It might cause the account holder and the company severe financial harm.

When account takeover fraud is detected, e-commerce companies may experience increased chargebacks as they fight for the rights of their customers. The best defense against this type of fraud is a multilayered system that combines many detection methods. These should include a firm password policy, two-factor authentication, and a robust set of behavioral analytics. A solution like Netacea Account Takeover Prevention protects customer accounts by imposing identity challenges and shutting down compromised ones.

The most common way cybercriminals steal money is by taking over an account and transferring funds to their bank account. However, the motivation for account takeover is not limited to financial crimes and can include more sinister activities such as drug and human trafficking. For this reason, detecting and protecting against all forms of account takeover is vital.

Customer dissatisfaction

Attackers steal fragments of user information and use them to execute a variety of scams, including account takeover (ATO). As businesses race ahead with innovation, they inadvertently leave behind virtual breadcrumbs that fraudsters can harvest with sophisticated techniques. Businesses must implement robust defenses to defend against the latest account takeover tactics.

While hackers facilitate most ATO attacks, the reality is that many attack scenarios go undetected due to their sophistication. For instance, attackers can leverage AI to create a deepfake of a high-ranking executive or trusted colleague to trick employees into transferring funds, sharing sensitive data, or giving up control over their corporate accounts. They can also use phishing and social engineering to impersonate IT support or customer service representatives to trick employees into revealing account login credentials.

According to a study, fraud losses caused by account takeover attacks are estimated at $16 billion annually. In addition to these financial losses, the reputational damage associated with many account takeovers can lead to brand and trust erosion, which can be hard to recover from.

To combat these rising threats, getting the right people in the room to address them is critical. That involves the Fraud and Payments departments and the Security/Risk, Product, and Marketing teams. Each of these groups has different goals and priorities, which can impact how they prioritize and respond to the risk of account takeover attacks.

Getting everyone on board requires educating them about the threats they face and how these attacks differ from traditional online fraud. It’s also important to speak in their language by putting the risks of ATO attacks into terms they understand, such as increased traffic or higher chargeback rates.

Once criminals access a user’s account, they can take full advantage of their digital presence by using the stolen credentials to shop at their favorite online stores or make travel or hospitality bookings with prepaid credit cards. Many consumers reuse passwords across dozens of sites, and criminals know this. That is why companies need to provide strong authentication protection and invest in solutions that monitor all aspects of the account to detect ATO.

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