Account Takeover Fraud: A comprehensive guide for businesses

Account Takeover Fraud

Account takeover fraud is a growing concern for consumers, banks and businesses today. It’s a type of fraud that occurs when a fraudster gains access to a user’s account and uses it to commit different forms of fraud. The criminal obtains personal information from legitimate users, such as passwords and account numbers, to access and use their financial accounts without authorisation. With the objective to make purchases, transferring money, or access other accounts linked to the victim’s account.

The consequences of account takeover fraud can be devastating and range from identity theft and financial losses to reputational damage. Leading to serious implications for consumers and businesses, so it’s important to understand what it is and how to protect yourself from it. With the right knowledge and proactive measures, individuals can help keep their sensitive information and finances safe from account takeover fraud. Here we’ll discuss what account takeover fraud is, how it works, how to recognise it, and how to protect yourself from it.

What is Account Takeover Fraud (ATO)?

Account Takeover Fraud (ATO) is a form of cybercrime or fraud where a fraudster gains access to an individual’s online account and then uses it to commit financial or other types of fraud. It typically involves the criminal using stolen credentials to gain access to the victim’s account, which can include bank accounts, credit cards, or even social media accounts.

This type of fraud is becoming increasingly common as more and more people use online banking and online services such as shopping services. ATO can be extremely difficult to detect and can cause significant financial losses for both, customers and organisations.

How does Account Takeover happen?

Account Takeover is a type of fraud which involves taking control of an individual’s or an organisation’s online account. It is a serious crime and can have serious financial and privacy consequences. It can be done in several ways, most commonly by using stolen passwords and usernames.

Although attackers are becoming more sophisticated in their techniques, the most common way for attackers to gain access to an account is by stealing login credentials such as a username and password and there are several ways that account takeover can occur, including phishing, smishing and fishing, brute force attacks, malware, and social engineering.

Cybercriminals use phishing techniques to trick victims into revealing their passwords and usernames. They may send emails or text messages that appear to be from a legitimate source, such as a bank or online retailer, and ask the victim to provide confidential information, such as usernames, passwords, and credit card numbers. Once the criminals have this information, they can access the victim’s account and perform Account Takeover Fraud.

In addition to using stolen credentials, criminals may also use malware to gain access to an individual’s or organisation’s accounts. Malware can be installed on a victim’s computer or mobile device, allowing criminals to access their accounts without permission.

Account Takeover Fraud can have serious financial and privacy consequences. Criminals may use stolen information to make unauthorised purchases, transfer funds, and access sensitive information, such as financial information or passwords, leading to other fraudulent activities such as purchasing goods and services or transferring funds. Victims of Account Takeover Fraud may have to pay for unauthorised purchases, face legal repercussions, and have their credit ratings damaged.

What types of businesses do ATO attacks target?

ATO attacks typically target businesses of all sizes, from small, local businesses to large, multinational corporations. The types of businesses most targeted by account takeover fraud vary, but some of the most common targets are:

  • Banks
  • Credit card companies
  • Financial institutions
  • Retailers
  • E-commerce sites
  • Other online payment services
  • Insurance companies

Criminals can use stolen information from any of these businesses to gain unauthorised access to accounts, make unauthorised purchases, or transfer funds to other accounts. Other types of businesses that may be vulnerable to this type of fraud include those that handle sensitive customer data, such as healthcare companies.

Additionally, businesses that rely heavily on digital payment systems, such as those involved in online gaming and cryptocurrency trading, are particularly vulnerable to this type of attack. To protect themselves, businesses must take steps to ensure that their customers’ data is secure and that they have adequate measures in place to detect and thwart account takeover fraud attempts.

Account takeover fraud is a type of fraud in which a criminal gains access to an individual’s or business’s accounts and uses them to steal funds or commit other crimes. This type of fraud can be devastating for businesses, as it can put their finances and reputation at risk.

Although businesses of all sizes and types are targets for account takeover fraud. Small businesses are particularly vulnerable to this type of fraud as they often lack the resources to detect and investigate it. In addition, criminals often use stolen information from smaller businesses to commit fraud against larger companies. This can result in significant losses for both the larger business and the smaller business initially targeted.

Which methods do fraudsters use to commit Account Takeover?

Account Takeover Fraud is a common and increasingly prevalent form of fraud. There are several methods used by fraudsters to commit ATO fraud, including:


Phishing is a type of fraud where fraudsters send emails, text messages, or malicious websites claiming to be legitimate organisations. The goal is to trick victims into providing personal information, such as passwords, financial information and login details of their online accounts.


Smishing is a form of phishing that uses SMS text messages to trick people into giving up sensitive information. It usually involves sending a text message that contains a malicious link or a message that asks for sensitive information or installing malicious software on a victim’s device.


Vishing is the fraudulent practice of phishing which uses social engineering over the telephone system to gain access to private personal and financial information for the purpose of financial reward. It is a form of a phishing scam where a fraudster uses a voice call, VoIP call or voice message to try to deceive the recipient into providing sensitive information such as credit card numbers, banking information, or passwords.

