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Account Takeover Fraud Exposed: How Did It Happen?

Expose the mechanics behind account takeover fraud (ATO fraud). Understand how it occurs and what techniques that used in it. Discover and prevent it now.
by Fazpass Indonesia
July 25, 2023
how does account takeover happen

How does account takeover happen? Account takeover fraud (ATO fraud) is a form of identity theft. It can occur through various methods, and the exact details of how it happens can vary depending on the specific circumstances. The most common method is done by exploiting security vulnerabilities. Attackers continuously adapt their account takeover methods to exploit new vulnerabilities and techniques to deceive users. Implementing robust security measures like multi-factor authentication, strong passwords, regular software updates, and user education can help mitigate the risk.

Real-Life Account Takeover Examples

Real-life examples of account takeover fraud serve as reminders of the risks individuals and organizations face. They emphasize the need for robust security practices, regular software updates, employee education, and proactive monitoring for suspicious activities. By learning from these incidents, individuals and organizations can better understand the risks associated with account takeover fraud. Thus, take appropriate measures to protect their accounts and sensitive information. Here is the answer to how does account takeover happen:

1. Phishing Attacks

One real-life example of a phishing attack is the "Google Docs" phishing scam that occurred in 2017. In this account takeover attacks, users received an email seemingly from a known contact, inviting them to view a shared Google Docs document. The email appeared legitimate and contained a link that led to a fake Google login page. When users clicked the link and entered their login credentials on the fake page, the attackers gained access to their accounts.

This attack exploited users' trust in the Google brand and their familiarity with Google Docs sharing functionality. Hence, the phishing email was widespread and affected numerous users who inadvertently provided their login information to the attackers. Google swiftly took action to address the issue and warned users about the attack. The incident highlighted the importance of remaining cautious. Additionally, verify the authenticity of emails and login pages, even when they appear to be from familiar sources.

2. Credential Stuffing

A real-life example of credential stuffing is the data breach that affected the online streaming service, Spotify, in 2020. In this attack, hackers utilized a large database of previously leaked account information like usernames and passwords to gain unauthorized access to Spotify user accounts.

The attackers employed automated scripts that systematically tested combinations of usernames and passwords to see if any matched Spotify accounts. As many users tend to reuse passwords across multiple platforms, the attackers successfully gained access to a large number of accounts. Once inside the compromised accounts, the attackers could exploit the users' personal information. Moreover, they alter account settings or engage in fraudulent activities such as selling access to premium accounts at discounted prices.

3. Social Engineering

Another example of how does account takeover happen is through social engineering. In July 2020, several high-profile Twitter accounts were compromised in a coordinated attack. The attackers gained access to verified accounts of prominent individuals and companies.

The attackers used a combination of social engineering and spear-phishing techniques to target Twitter employees and gain access to internal tools. Therefore allowed them to tweet fraudulent messages, requesting followers to send Bitcoin to a specified wallet address.

4. SIM Swapping

A real-life example of how does account takeover happen through SIM swapping occurred in 2018. A group of hackers targeted a cryptocurrency investor and gained unauthorized access to their online accounts. The attackers started by gathering personal information about the victim. Including their phone number and details about their cryptocurrency holdings. The hackers then contacted the victim's mobile service provider, posing as the victim, and convinced the customer support representative to transfer the victim's phone number to a SIM card in their possession.

With control over the victim's phone number, the attackers bypass two-factor authentication (2FA) and gain access to the victim's online accounts. Hence, using this unauthorized access, the attackers proceeded to transfer the victim's cryptocurrency holdings to their accounts. This incident resulted in significant financial loss for the victim. Therefore, highlighted the vulnerability of SIM cards as a means of authentication and the importance of securing personal information.

Techniques Used in Account Takeover Fraud and How to Prevent It

How to Prevent Account Takeover (ATO)

Account takeover fraud refers to the fraudulent act of gaining unauthorized access to someone else's online account to exploit it for personal gain or malicious activities. Therefore, it can have severe consequences for individuals and organizations. Detecting and mitigating account takeover risk often involves advanced fraud detection systems. Such as analyzing user behavior, device fingerprinting, and anomaly detection algorithms to identify suspicious activities. Then, take appropriate action to prevent account takeover fraud or ATO attack.

1. Credential Cracking

Credential cracking, also known as password cracking, is a technique used to uncover passwords by systematically guessing or decrypting them. Attackers employ various methods to crack passwords. To defend against credential cracking, individuals, and organizations should employ strong and unique passwords, implement password complexity policies, enforce multi-factor authentication (MFA), and regularly update passwords.

2. Session Hijacking

An attacker gains unauthorized access to an active session between a user and a web application or service. And then, they intercept and take control of the user's session. Thus, allowing them to impersonate the user and perform actions on their behalf. However, to mitigate session hijacking risks, users can protect themselves by using secure and up-to-date web browsers. As well as avoiding unsecured public Wi-Fi networks, and being cautious of suspicious links or downloads that could potentially lead to session hijacking.

3. Man-in-the-Browser (MITB) Attacks

Man-in-the-Browser (MITB) attacks are a type of cyber-attack where an attacker intercepts and manipulates communication between a user's web browser and a website to carry out malicious activities. This attack typically involves the installation of malware on the user's computer, which gives the attacker control over the browser. The target is online banking, e-commerce, or other websites that handle sensitive data.

However, MITB attacks are highly sophisticated and difficult to detect. They can bypass traditional security measures, such as secure sockets layer (SSL) encryption, as the malware operates within the user's browser. Therefore, to protect against MITB attacks, individuals and organizations should follow best practices.

4. Cross-Site Scripting (XSS)

This is a web application vulnerability where malicious scripts are injected into web pages viewed by users. These scripts are then executed by the user's browser, leading to various security risks. Therefore, to prevent XSS attacks, developers should implement proper input validation and output encoding to sanitize user input. Additionally, web application firewalls (WAFs) can also help detect and prevent XSS attacks by filtering and blocking malicious code.

5. Brute-Force Attacks

Brute-force attacks are a type of cyber-attack where attackers systematically attempt all possible combinations of characters to crack passwords or encryption keys. The objective is to guess the correct password or key through sheer trial and error. To protect against brute-force attacks, individuals and organizations should use strong and complex passwords that are resistant to dictionary-based attacks.

Moreover, use multi-factor authentication (MFA) to add an extra layer of security. With all the information given above, now you know how does account takeover happen. Enforcing robust security measures can mitigate the risks and avoid any kind of losses that might happen otherwise.

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