Top 7 Ways to Detect Account Takeover Fraud


In the wide pool of cyber threats, account takeover fraud (ATO) stands out as a major concern, and it isn’t hard to see why. The impact of ATO fraud can be devastating, leading to identity theft, compromised privacy, and financial losses.  

According to the Javelin 2022 Identity Fraud Study, a staggering 22% of U.S. adults have fallen victim to account takeover attacks, highlighting the pervasive nature of this issue. In today’s digital landscape, where businesses hold vast amounts of user data, protecting this information has become a critical priority.

However, detecting and stopping account takeover fraud poses a considerable challenge. The ever-evolving tactics fraudsters use make it difficult to spot and avoid their attacks.

But what is ATO, and how does it work? And, most importantly, what measures can you take to secure your data and ensure customer’s trust? 

Let’s start by understanding the basics.

Definition of account takeover (ATO) fraud  

Account takeover, or ATO fraud, is a form of cybercrime where cybercriminals take control of individual or business accounts online.

They focus on gaining unauthorized access to legitimate user accounts, such as email accounts, banking accounts, e-commerce sites, and business accounts on various platforms like CRMs or internal systems, etc. After a successful account takeover, they can use the compromised accounts for various malicious activities.

An example is when a fraudster uses your email address to send phishing emails, uses the information they gained to access other accounts, makes payments from your bank account, and much more…   

In this article, we’ll explore some of the risks of ATO attacks and their impact on businesses and individuals. Let’s dive in.

How does an account takeover happen? 

An account takeover attack unfolds through a series of carefully coordinated steps as cybercriminals slowly gain control of user accounts. Understanding how this process works will make you more aware of potential vulnerabilities within your and your users’ accounts. 

Typically, an account takeover involves the following stages:     

1. Identifying target accounts 

Cybercriminals select specific accounts based on various criteria aligning with their objectives. Targets may include individual bank accounts or e-commerce sites for stealing payment data; personal user accounts for identity theft, or employees within a particular company for access to sensitive business information.

2. Information gathering 

This phase involves studying the information essential for accessing the accounts. It could be patterns of user accounts, including the type of usernames (email or name-based), required credential combinations (such as length and complexity), the presence of Multi-Factor Authentication (MFA), and the domains used for platform access. Thorough information enables attackers to tailor their approach to exploit identified weaknesses effectively.

3. Acquiring or developing malicious bots  

To streamline the account takeover process, cybercriminals leverage automation tools and deploy malicious bots to execute their attacks. These bots may include phishing tools for deceptive attacks, credential stuffing bots to exploit reused passwords, or one-time password (OTP) bots for bypassing two-factor authentication. 

4. Fraudsters gain access to the targeted accounts     

Armed with acquired information and specialized tools, the attacker gains access to the targeted accounts by obtaining login credentials. This phase often involves exploiting vulnerabilities such as weak passwords (chris123, or 123456789, for example), users falling victim to phishing attempts, or leveraging previously exposed credentials from data breaches. 

5. Make unauthorized changes  

Once inside the compromised accounts, the fraudsters may make subtle or significant changes to settings, passwords, or contact information. These changes serve to increase their control, avoid detection, and enable the attacker to maintain access to the compromised account for as long as possible.

6. Carry out the attack  

With control secured, cybercriminals can execute various malicious activities, depending on their original intent. This may include financial transactions, data extraction, spreading malware, or using the compromised account to launch further attacks within a broader network.   

How to detect ATO attacks? 

Detecting account takeover (ATO) attacks requires a proactive approach. An account takeover fraud could happen with the speed of light, which is why you need to respond rapidly in mitigating suspicious bot signs. Detecting possible ATO attacks will help you avoid further and more significant damages.      

Here are some red flags for account takeover:  

1. Monitoring emails 

  • Phishing attempts: Attackers often try to steal login credentials through phishing emails. Suspicious messages with misleading links or attachments can reveal these attempts.
  • Account activity notifications: Legitimate platforms send email notifications for logins, password changes, or suspicious activity. Monitoring these can alert you to unauthorized access and possible account takeover fraud.  

