What Is Account Takeover Fraud & How Do You Prevent It?

As internet services grow, our connectivity increases, but so do the associated risks. Account Takeover (ATO) has emerged as a major cybersecurity threat. Grasping the techniques behind ATO is essential for both individuals and organizations to protect their sensitive data and uphold trust in digital platforms. This blog will provide a detailed exploration of ATO fraud.

What is Account Takeover (ATO) Fraud?

Account Takeover (ATO) attacks occur when hackers gain unauthorized control of someone’s account. They often acquire stolen login details from the dark web, typically obtained through scams or data breaches. Using these details, attackers test various websites—such as travel, retail, and social media—to find valid accounts.

Once they have working credentials, attackers can either sell them or misuse the accounts, leading to identity theft. Many people reuse passwords and do not change them often, making it easier for hackers to use bots to try numerous combinations and take over accounts.

ATO attacks are particularly dangerous because they can bypass standard security checks by exploiting weaknesses in online systems. They not only result in financial losses but also damage trust in online services, harm reputations, and risk losing customers. Additionally, they raise concerns about privacy, data security, and regulatory compliance. Hackers can also exploit login pages on mobile sites or apps, using compromised accounts in various ways, such as stealing loyalty points or other benefits.

Evolution of ATO Attacks Over Time

ATO attacks have evolved in tandem with advancements in technology and cybercriminal tactics. What once may have been rudimentary exploits have since matured into sophisticated operations, facilitated by the proliferation of interconnected digital ecosystems. As security measures have strengthened, so too have the methods employed by malicious actors, necessitating constant vigilance and adaptive countermeasures.

Methods of Account Takeover (ATO) Fraud

Account Takeover (ATO) fraud is a multi-step process that involves compromising credentials, validating those credentials, and then exploiting or selling them for financial gain or other malicious activities. Understanding the methods and steps involved in ATO fraud is essential for recognizing and preventing these attacks.

Steps in ATO Fraud

1. Compromising Credentials

The first step in ATO fraud is obtaining the login credentials (username and password) of a target account. Cybercriminals use various methods to compromise credentials, including:

• Phishing Attacks: Sending deceptive emails or messages that trick users into providing their login information.
• Data Breaches: Exploiting vulnerabilities in systems to steal large volumes of credentials from databases.
• Malware: Installing malicious software on a victim’s device to capture keystrokes or extract stored login information.
• Social Engineering: Manipulating individuals into divulging their credentials through deceitful tactics.

2. Testing Account Validity

Once attackers obtain a set of credentials, they test their validity. This is often done through:

• Credential Stuffing: Using automated bots to rapidly test the stolen credentials across multiple websites, taking advantage of users who reuse passwords.
• Password Spraying: Attempting common passwords on a large number of accounts to find valid combinations.

3. Using or Selling Credentials

Upon verifying that the credentials are valid, attackers can either use them directly or sell them on dark web marketplaces. This leads to:

• Direct Use: Logging into the compromised accounts to steal personal information, perform fraudulent transactions, or further infiltrate connected accounts.
• Selling Credentials: Offering the stolen login details to other cybercriminals who may use them for various illegal activities.

4. Accessing Higher-Value Accounts

The ultimate aim of ATO fraud often involves accessing high-value accounts, such as:

• Bank and Financial Accounts: Gaining access to banking and financial services to steal money or make unauthorized transactions.
• Corporate Accounts: Compromising business accounts to steal sensitive data, conduct corporate espionage, or initiate fraudulent financial transfers.
• Email Accounts: Using compromised email accounts to reset passwords for other services, propagate phishing attacks, or steal sensitive information.

Additional Account Takeover Fraud Methods and Techniques 

1. Credential Stuffing 

Credential stuffing is a brute-force attack where cybercriminals use automated tools to test large volumes of username and password combinations on multiple websites. This method exploits the fact that many users reuse passwords across different platforms.

Exploitation of Password Reuse

Since many individuals use the same password for multiple accounts, attackers can leverage stolen credentials from one breach to gain access to other accounts. For example, if a user’s credentials are compromised in a data breach at one website, those same credentials can be used to access their accounts on other sites where they’ve used the same login details.

Impact of Data Breaches

Data breaches provide a rich source of stolen credentials for attackers. Once these credentials are leaked, they can be quickly circulated on the dark web, making them accessible to cybercriminals who use them in credential stuffing attacks.

