Account takeover (ATO) occurs when cybercriminals exploit stolen login credentials to gain unauthorized access to online accounts. ATOs can target people within organizations to steal sensitive information or customer accounts to enable fraudulent transactions. Given that ATO attacks have increased by 354% since 2023, having a strong prevention strategy is more crucial than ever to reduce risks for both customers and businesses.

What is an account takeover (ATO) attack?

ATO attacks can affect any organization with user-facing logins. Cybercriminals often steal credentials through phishing, social engineering, mass data breaches or purchases from the dark web. Once attackers seize user credentials, they deploy bots to test them across various sites. Valid combinations can then be sold or used to commit fraud.

ATOs are particularly dangerous because they can remain undetected for long periods. Without active identity verification defenses, these attacks look like valid sign-ins. Additionally, users might not notice unauthorized activities immediately, giving attackers plenty of time to exploit compromised accounts. Cybercriminals continuously improve their bots’ sophistication and develop new attack strategies, making ATOs increasingly challenging to detect.

Some ATO consequences

Account takeovers can have a variety of far-reaching repercussions.

Fraudulent transactions

Cybercriminals can use stolen accounts to make unauthorized purchases or exploit them for other illegal activities. For example, a compromised e-commerce account can be used to buy high-value items and ship them to an address where the hacker can claim them. These items are often resold in legal marketplaces.

Data theft

Access to an account can lead to the theft of personal information, which can then be sold or used for identity theft. Personal information like Social Security numbers, addresses and bank details are highly valuable since they can be used to open new credit accounts and file for fraudulent tax refunds. Many users also reuse login credentials, allowing hackers to carry out credential stuffing attacks and compromise more accounts.

Financial theft

Attackers might directly steal money from a user’s bank accounts or use linked credit cards for purchases. This can involve unauthorized wire transfers or maxing out credit limits. These funds can’t always be recovered, leading to significant financial losses and a lengthy process to restore the victim’s credit.

Internal phishing

Once inside an account, attackers can send phishing emails to contacts, posing as the account owner to spread the attack further. This can lead to widespread data breaches across an entire organization.

How do ATOs happen?

Understanding how account takeovers happen is the first step in preventing them. These are some of the most common techniques attackers use to steal credentials:

• Phishing: Cybercriminals trick users into revealing their login credentials by sending emails or messages that look legitimate. These often link to a spoofed login page that records the user’s password and username. Phishing attacks typically mimic trusted entities like banks or email providers, making it easy for users to mistake them as legitimate.
• Malware: Malicious software installed on a device can capture keystrokes and send this information to the attacker. Attackers filter these keystrokes to find login credentials. Malware can be delivered through email attachments or infected websites and downloads, operating silently in the background to steal information without the user’s knowledge.
• Man-in-the-middle attacks (MitM): Attackers intercept communication between a user and a website to capture sensitive information. MitM attacks are particularly effective on unsecured public Wi-Fi networks. Using encrypted connections and VPNs can help protect against these attacks.
• Credential stuffing: This involves using large lists of stolen credentials to access accounts. Credential stuffing attacks are carried out with bots, and even if a hacker finds only a small percentage of reused passwords in their dataset, they can achieve a succession of account takeovers.
• Brute force: This method involves systematically guessing passwords until the correct one is found. It’s most effective against accounts with weak passwords. Attackers use automated tools to test millions of password combinations quickly. Mitigation strategies include having strong, unique passwords and limiting the number of login attempts in a given time window.

Detecting account takeovers

Detecting an ATO early is crucial for minimizing its impact on an enterprise. Here are some key indicators and best practices for improving detection processes:

• Unusual activity: The first sign of a compromised account is unusual activity, such as fraud alerts or unapproved transactions. Regularly monitoring accounts and setting up alerts for suspicious activities are essential practices. Advanced analytics tools can help identify anomalies in transaction patterns, allowing security teams to detect and respond to potential takeovers quickly.
• Multiple failed login attempts: This is a significant warning sign that someone is attempting to breach systems through brute force or credential-stuffing attacks. If an IT department detects a spike in failed logins, it could indicate an ATO attempt. Implementing monitoring tools that track login attempts across an infrastructure and setting up alerts for repeated failures can enable security teams to act swiftly and prevent breaches.
• Logins from unfamiliar devices or locations: For instance, if a login attempt is made from a country where a company has no operations, it should trigger an immediate review. Employing two-factor authentication (2FA) and maintaining a detailed log of login histories ensures that only authorized users access accounts. This additional layer of security makes it significantly harder for attackers to gain access even if they have obtained valid credentials.
• Sudden changes to account settings: Changes such as updates to email addresses or passwords can indicate a potential takeover. Attackers often change contact information to prevent the legitimate account owner from receiving security alerts. For example, if a user’s contact details are altered without proper authorization, it should raise an alarm. Regularly auditing account changes and maintaining strict control over who can alter critical settings are vital. Implementing 2FA for these changes and setting up approval workflows for modifications to internal accounts can further protect against unauthorized access.

Some advanced ATO prevention strategies

Multi-factor authentication (MFA)

One of the most effective ATO prevention strategies. Implementing MFA adds an extra layer of security beyond passwords. This could involve something the user knows (like a password), something they have (like a token or mobile device), or something they are (biometric data). For example, a financial institution requiring both a password and a fingerprint scan significantly reduces the risk of unauthorized access, as attackers would need multiple forms of verification to succeed.

Account tracking systems

Essential for continuous monitoring of account activity, these systems can sandbox suspicious accounts for further investigation, preventing potential damage. For instance, if an e-commerce platform notices unusual purchasing patterns from an account, it can temporarily restrict access while conducting a deeper analysis. Real-time monitoring and anomaly detection tools can quickly identify and respond to potential threats, enhancing overall security.

AI-based detection systems

These systems are highly effective in identifying sophisticated ATO attempts and bot attacks. AI can analyze behavior patterns and flag anomalies that might indicate a security threat. For example, machine learning algorithms can detect unusual login times or locations and automatically initiate additional verification steps. These systems continuously improve by learning from new attack patterns and behaviors, providing an adaptive defense mechanism.

Web application firewalls (WAFs)

These offer a crucial layer of defense by filtering and monitoring HTTP traffic, blocking malicious traffic, and identifying credential stuffing or brute force attacks. For example, a WAF can inspect incoming traffic for known attack patterns and block suspicious requests before they reach an application. This helps prevent unauthorized access and protects sensitive data from being compromised.

Regular security audits

Vital for maintaining robust security measures. Conducting regular audits helps identify vulnerabilities in systems and processes, allowing security teams to address potential threats proactively. For instance, a comprehensive security audit should include penetration testing, vulnerability assessments and compliance checks. These audits can uncover weaknesses that attackers might exploit, enabling security teams to fortify defenses before a breach occurs.