You may have heard that account takeover (ATO) is on the rise for all types of companies, from e-commerce merchants to SaaS businesses. The first step to protecting your business is understanding the problem. Let’s take a look at why ATO is growing.
What is account takeover?
ATO, also known as account compromise, is just what it sounds like: a bad actor getting access to a good user’s account. Once that access is achieved, the fraudster can use the account for all kinds of opportunistic and malicious ends. As part of the ATO, the fraudster may change the user’s password to lock them out, and change their email address so the good user doesn’t receive any additional communication about activity on their account.
Some of the ways fraudsters profit from ATO include: using up stored credits or rewards points, making high-value purchases, buying digital goods, scamming other users and phishing, creating fake listings, spamming, selling the credentials on the black market, extorting money from the legitimate account owner, and assuming the identity of the real user.
Why are fraudsters attracted to ATO?
ATO can be more profitable than credit card fraud. First of all, many businesses do not have a robust solution in place for stopping ATO, so the window of time for exploiting the information before detection is typically longer. Furthermore, a credit card can only be used until it’s canceled. But even once an ATO is discovered, the fraudster still has access to the credentials or personal information, which can be used to create a new fake account or a synthetic identity.
ATO also provides fraudsters with the advantage of built-in trust. New accounts are more likely to be flagged for fraud or given more scrutiny. If the account already exists and is connected to a legitimate user, the fraud is more difficult to detect and the fraudster has more time to operate before they are discovered.
The era of data breaches
According to the Sift Science Fraud-Fighting Trends report, 48% of online businesses observed a rise in ATO last year. How did ATO gain such traction over the past few years? You need only look at the big cybersecurity headlines to get a clue. We’ve entered the era of the data breach.
From Equifax to Yahoo, from eBay to Tesco Bank, the scale and sophistication of breaches is growing. Some 554 million records were compromised in the first half of 2016 alone, according to the Gemalto Breach Index. The downstream effect of more data breaches? A rise in ATO. With 59% of people reusing passwords on multiple sites, it’s easier than ever for criminals to leverage all of the data available on the dark web to cash out.
Latest trends in ATO
Like so many other types of fraud, ATO is increasingly committed at scale by bots, as well as manually. Hackers write scripts that test various combinations of stolen usernames plus potential passwords across multiple websites and apps, until they find a way in. These brute force attacks are helping fraudsters move as quickly as possible and focus on maximizing the value of each successful ATO. Researchers at Shape Security found that criminals can have as much as a 2% success rate by using these automated attacks.
Want to learn more about how to prevent ATO? Download our free ebook, The Complete Guide to Preventing ATO.