Account Takeover Fraud: What Is It and How To Prevent It


Jan 20,2023

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We are all witnesses that cybercrime is on the rise. And while cybercriminals and online vandals usually target companies and large institutions, ordinary individuals are the most common targets of certain forms of electronic theft. One such type of computer intrusion with potentially serious consequences is account takeover fraud. Here, we’ll discuss what it is, how you can detect it and, most importantly, what you can do to prevent it.

What Is an Account Takeover Attack?

Account takeover is a form of identity theft where a cybercriminal gains access to somebody’s banking account information, social media profiles, email addresses, or other online accounts. The goal of the fraudster is to make a profit by using the value of the targeted account. This can be done in several ways. The consequences of an account takeover attack are usually fraudulent transactions - unauthorized shopping from the victim’s accounts or transferring funds to the fraudster’s own account. Cybercriminals may also decide to blackmail their victim or to sell the account to a third party.

According to hacking statistics and account takeover fraud statistics, ransomware attacks happen every 14 seconds. Believe it or not, about 30 million Facebook accounts were compromised in 2018. These numbers are a vivid illustration of the importance of protecting your online accounts.

How Does It Happen?

Account takeover attacks often start weeks or even months before the victim spots fraudulent activities on their account. To be precise, it takes an average of 196 days, and people who aren’t used to regularly checking their bank statements or credit reports can end up with unauthorized transactions going on for quite some time before they notice anything is wrong. There are many account takeover techniques, and spotting an attack might require some skill, but these are the most common ways of credentials stealing and performing account takeover fraud:

  • Credential stuffing - Attackers get a hold of leaked usernames and passwords and then use bots to try out various credential combinations on multiple websites in order to “crack the code.”
  • Credential cracking - This is also called “brute forcing,” as attackers utilize bots to hack the victim’s accounts. Using brute force and trying multiple values for user names and passwords helps attackers identify valid login credentials.
  • Phishing - In most cases, phishing attacks are executed via emails, text messages, or attachments that contain harmful links. Based on the survey whose goal was to determine if the participants would fall for a phishing scam, 61% of them would, and 24% have already experienced a phishing attack. The recent increase in account takeover fraud was driven by the COVID-19 pandemic, as the majority of people had to stay at home and perform many of their usual activities related to shopping and managing their finances online.
  • Weak passwords - If you’re in the habit of using the same weak password across all your accounts, what you are really doing is handing your credentials to cybercriminals on a silver plate. Research has shown that 45% of Americans use passwords of eight or fewer characters and 25% of them share their passwords with other people. These numbers are not encouraging, and the interesting fact is that in 2020, 14% of surveyees used the word “COVID” in their passwords.

Detecting and Preventing Account Takeover Fraud

As there are multiple ways through which fraudsters can gain access to your personal information, you should take all the possible steps to prevent it. Here are some tricks that can help you protect against an ATO:

  • Use strong passwords and DO NOT repeat them on multiple accounts.

Things to keep in mind when you’re creating a password are: It should be long, alphanumeric, and unique. If you can’t come up with such a password on your own or remember it, using a password manager is advisable, especially since the best password managers feature strong-password generators. Using this type of software is one of the best account takeover fraud protection solutions you can find, and it doesn’t have to cost you a dime - basic versions of most password managers are free.

  • Update your passwords regularly.

Another thing you can do to protect your sensitive information and online profiles is to change your passwords from time to time. Each time you come up with a new one, verify that it contains numbers, special characters, and upper and lowercase letters.

  • Use multifactor authentication.

Two-factor authentication has become something everyone should use. With this account takeover fraud protection tool, you’ll always be one step ahead of attackers since you’ll receive a notification each time someone tries to log into any of your accounts. Multifactor authentication can also incorporate facial scans and fingerprint biometric authentication.

  • Monitor your bank accounts frequently.

As we’ve previously mentioned, people usually forget to check their bank accounts or credit card statements. This is something you should frequently do as it takes only a few minutes and it’s highly beneficial. The more often you do it, the higher are the chances you’ll spot irregularities and minimize the damage of an account takeover fraud. If you see anything suspicious, contact your bank immediately to block the account.

  • Avoid using public Wi-Fi for online banking.

Even though public Wi-Fi is convenient, you should never provide sensitive info while on it. It would be best if you only did so once you establish a secure connection since public Wi-Fi makes it easier for intruders to access your information.

  • Improve your social media privacy.

Cybercriminals often mine social media in search of their next target. Therefore, you should limit your account visibility and the amount of personal information you share online. The chances of preventing an account takeover fraud attack are higher as you learn to keep your sensitive data to yourself.

Better Safe Than Sorry

Although cyberattacks and account takeovers are on the rise both in the US and globally, there are multiple steps you can take to strengthen the safety and security of your online accounts and social media profiles. By implementing good password practices and keeping your credentials private, you’ll save thousands of dollars and dozens of hours you stand to lose in case of an account takeover.


Is account takeover a form of identity theft?

Yes, you can define account takeover fraud as an example of identity or credentials theft because the attackers aim to steal the victim’s login information and use it for financial gain.

There are some nuances of meaning between the two terms, however. Account takeover happens when fraudsters get ahold of someone’s username and password and use it to access that person’s accounts. In the process, they change the passwords and lock their victim out of their own profiles. On the other hand, identity theft involves opening new accounts under the victim’s name and taking over their personal information.

What is bank account takeover fraud?

Bank account takeover is a form of cybercrime in which the attackers gain access to the victim’s bank or credit card account and use it to initiate unauthorized transactions. They can do this by using credential stuffing/cracking or by sending phishing emails and texts.

What is an account takeover attack?

An ATO attack is an attack in which fraudsters take over people’s accounts by stealing their usernames and passwords. When they manage to do this, depending on the type of the account, attackers can transfer the victim’s money to their own account, order new credit cards to be sent to their address, purchase various products using the victim’s money, launch phishing campaigns using the compromised profile, or even sell it on the black market.

How does account takeover fraud happen?

There are multiple scenarios. If you’re one of those people who use the same weak password on all their accounts, share their passwords freely, or don’t review their bank statements, you should consider changing your habits because they all make you vulnerable to ATOs.

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