Identity theft

Identity theft occurs when an individual unlawfully obtains someone else’s personal information for their own benefit. This can include stealing an individual’s Social Security Number, driver’s license number, bank account number, or other sensitive information. Once the fraudster has this information, they can use it to open new accounts and make purchases in the victim’s name.

Malware or viruses

Malware and viruses are other methods used by fraudsters to commit Account Takeover Fraud. They are a type of malicious software that can be installed on a person’s computer or device without their knowledge and used to steal personal information.

Social engineering

Social engineering is a technique used by fraudsters to manipulate people into revealing confidential information. This can include impersonating a legitimate organization, creating a sense of urgency, or offering incentives for providing personal information.

Data breaches

Data breaches are a major source of Account Takeover Fraud. Data breaches occur when a company’s security measures are inadequate and hackers are able to gain access to sensitive information. Once the fraudsters gain access to this information, they can use it to access accounts and make purchases in the victim’s name. 

Sim swapping

Sim swapping is a type of fraud where a criminal tricks a mobile phone carrier into transferring your phone number to a sim card that the criminal controls. This allows the fraudster to access your accounts and take control of your personal information. Sim swapping allows the fraudster to intercept messages sent to the customer, such as one-time passwords used for two-factor authentication and use them to gain access to the victim’s account.

Man-in-the-Middle (MitM) Attacks

MitM attacks are a type of cyber-attack where an attacker secretly intercepts and relays communications between two parties who believe they are directly communicating with each other. The attacker can read, insert, and modify messages as they are sent in order to gain access to sensitive information or disrupt communication.

Brute force credential cracking

Brute force credential cracking is a type of hacking technique in which automated software is used to guess passwords and other login credentials by systematically trying all possible combinations of words, numbers, and symbols until the correct one is found.

Ransom attacks

Ransom attacks are cyber-attacks in which malicious actors gain unauthorised access to a computer system, encrypt data or disrupt services, and demand a payment in exchange for restoring access to the system or data. The threat of a ransomware attack is typically delivered via an email that contains malware.

Credential tracking

A credential tracking attack is a type of attack in which an attacker attempts to gain access to a user’s sensitive information, such as passwords and usernames, by tracking the user’s actions and movements online. This type of attack typically involves the attacker monitoring a user’s activity on a website or social media platform.

Credential stuffing

A credential stuffing attack is a type of cyber-attack in which the fraudster attempts to gain access to a user’s account by using a list of stolen usernames and passwords. The attacker then takes the list of credentials and runs them against a website or application to breach the security of the site or application.

Password spraying

Password spraying is a type of brute-force attack that involves trying a single password against many different accounts, rather than trying many different passwords against a single account. This type of attack is less time-consuming and more successful than trying one password against a single account.

For more information, have a look at the 5 top types of ATO fraud scenarios.

How to protect yourself from Account Takeover?

One of the most important steps to protect yourself from account takeover is to create strong and unique passwords for each of your online accounts. It is important to create passwords that are at least 8 characters long and include a combination of letters, numbers and symbols.

Additionally, you should change your passwords regularly and avoid reusing the same password for different accounts. Other than that, it is also important to enable two-factor authentication (2FA) for all your accounts. This will add an extra layer of security as it will require you to verify your identity through a code sent to your phone or email address.

Furthermore, always be cautious when clicking on suspicious emails or links. Do not click on any links in emails from unknown senders and never provide your personal information in response to an email. Lastly, it is important to keep all your software and devices up to date as the latest security patches may protect you from potential threats. By following these simple steps, you can protect yourself from account takeover.

Follow the next tips to protect yourself from ATO fraud:

  • Use strong and unique passwords and never share them with anyone
  • Enable two-factor authentication (2FA)
  • Monitor your accounts regularly
  • Be alert for suspicious activity
  • Avoid clicking on links in emails or text messages from unknown senders.
  • Don’t save passwords on your devices
  • Don’t give personal information in response to a request from an email or text message Use a password manager
  • Monitor your credit reports
  • Avoid using public Wi-Fi for sensitive activities
  • Install antivirus and antispyware software and keep it up to date

How can organisations detect Account Takeover fraud?

Account Takeover fraud is a serious issue that organisations must be aware of and take steps to prevent. To detect Account Takeover fraud, organisations need to have a comprehensive fraud detection system in place that can identify when an account has been taken over. This system should include a combination of manual and automated processes.

Organisations need to monitor for suspicious activity and patterns of behaviour that may indicate an account takeover. This can include regularly reviewing login histories, tracking changes to contact information and monitoring for unusual account activity. Any suspicious activity should be flagged and investigated immediately.

Organisations can also use a variety of tools to detect account takeover fraud, such as account takeover prevention software and identity verification solutions. These tools can help detect and prevent fraud by monitoring suspicious activity, verifying the identity of users, and providing alerts when there are changes to contact information or account settings.

