Account Takeover (ATO) fraud poses a significant threat to online businesses in nearly every industry. In this article, learn how to prevent it from impacting yours.
In order to keep your online business running smoothly, there are certain precautions that you need to take. While we are all familiar with the threat that fraudsters pose to merchants and consumers alike, there’s a particular technique that is gaining popularity among cybercriminals called account takeover.
Fortunately, preventing an account takeover isn’t impossible. With a proper prevention plan in place, your business should be able to successfully stop ATO fraud from occurring and protect your customers' private information.
In this article, we'll focus on explaining how account takeovers happen and outline specific steps you can take to stop them. Let's dive in.
What Exactly Is an Account Takeover?
An account takeover occurs when an unauthorized party gains access to an account that you (or your customers) own. For example, you might wake up one day to find that your brand's social media account has been compromised – something that comes with a large number of consequences.
The same can be said about your administrative account for your website, your email, etc. There are two primary goals that hackers have when committing account takeover fraud:
- Procuring sensitive data (such as financial information)
- Intentionally damaging an organization’s reputation
To elaborate on this last point, fraudsters sometimes aim to pose as a brand while posting offensive or questionable content. Unfortunately, a situation like this can be highly difficult to recover from — even if you explain everything afterward.
How Does Account Takeover Fraud Happen?
There are a variety of approaches that are taken to successfully commit ATO fraud. Here are several of the most common:
- Purchased stolen credentials: Whenever a large-scale data breach occurs, that stolen information is typically sold illegally online for fraudsters to purchase and use.
- Credential stuffing: This occurs when fraudsters automate login attempts using the stolen credentials that they purchased online. Since many internet users reuse the same passwords, it makes it easy for fraudsters to test those credentials across multiple sites in an attempt to access your private accounts.
- Phishing attack: Mass phishing email campaigns are another popular way for fraudsters to acquire login credentials. These attacks attempt to deceive recipients into believing that the phishing message is offering something they want — for example, an unexpected refund from their bank — and getting them to take the “bait” by handing over their personal information (banking credentials, passwords, etc).
What Can I Do to Prevent Account Takeover Fraud?
An important thing to understand about ATO fraud is that it can happen to anyone. Some of the world’s most powerful companies with teams dedicated to protecting their customers’ information have fallen victim to account takeover fraud (think Facebook, Yahoo, First American). What’s stopping it from happening to your company?
It’s critical that you have a multi-layered prevention plan that will protect your organization and its customers from the looming threat of fraud attacks.
Let’s take a look at some of the most effective ways that you can do so.
1. Utilize ATO fraud protection software
Many online merchants overlook the importance of having a dedicated solution to preventing accounts takeover and sign-up fraud. Recent fraud statistics show an increase in ATO cases by at least 300% since 2019, costing companies an estimated $16.9 billion in damages. As breaches around the globe give rise to new and innovative tactics, businesses must meet the challenge with a new approach to securing their customer’s information.
Vesta meets this challenge with a uniquely orchestrated approach that combines biometric evaluations with machine learning to discover and stop account fraud before it occurs. Information about every login is analyzed (such as user ID, number of failed login attempts, user behavioral data, IP location), to accurately determine if a fraudster is trying to gain unauthorized access to one of your customers’ accounts.
2. Two-Factor Authentication
For those who are unfamiliar with this term, two-factor authentication (2FA) requires multiple forms of personal information in order to log in. With 2FA, users won't be able to log into a specific account until they input a code that was sent to their email address or phone number. They also may be required to provide some form of biometric information (fingerprint, face ID, etc) to gain access to their account.
This safeguard is put into place to help ensure that whoever is logging-in is the legitimate owner of the account. It’s a simple and highly effective approach to slowing down fraudsters from gaining unauthorized access to your users’ accounts.
3. Practice Safe Browsing
It should go without saying that safe browsing is an essential piece to preventing ATO fraud. This means avoiding suspicious websites, reporting or deleting emails from unknown senders, and never clicking on suspicious links in emails.
It’s fairly common for phishing attacks to send hyperlinks that redirect to a false version of a particular webpage. After you input your login information on the fake webpage, the data is sent directly to the fraudster for their personal use.
It’s your responsibility to remind both your website users and your organization that they need to regularly change their password and never give out their login credentials.
It's Time to Take Action and Stop Account Takeover Fraud
Protecting your users’ private information is paramount, which is why it’s essential that you have a proper ATO fraud prevention plan in place. With the tips we outlined in this article, you should have no problem creating a basic plan to help stop account takeovers from happening on your website.
If you're interested in finding a more complete solution to fight back against ATO fraud, you may consider Vesta's end-to-end fraud prevention platform. We can offer a solution specifically designed to stop account takeovers so you can protect your revenue and eliminate the fear of fraud.
Feel free to reach out to us today and see how we can help.