2. Tracking IP addresses

  • Unusual login locations: If your account is accessed from a significantly different location than usual, it could indicate an attacker using a VPN or compromised device.
  • Multiple logins from the same IP: Fraudsters often use botnets or bot farms to carry out their attack. This usually involves multiple devices, all under the IP address of the bot farm or the botnet operator. That’s why multiple logins from the same IP are a strong indicator of an account takeover attack.

3. Unknown device  

  • Unfamiliar device logins: Fraudsters often use stolen or compromised devices to carry out their attacks. So, be alert to logins from unrecognized devices.
  • Change in device type: If your account, typically accessed from a phone, suddenly shows logins from a desktop, it could indicate suspicious activity.    

4. One device used for multiple accounts  

  • Linked accounts: Detect potential account takeover attacks by monitoring instances where one device accesses multiple accounts associated with you, meaning it could be an attacker using stolen credentials across platforms.  
  • Unusual account activity: Identify abnormal activities, such as purchases or transfers originating from the same device across multiple accounts.     

5. Unfamiliar changes     

  • Contact information changes: Pay attention to unauthorized modifications to your account, such as changes to phone numbers or email addresses. 
  • 2FA control changes: For easier access, attackers may try to change your two-factor authentication (2FA) settings. If you notice this feature is suddenly turned off, or a new verification account is added, try to investigate further…

6. Password reset requests    

  • Unexpected reset requests: Stay alert to unsolicited password reset requests you haven’t initiated. A high number of failed password reset attempts indicates someone might be trying to brute-force their way in.
  • Reset requests for multiple user accounts: A surge in password reset requests from many users on your platform is also a sign that someone is trying to get access to it.

7. Unusual messages from your account     

  • Spam or phishing messages: If your contacts receive unsolicited messages or emails from your account, it could be an attacker sending spam or phishing attempts.
  • Changes in social media activity: Monitor your social media accounts for unusual posts or messages you did not authorize, which could be a sign of account takeover fraud.       

Account takeover fraud prevention            

To minimize the risks associated with account takeover fraud, you can implement a combination of techniques and user-focused strategies. 

Here are some strategies to prevent account takeover fraud: 

  1. Rate limits on login attempts: The purpose of rate limiting is to set limits on how many times someone can try to access an account by trying different usernames and password combinations.
  2. Strong passwords: Encourage your users to create strong passwords that combine a mix of uppercase and lowercase letters, numbers, and special characters. This reduces the likelihood of fraudsters and their bots guessing or cracking the passwords.
  3. Multi-factor authentication (MFA): This method adds an extra layer of security for your and your users’ accounts. It requires users to provide additional proof of identity beyond just a password. This often involves a temporary code sent to a mobile device or generated by an authentication app. 
  4. CAPTCHA: Captcha challenges users to prove they are human by solving visual puzzles or entering distorted characters. This helps prevent automated bots from attempting to gain unauthorized access.
  5. Fraud detection systems: Advanced software systems analyze user behavior and transaction patterns to identify anomalies that may indicate fraudulent activity. Unusual login times, locations, or access patterns trigger alerts for further investigation.
  6. Regularly conduct a cybersecurity audit: Regularly monitor your account activity to detect unauthorized access. Track changes in account details, spending patterns, and device usage.   Check this article for best practices when conducting a cybersecurity audit
  7. Device fingerprinting: Device fingerprinting involves collecting and analyzing unique characteristics of a device, such as IP address, browser type, and operating system. This helps identify and flag suspicious login attempts from unfamiliar devices.
  8. Customer support verification: Implement stricter verification procedures for sensitive changes like password resets or account modifications.  

What are the consequences of an account takeover?  

The impact of account takeover fraud is not limited to just the targeted account. 

When personal accounts are compromised, the platform’s entire business can suffer unintended consequences. Similarly, attempts to steal sensitive business information from the platform itself put the privacy of its users at risk as well. 