2. Phishing 

Phishing involves sending deceptive messages designed to trick recipients into revealing sensitive information, such as login credentials.

• Traditional Phishing: Targets a broad audience with generic messages.
• Spear Phishing: A more targeted approach, aiming at specific individuals or organizations by using personalized information to increase credibility.

Importance of User Education and Awareness 

Educating users about the risks and signs of phishing is crucial. Awareness campaigns and training can help individuals recognize phishing attempts and avoid falling victim to them.

3. Malware 

Malware constitutes a significant threat in the realm of ATO fraud. Various types of malware are used by attackers to compromise accounts, and proactive security measures are crucial for mitigation.

Types of Malware Used for Account Takeover Fraud: 

• Keyloggers: Record keystrokes, capturing usernames, passwords, and other sensitive information as users type them.
• Trojan Horses: Disguised as legitimate software, trojans infiltrate systems to steal critical data and create backdoors for attackers.
• Spyware: Monitors user activities clandestinely, harvesting personal data, including browsing habits and login details.

4. Man-in-the-Middle (MITM) Attacks 

Man-in-the-middle (MITM) attacks are a serious cybersecurity threat where attackers intercept and potentially alter the communications between two parties without their knowledge. This type of attack can occur through compromised networks, such as unsecured Wi-Fi hotspots, or through malicious software that has infiltrated a user’s device. 

By eavesdropping on these communications, attackers can steal sensitive information, such as login credentials, personal data, and financial information.

5. Stolen Cookies  

Stolen cookies represent a significant cybersecurity threat. Attackers can hijack active sessions by stealing session cookies, which are small pieces of data stored on a user’s device that contain authentication information. 

These cookies allow websites to recognize users and maintain their logged-in status without needing to re-enter credentials. When attackers steal these session cookies, they can gain unauthorized access to the user’s account without needing the actual login credentials.

6. Hardcoded Passwords 

Hardcoded passwords are credentials that are embedded directly into the source code or configuration files of an application. While this might seem convenient for developers, it poses significant security risks. 

If the code is exposed—whether through a breach, accidental disclosure, or insider threat—these hardcoded credentials can be easily extracted and misused by attackers.

Security Risks

Hardcoded credentials are highly susceptible to exploitation, making it crucial to use secure methods for managing and storing passwords, such as environment variables or secure vaults.

7. Compromised API Keys

Compromised API keys grant unauthorized access to sensitive data or functionalities within an application, leading to data breaches and exploitation.

Potential Consequences

• Easy Exploitation: Hardcoded credentials are highly susceptible to exploitation. If an attacker gains access to the source code, they can readily extract these passwords and use them to gain unauthorized access to systems and sensitive data.
• Static Nature: Hardcoded passwords often remain unchanged over time, increasing the risk of compromise. Unlike dynamic credentials, which can be rotated regularly, hardcoded passwords are usually set once and forgotten, making them an easy target for persistent attackers.
• Widespread Access: If multiple copies of the code exist, the hardcoded passwords can be widely distributed, further amplifying the risk of exposure and misuse.

8. Network Traffic Sniffing

Network traffic sniffing is a technique used by attackers to intercept and analyze network communications to obtain valuable information, such as login credentials and personal data. This is often carried out on unsecured networks, where data is transmitted without encryption, making it easily accessible to cybercriminals. 

9. Mobile Banking Trojans

Mobile banking trojans pose a significant threat in the realm of cybersecurity. These malicious software are specifically crafted to pilfer financial information from mobile devices, targeting users’ sensitive data with stealth and sophistication. Often, they adopt deceptive tactics, disguising themselves as legitimate banking apps or other trusted applications, thereby luring unsuspecting users into downloading them.

Impact of Account Takeover (ATO) Attacks

Account Takeover (ATO) attacks can have severe effects on both individuals and businesses. These attacks go beyond immediate financial losses and can lead to a range of serious consequences:

Financial Losses:

For Individuals: Attackers may drain bank accounts, make unauthorized purchases, or transfer funds. Recovering from such losses can be challenging and time-consuming.

For Businesses: The financial impact includes not only stolen funds but also costs related to investigating and fixing the breach. For example, the British Airways data breach in 2019 resulted in €230 million in fines and compensation.