Organisations should also implement stronger authentication methods, such as two-factor authentication (2FA), which can make it more difficult for criminals to gain access to accounts. Additionally, organisations should regularly review their security policies and procedures and update them as needed to ensure they are up to date.

By implementing these measures, organisations can take steps to protect their accounts and detect Account Takeover fraud.

5 steps banks can take to prevent Account Takeover fraud

The following 5 steps describe how banks can adopt different techniques to prevent ATO fraud.

Using Artificial Intelligence (AI) based detection systems

Artificial Intelligence (AI) based detection systems can be used to prevent account takeover fraud. AI-based systems can enable Machine Learning (ML) to use sophisticated algorithms and powerful technology to analyse user activity and detect suspicious activity. These systems detect anomalies in user behaviour, such as unusual login attempts, or large amounts of money being transferred out of the account, which can alert the user and help them to prevent fraud.

AI-based systems can also use facial recognition technology to verify the identity of the user before allowing access to the account. By using AI-based detection systems, users can be confident that their accounts are secure and that their personal information is safe from fraudsters.

Multi-Factor Authentication (MFA)

Multi-Factor Authentication (MFA) is an invaluable tool to protect companies from account takeover fraud. It requires multiple authentication factors such as passwords, biometrics, or one-time-use codes to access an account. Adding an extra layer of security makes account takeovers much more difficult for fraudsters. MFA also helps protect against phishing attacks by ensuring that users are entering their credentials into the correct site.

Companies can also set up alerts and notifications to detect suspicious activity and respond quickly if an account has been compromised. With MFA, companies can rest assured that their accounts and data are better protected against account takeover fraud.

Liveness detection for face recognition

When liveness detection is used for face recognition, we can effectively prevent ATO thanks to the process of authenticating the identity of a user by ensuring that the user is present and alive at the time of access. It helps to verify that the person trying to access the account is the one who owns it.

Similarly, face recognition can be used to compare the person’s facial image with the stored one in the database. This helps to ensure that the right person is accessing the account. By combining liveness detection and face recognition, account takeover fraud can be effectively prevented.

Obtain the full picture

Account takeover fraud is growing exponentially and it’s essential to obtain the full picture of the customer journey to prevent it. To do this, fraud orchestration is essential. Fraud orchestration is the ability to make decisions on user activity and act before a fraudster takes over the account of a legitimate user. This is achieved by automating the rules, processes and customer interactions across multiple channels and systems.

Fraud orchestration enables organisations to analyse data from multiple sources and get a clear, holistic view of fraud patterns. With this view, organisations can better detect and prevent account takeover fraud, as well as identify customer behaviour patterns that indicate potential fraud. Fraud orchestration also enables organisations to create custom rules and processes to quickly detect and prevent account takeover fraud and protect their customers. By using fraud orchestration, organisations can obtain the full picture of fraud, allowing them to prevent and detect account takeover fraud more efficiently and effectively.

Account monitoring system

To protect against ATO fraud, an account monitoring system is essential. It is designed to detect any suspicious activity on user accounts, such as unauthorised logins or transactions, and alert you so that you can take appropriate action. This system can also be used to track any changes made to your account settings, such as password reset requests or address changes. By keeping an eye on your accounts and monitoring them regularly, you can help ensure that your account is safe and secure from account takeover fraud.

Prevent Account Takeover with Udentify 

Udentify is a revolutionary way to prevent account takeover. It helps organisations securely protect their sensitive accounts from unauthorised access. It uses a unique combination of AI-Powered facial verification and liveness detection to verify the identity of the user. It eliminates the need for passwords and is much more secure than traditional authentication methods.

Udentify uses biometric technologies to measure and analyse the user’s unique physiological characteristics. This includes facial recognition and voice recognition. With this data, it can accurately identify the user and authenticate their identity and avoid fraudsters using a DeepFake to impersonate the real user. This helps to protect user accounts from unauthorised access to detect and prevent identity fraud and account takeover.

Udentify is an innovative way to protect accounts from account takeover. It uses cutting-edge biometric technologies and machine learning to accurately identify the user.

Account Takeover protection with aiReflex

Overall, ATO fraud is becoming increasingly common and is a serious threat to personal and financial security. aiReflex is a fraud prevention system that provides an extra layer of protection by using AI technology to detect suspicious activities.

Account Takeover protection with aiReflex is a powerful security solution to keep your customers’ accounts safe and secure. It can identify anomalies in user behaviour, detect malicious bots, and block fraudulent transactions. aiReflex works by analysing the user’s activity and other data points to identify suspicious activities and it’s constantly updated with the latest security threats to ensure your accounts stay secure.

With aiReflex, you can be assured that your customers’ accounts are protected from fraud and account takeover fraud. In addition, aiReflex also provides real-time alerts for suspicious activities and can even take immediate action to protect your accounts after a fraud score is given. It is a great solution for businesses that are looking for an extra layer of protection and prevention of account takeover fraud.

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