Account Takeover Fraud: The Anatomy of an ATO Attack

Account Takeover (ATO)Fraud is on the rise. Research conducted by Security.org found that nearly a third of us –  29% – have experienced an account takeover. This percentage has increased from 22% in 2021. Social media accounts accounted for 53% of the takeovers, and victims lost about $180 on average.

ATO fraud fuels the underground fraud-as-a-service economy with compromised financial accounts, which are sold or exchanged for a variety of downstream attacks. 

Since these accounts are created by real users (unlike mass-registered fake accounts), they often contain valuable information such as financial data, and their activities are less likely to raise the suspicion of security solutions. This makes account takeover fraud a very lucrative business for cybercriminals. 

But what exactly is ATO fraud, how does it happen, and how can you prevent it? We’ll dive into these topics in this blog post.

What is Account Takeover Fraud?

ATO is a type of fraud occurs when malicious actors gain unauthorized access to a victim’s account, typically through stolen credentials, phishing, or exploiting security vulnerabilities. This can be an online account, a credit card account or other type of account.Once inside, fraudsters can make unauthorized transactions, steal personal data, or use the account to perpetrate further attacks. 

ATO fraud is a significant concern as increasing reliance on online services and weak security practices, like password reuse, make it easier for cybercriminals to exploit vulnerable accounts.

Understanding ATO attacks is crucial as these threats pose severe risks to both individuals and businesses. 

• For individuals, ATO fraud can lead to financial loss, identity theft, and significant emotional distress. 
• For businesses, the impact is even broader—ranging from direct financial losses and reputational damage to legal liabilities and loss of customer trust. 

As digital interactions grow, so does the importance of robust measures to detect and prevent account takeover fraud, safeguarding both users and companies from the far-reaching consequences of these attacks.

How ATO Attacks Work

There are three key steps to an ATO Attack:

1. Reconnaissance
   Fraudsters first gather information through data breaches, phishing attempts, or social engineering tactics like text messages or social posts. They obtain stolen credentials from sources like the dark web, use malware to extract login credentials, or employ credential stuffing – where stolen usernames and passwords or password combinations are tested across multiple sites.
2. Account Compromise
   To gain unauthorized access, attackers use techniques such as brute force attacks or password spraying, exploiting weak security measures like password reuse and the absence of multi-factor authentication (MFA). These vulnerabilities make it easier for attackers to breach accounts.
3. Account Exploitation
   Once inside, attackers exploit compromised accounts for financial theft, data exfiltration, or identity theft. 
4. Monetization
   They monetize these attacks by reselling credentials, conducting fraudulent transactions, or leveraging the access for further malicious activities, leading to significant losses for individuals and businesses.

Who Are the Targets of ATO Attacks?

Typical targets of ATO include e-commerce platforms, banking and financial services, financial institutions, and social media accounts. 

E-commerce accounts are targeted for unauthorized purchases and access to stored payment information. Banking accounts are attractive due to direct access to funds, personal financial data, and social security numbers, leading to theft and identity fraud. Social media accounts are exploited for spreading scams, phishing, or gathering data for further attacks. 

These sectors are targeted because they hold valuable assets and sensitive information that attackers can easily monetize.

Compromised accounts are commonly used for financially motivated downstream attack, such as: 

• An unauthorized withdrawal from bank accounts or fraudulent transactions using the credit/debit cards on file.
• Spam in a service feature that accepts user-generated content, including discussion forums, direct messages, and reviews/ratings, degrading platform integrity and brand reputation.
• Assuming a compromised user’s identity and launching phishing attacks on others in their social circle to steal credentials, personal information, or sensitive data.

Virtual “currencies” that are worth real money include reward points, promotional credits, and in-game virtual items, which can be harvested for real world gains.

A DataVisor post in Dark Reading describes some real-world account takeover attacks. In this article, we go into depth on how organized crime rings are performing account takeover attacks and account takeover fraud at scale. 

What Are the Signs of ATO Fraud?

Signs of a ATO activity often include unusual login behaviors, such as access from multiple locations or at odd times, which may indicate unauthorized attempts to breach an account. Changes in account information, like altered phone number, email address, passwords, or the appearance of unauthorized transactions, are also red flags, suggesting that an attacker has gained control.

Additionally, businesses may notice increased customer complaints and chargebacks, often stemming from fraudulent activities conducted through compromised user accounts. For instance, customers might report purchases they did not make, signaling that their accounts have been hijacked by bad actors who are exploiting their credentials for financial gain. These indicators collectively highlight the importance of monitoring for suspicious behaviors to promptly identify and mitigate ATO threats.