Let’s explore the consequences of these attacks from both users’ and business perspectives:  

Consequences on your users

1. Privacy violation

Online users face constant risks of possible privacy invasion of their online assets. In a world where attackers may gain access to personal messages, photos, and other sensitive information, protecting one’s digital presence has become increasingly challenging. This often leads to emotional distress and damage to personal relationships.   

2. Identity theft

Account takeover often involves the theft of personal information, which can lead to identity theft. This can result in long-term consequences, affecting credit scores and causing various financial and personal hardships.   

3. Financial losses

Unauthorized access to accounts can lead to financial losses for users. Attackers may use stolen credentials to make fraudulent transactions, draining bank accounts and credit cards, leading to significant financial hardship.

4. Sell account information to the dark web

Stolen account details may be sold on the dark web, exposing users to further risks, including potential misuse by other cyber criminals.         

5. Use their credit card info for purchases

Fraudsters can use stolen credit card and bank account info for unauthorized purchases. If they manage to change some contact or other account information, they can use this info and make fraudulent purchases as many times as possible until they get caught.

6. Access the user’s other accounts’ info

Attackers may exploit the gained access to a specific account to retrieve information about the user’s other accounts, expanding the overall impact. The acquired information may be used to infiltrate other accounts on the same platform or provider, posing a broader threat to the user’s online presence.

7. Loss of digital assets

Account takeover may result in the loss of digital assets, such as photos, documents, or other valuable data stored in the compromised accounts.

8. Reputation damage

In cases where the compromised account is linked to social media or professional platforms, unauthorized access can lead to the spread of false information or damaging posts, tarnishing the user’s online reputation.  

Consequences on your business 

1. Financial loss

Businesses can suffer significant financial losses due to account takeover fraud. Stolen accounts may be used for fraudulent transactions, leading to chargebacks and loss of revenue.

2. Customer trust and loyalty

Account takeover incidents can erode customer trust in a business. If users perceive a lack of security, they may choose to discontinue using the services, leading to a loss of customer loyalty.

3. Reputation damage

Businesses may suffer reputational damage as a result of account takeover attacks. News of security breaches can spread quickly, damaging the company’s image and making it harder to attract new customers. 

4. Legal consequences

Businesses may face legal consequences if they fail to protect user accounts adequately. Compliance issues with data protection regulations can lead to fines and legal actions.

5. Increased security costs

To mitigate the risk of account takeover, businesses may need to invest in enhanced security measures, which can increase operational costs. This includes investments in advanced authentication systems, monitoring tools, and staff training.    

Blocking account takeover fraud with CHEQ Essentials   

An automated fraud detection solution will help you avoid all the hustle of detecting and avoiding ATO attacks and fraud.    

Our team of cybersecurity professionals knows fraudulent and bot activities inside out. CHEQ Essentials combines advanced algorithms and over 2,000 behavioral tests that can detect and block suspicious activity in real-time. 

This means you’ll save precious time by analyzing various aspects to detect fraudulent activity associated with your and your users’ accounts. Instead, the software solution will ensure that your accounts and data won’t fall victim to stolen credit account info, data leakage, or user information sold on the dark web and, after all, avoid the headache of legal consequences.

Take the account takeover fraud detection and prevention in your hands with our automated solution. Request your free trial and ensure the full data and privacy security of your accounts.         


What is account takeover vulnerability?    

An account takeover vulnerability is a weakness in a system or account settings that allows an attacker to gain unauthorized access to a user’s online account. 

Attackers may exploit vulnerabilities in a variety of ways. Weak passwords, phishing messages, or injecting malicious code into a website are some of the methods that allow them to attack vulnerabilities.

What is account takeover protection? 

Account takeover protection is a set of security measures used to prevent unauthorized individuals from gaining access to and control over online accounts. 

Some basic protection measures are using strong passwords, multi-factor authentication (MFA), regular security audits, educating users and employees, etc. 

Effective and full protection against account takeover fraud can be achieved by using automation software designed for fraud detection and protection.

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