Account Takeover Fraud (ATO Fraud)

Account Takeover Fraud (ATO Fraud): What It Is and How to Combat It

February 13, 2024

Key takeaways

1. ATO Fraud: Major threat, financial losses, identity theft.
2. Common methods: Phishing, malware, social engineering, brute force, MitM attacks.
3. Consequences: Financial losses, identity theft, reputational damage, legal issues, over $343B in losses by 2027.
4. Prevention: Human verification with NFC technology.
5. Didit: Decentralized digital identity, user control over data and privacy.

One-click purchases, information exchanges at unprecedented speeds, connections with anyone around the world... the internet has opened a world of possibilities for our lives. However, the internet is not a safe environment. Cybercrime, with bots, fraud, and identity theft, never rests and lurks even behind an innocent click on a seemingly legitimate link.

One of the most frequent and costly attacks today is Account Takeover Fraud (ATO Fraud), which mainly affects financial institutions, e-commerce, or digital service platforms. Through automated bots and other technologies, criminals are capable of stealing our identity and taking control of our accounts.

What are the consequences of this? Reputation crisis, economic losses, personal information theft, and even identity theft. In fact, data shows that, in the United States, 22% of adults have been victims of this fraud.

That's why tools like Didit, which seek to humanize the internet and make online interactions safer, are so necessary.

The Most Common ATO Fraud Methods

Fraud usually follows a series of crimes, typically starting with theft or poor handling of service credentials. Hackers can enter our account, take all the funds, sell the obtained information on the dark web, and use us to generate more fraud.

And, what are the main methods of attack?

Phishing: The Art of Digital Deception

Phishing involves sending fraudulent emails or messages that mimic trusted companies or institutions, aiming to obtain personal or financial information. A classic example is an email pretending to be from our bank, requesting our access keys under the pretext of "verifying an unusual transaction." The consequences of falling for this deception can be credential theft, unauthorized access to bank accounts, and personal information theft.

Malware: The Hidden Threat

Malware is introduced into devices via an infected link or deceptive attachment, installing malicious software without the user's knowledge. A common scenario is downloading a file that appears to be an important document but actually contains a program designed to steal passwords. Victims of this attack can suffer from credential theft and account access to remote control or hijacking of the infected device.

Social Engineering: Psychological Manipulation

This technique is based on psychological manipulation to make victims reveal personal information or perform actions that benefit the attacker. An example could be a phone call from someone pretending to be a computer technician requesting remote access to our computer to solve a nonexistent problem. Consequences include credential theft, unauthorized account access, and economic scams.

Brute Force Attacks: The Persistence of Software

Brute force attacks use specialized software to try millions of username and password combinations until the correct one is found and access to an account is achieved. This method is particularly effective against accounts that do not have truly secure passwords. Victims can face everything from unauthorized account access to financial and personal data theft.

Man in the Middle (MitM) Attacks: Covert Digital Espionage

MitM attacks are characterized by intercepting messages or data transactions between two legitimate parties. Attackers insert themselves into the communication using proxies, discreetly positioning themselves between the sender and receiver. This tactic allows them to "spy" on the information transfer, capturing login credentials and other personal information undetected. This type of attack stands out for its ability to violate the privacy of communications, resulting in the exposure of sensitive data that can be used to access bank accounts, emails, and other digital services.

What Are the Repercussions of Account Takeover Fraud?

The consequences of account takeover fraud can be quantified in many ways. From a quantitative perspective, losses related to digital fraud are expected to exceed $343 billion between 2023 and 2027, according to some reports. But this issue goes far beyond the merely monetary, affecting individuals, companies, and even the global economy.

Organizations that suffer an account attack can see their brand and reputation affected. Public perception of offering a weak security system can generate distrust among both potential and current users, as well as business loss and more than evident negative publicity, something that can take a long time to rebuild.

In addition to all of the above, organizations will also have to face legal consequences of falling for this fraud. Companies that do not protect consumer data can face significant fines and sanctions under laws such as the GDPR, the CCPA, and the PCI-DSS.

How Didit Protects You From ATO Fraud: Humanizing the Internet

At Didit, our mission is to humanize the internet and reduce online fraud. We believe the best way to protect people from ATO fraud is to confirm that there is a real person on the other side of the screen, not a bot or a cybercriminal.

How do we do it? Through a simple and quick human verification test that checks if the user is a human using NFC technology from official documents. This way, we can ensure that internet interactions are legitimate and genuine.

Didit goes beyond simple protection against ATO, as we redefine the way we interact on the internet. Therefore, we empower people with a decentralized digital identity that gives you total control over your data and privacy. With Didit, you are the owner of your identity and decide who has access to it.

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Click the button to create your Didit and improve the way we relate to each other on the internet.

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