Real-World Examples of ATO Attacks

Real-world examples of ATO attacks include the 2019 breach of TurboTax accounts, where hackers used credential stuffing techniques to access users’ financial information, leading to fraudulent tax returns and financial theft. 

Another notable case is the takeover of Disney+ accounts shortly after the platform’s launch. Users reported their accounts being hacked and sold on the dark web. 

In both instances, the lack of MFA along with password reuse across different platforms made these accounts vulnerable. Robust security measures are an absolute necessity to help circumvent a successful ATO.

The Consequences of ATO Fraud

ATO fraud can have severe consequences for both individuals and businesses. Financial losses are a primary impact, including direct theft from compromised accounts, costs associated with recovery efforts, and potential fines for failing to protect customer data. 

Reputational damage is another significant consequence. Businesses can lose customer trust when accounts are compromised, leading to attrition and lost revenue. Additionally, ATO fraud can have legal and compliance implications, as organizations may face regulatory scrutiny and penalties if they fail to meet data protection and security standards.

ATO Fraud Prevention and Mitigation Strategies

Preventing account takeover (ATO) fraud requires a multi-faceted approach that combines strong security measures, advanced monitoring, and user education. As cybercriminals continue to develop sophisticated methods to exploit vulnerabilities, organizations must proactively implement strategies that protect against these evolving threats. 

By reinforcing account security, detecting suspicious activities early, and empowering users with knowledge, businesses can significantly reduce the risk of ATO incidents.

• Strengthening Security Measures: Implementing strong security measures is crucial in preventing ATO attacks. Beyond two-factor authentication, MFA adds an additional layer of security, requiring users to verify their identity through multiple steps, making unauthorized access more difficult. Some may even leverage biometrics for additional coverage. Regularly updating passwords, avoiding reuse, and enforcing strong password policies can significantly reduce the risk of compromised credentials. These practices make it harder for attackers to breach accounts through common tactics like brute force or credential stuffing.
• Monitoring and Detection: Proactive monitoring and detection are essential for identifying suspicious activities early and sending notifications. Behavioral analytics and anomaly detection help spot unusual patterns, such as login attempts from unexpected locations or devices. Leveraging AI and machine learning further enhances these capabilities by continuously learning from data to improve the detection of potential threats, enabling organizations to respond swiftly to any anomalies that could indicate an account takeover attempt.
• User Education: Educating users on security best practices is a critical line of defense against ATO attacks. Training programs should cover essential topics such as the importance of strong, unique passwords, recognizing phishing emails and social engineering tactics, and the use of MFA. Awareness programs help users identify and avoid common attack vectors, empowering them to protect their accounts proactively. By fostering a culture of security awareness, organizations can reduce the likelihood of ATO incidents.

Implementing these ATO prevention strategies helps organizations stay ahead of threats, protect their users, and maintain trust in their digital services.

The Role of Technology in Combating ATO Fraud

Fraud detection and prevention platforms are essential tools in combating ATO fraud, providing robust protection for both businesses and individuals. These platforms offer a multi-layered defense strategy that includes real-time monitoring, anomaly detection, and automated response mechanisms. 

By leveraging AI and machine learning to analyze vast amounts of data from transactions, login attempts, user behavior and other signals, advanced fraud solutions can identify patterns indicative of fraudulent activity, such as unusual access locations or high-velocity login attempts.

Implementing these solutions helps businesses safeguard their digital environments by detecting suspicious activities early and enabling a swift response to prevent unauthorized access to accounts.

Fraud platforms with these capabilities help to protect financial assets and maintain customer trust, by reducing the likelihood of fraudulent transactions and data breaches. For individuals, these platforms offer an added layer of security, ensuring that their accounts are shielded from unauthorized access and financial losses. Fraud solutions provide businesses with detailed analytics and reporting tools, as well, so they can refine their security measures over time, adapt to evolving threats, and continuously improve their defenses.

Beyond detection, these platforms also support businesses in compliance with regulatory standards by maintaining detailed logs of fraudulent activities and response actions, which can be crucial during audits or investigations. 

To sum it up, fraud detection and prevention platforms empower organizations to take a proactive stance against ATO fraud, protect their operations and reputation, and safeguard customers’ data.

Fight ATO Fraud with DataVisor

Datavisor protects businesses and individuals against the fallout of ATO attacks without adding friction to the customer experience. Leveraging machine learning, the platform analyzes web session logs, cross-account connections, digital fingerprints, profile information, and account activity to detect even the most hidden fraud patterns. 

DataVisor customers have experienced a 20% ATO detection increase, 94% detection accuracy, and up to $12 million in annual savings – all while ensuring a seamless experience for legitimate customers. 

To learn more about fighting ATO fraud with DataVisor, download our solution sheet.