Identity Theft:

ATO attacks often lead to identity theft, where personal information like Social Security numbers and credit card details are stolen. This can cause long-term issues such as damaged credit scores and misuse of personal data. The 2017 Equifax breach, which exposed 147 million people’s information, is a notable example.

Reputational Damage:

Companies affected by ATO attacks can suffer significant reputational damage. Customers may lose trust, leading to a loss of business and a tarnished brand image. The Yahoo breaches of 2013 and 2014, which compromised 3 billion accounts, severely impacted the company’s reputation.

Negative User Experience:

Victims of ATO attacks may experience account lockouts, unauthorized transactions, and a lengthy recovery process. This can lead to customer frustration and decreased loyalty. For instance, eBay users faced difficulties accessing their accounts following a major ATO incident in 2014.

Data Theft and Its Consequences:

Data theft is a core issue in ATO attacks. Hackers accessing accounts can steal personal details, financial records, and proprietary data. This theft can lead to identity theft, fraudulent transactions, and privacy invasions. Businesses may face regulatory fines and legal liabilities, impacting their competitiveness and innovation.

Real-World Examples:

Facebook (2018): A breach allowed hackers to access 50 million accounts, leading to privacy concerns and financial losses for the company.

Robinhood (2021): Attackers accessed user accounts, liquidating assets and causing financial losses and recovery challenges for victims.

Uber (2016): A breach exposed 57 million users’ data, leading to reputational damage and regulatory fines.

Overall, ATO attacks not only cause financial harm but also erode trust, damage reputations, and affect user experiences. It’s crucial for both individuals and organizations to be aware of these impacts and take steps to protect themselves from such threats.

Check out our recent article to discover key strategies for preventing account takeover attacks.

How Sensfrx Help with Account Takeover Fraud

Sensfrx’s Account Takeover protection services offer a host of features and benefits designed to empower organizations with proactive defense capabilities:

Comprehensive Protection for Applications, APIs, and Microservices: SensFRX provides end-to-end protection for digital assets, encompassing web applications, APIs, and microservices. By securing every facet of the digital ecosystem, organizations can mitigate the risk of ATO attacks across their entire infrastructure.

• Web Application Firewall (WAF): Sensfrx’s Web Application Firewall (WAF) acts as a virtual barrier against a wide array of web-based threats, including SQL injection, cross-site scripting (XSS), and malicious file uploads. By inspecting incoming web traffic and enforcing granular security policies, WAF ensures the integrity and availability of web applications.

• Runtime Application Self-Protection (RASP): Sensfrx’s Runtime Application Self-Protection (RASP) technology goes beyond traditional perimeter defenses, providing real-time monitoring and protection against runtime threats. By embedding security controls directly into the application runtime environment, RASP mitigates the risk of ATO attacks by detecting and responding to suspicious activities in real-time.

• API Security: APIs represent a critical component of modern digital ecosystems, making them prime targets for ATO attacks. Sensfrx offers comprehensive API security solutions, including authentication, authorization, and traffic encryption, to safeguard APIs against exploitation and unauthorized access.

• DDoS Protection: Distributed Denial of Service (DDoS) attacks pose a significant threat to the availability and performance of online services. Sensfrx’s DDoS protection capabilities leverage advanced mitigation techniques to detect and mitigate volumetric, application-layer, and protocol-based DDoS attacks, ensuring uninterrupted service delivery.

• Attack Analytics: Sensfrx’s attack analytics capabilities provide organizations with actionable insights into ATO threats and attack trends. By analyzing traffic patterns, detecting anomalies, and correlating threat intelligence data, organizations can proactively identify and mitigate ATO attacks before they escalate.

• Client-Side Protection: ATO attacks often exploit vulnerabilities in client-side components, such as web browsers and mobile applications. Sensfrx offers client-side protection mechanisms, including secure coding practices, content security policies, and browser security controls, to mitigate the risk of client-side exploits and data exfiltration.

In conclusion, Sensfrx’s Account Takeover protection services empower organizations with the tools and capabilities needed to defend against the ever-evolving threat landscape. 

By leveraging advanced technologies such as WAF, RASP, API security, and DDoS protection, organizations can fortify their defenses and safeguard their digital assets against the perils of ATO attacks. 

With Sensfrx as a trusted partner, organizations can navigate the complexities of cybersecurity with confidence, ensuring the integrity, availability, and resilience of their digital infrastructure.