The internet has revolutionized the way we live, work, and interact with each other. However, it has also created new opportunities for cybercriminals to steal our personal information and money. One of the most insidious types of cybercrime is account takeover fraud (ATO), which involves criminals gaining unauthorized access to your online accounts and using them for their own purposes, often causing financial harm.

ATO can happen to anyone, regardless of age, gender, or socioeconomic status. It can result in devastating consequences, including identity theft, financial losses, and reputational damage. In this article, we will explore what ATO is, how it works, and what you can do to protect yourself from becoming a victim.

Account Takeover Fraud (ATO)

What Is Account Takeover Fraud?

Account takeover fraud (ATO) is a form of online identity theft in which a criminal takes over an individual’s account, such as bank, credit card, or social media, with the aim of stealing money, personal information, or both.

ATO can affect bank accounts, email accounts, social media accounts, and online shopping accounts. If successful, attackers can then use your accounts to carry out fraudulent activities, such as making unauthorized purchases, transferring money to their own accounts, or stealing your personal information.

The Financial Impact of ATO

According to a report by Digital Trust & Safety Index by Sift, account takeover fraud increased 307% between 2019 and 2021. Additionally, an estimated 22% of adults in the U.S. have fallen victim to ATO, according to the Federal Trade Commission. Scammers are constantly developing more sophisticated methods and tools, leading to a rise in the incidences of ATO.

ATO can be particularly damaging because attackers often have access to sensitive data and financial information. In addition, victims of ATO may not be aware of the fraudulent activity until it’s too late, leading to significant financial losses and damage to their credit score.

How Does Account Takeover Fraud (ATO) Work?

ATO usually begins with obtaining the victim’s login credentials. This can be achieved through various methods, such as phishing, malware, social engineering, or gained from data breaches. Once the attacker has obtained the login credentials, they will log in and change the information, such as the email, phone number, or password, to prevent the victim from accessing their account. The attacker can then use the account to make purchases, transfer funds, or engage in other fraudulent activities.

Once cybercriminals have gained access to your account, they can carry out a range of fraudulent activities, including:

  • Make unauthorized purchases using your credit card or bank account
  • Transfer money from your account to their own
  • Change your account settings, such as your email address or password
  • Steal your personal information, such as your name, address, and Social Security number
  • Use your account to send spam or phishing emails to your contacts

Types of Account Takeover Fraud

There are several ways in which account takeover fraud can occur. Here are some of the most common types of account takeover fraud:

Credential Stuffing

Credential stuffing is a method of ATO that involves using a large number of username and password combinations obtained from the dark web or data breaches, to try and gain access to multiple accounts. Attackers use automated tools, taking advantage of users’ habits of reusing usernames and passwords, to try many different combinations until they gain access.

Password Spraying

Similar to credential stuffing, password spraying involves using a single password with multiple usernames. This method takes advantage of the tendency of users to use weak and easily guessable passwords.


Phishing is one of the most common methods of ATO. Attackers send fraudulent emails or text messages, often pretending to be legitimate institutions, requesting sensitive information such as login credentials or personal information. Unsuspecting victims are lured into clicking on links or downloading attachments that contain malware, allowing attackers to gain access to their accounts.


Malware is software designed to disrupt, damage, or gain unauthorized access to a victim’s computer or mobile device. A malware attack can result in the attacker gaining access to the victim’s login credentials and personal information.

Social Engineering

Social engineering is a tactic used by attackers to manipulate individuals into revealing sensitive information. It involves psychological manipulation and can be conducted through phone calls, social media, or in-person interactions. Attackers will often pose as a legitimate institution or authority figure and use fear or urgency to pressure the victim into disclosing sensitive information.

Brute-force Attacks

A brute-force attack is when a fraudster uses software to guess login credentials until they find the correct combination. This can be done through automated software or by manually entering different combinations of usernames and passwords.

SIM Swapping

SIM swapping is a tactic used by fraudsters to take over someone’s mobile phone account. They will convince the phone company to transfer the victim’s phone number to a new SIM card that they control. Once they have control of the victim’s phone number, they can use it to reset passwords and take over online accounts.

Warning Signs of Account Takeover Fraud

There are several warning signs that can indicate that your account may have been taken over by a fraudster. Here are some of the most common warning signs:

  1. Unusual Activity: If you notice unusual activity on your account, such as unauthorized transactions or changes to your account information, it may be a sign that someone else has taken over your account.
  2. Failed Login Attempts: If you receive notifications that someone has attempted to log in to your account unsuccessfully, it may be a sign that someone is trying to gain access to your account.
  3. Missing Statements: If you stop receiving statements or other communications from your financial institution, it may be a sign that a fraudster has changed your account information to prevent you from seeing unauthorized activity.
  4. Unexpected Notifications: If you receive notifications from your financial institution about changes to your account that you did not initiate, it may be a sign that someone else has taken over your account.
  5. Changes to Contact Information: If you notice changes to your contact information, such as your email address or phone number, it may be a sign that a fraudster is trying to prevent you from receiving notifications about unauthorized activity.

If you notice any of these warning signs, it is important to take action immediately. Contact your financial institution and report any unauthorized activity or changes to your account information. Change your login credentials and enable two-factor authentication to provide an extra layer of security for your account. By being vigilant and taking action quickly, you can protect yourself from account takeover fraud.

Why Account Takeover Fraud Succeeds

Account takeover fraud can be successful for a number of reasons. Here are some of the main factors that can contribute to the success of account takeover fraud:

Stolen Login Credentials

One of the main ways that fraudsters take over accounts is by stealing login credentials. This can be done through phishing scams, social engineering tactics, or by purchasing stolen credentials on the dark web. If a fraudster is able to obtain valid login credentials for an account, they can take over the account and conduct fraudulent activity.

Lack of Multi-factor Authentication

Multi-factor authentication (MFA) is a security measure that requires users to provide a second form of identification in addition to their password. This can include a fingerprint scan, a code sent to their phone, or another form of authentication. If an account does not have MFA enabled, it is easier for a fraudster to take over the account using stolen login credentials.

Weak Passwords

If a user chooses a weak password, it is easier for a fraudster to guess or crack the password and gain access to the account. Many people still use simple passwords such as “password” or “123456,” which are easy for fraudsters to guess.

Lack of Monitoring

If an account holder does not monitor their account regularly, they may not notice when fraudulent activity occurs. This can allow a fraudster to continue conducting fraudulent activity on the account for an extended period of time.

Social Engineering Tactics

Fraudsters often use social engineering tactics to gain access to account information or login credentials. This can include posing as a customer service representative or other trusted individual in order to trick the account holder into providing sensitive information.

What to Do if You Fall Victim to Account Takeover Fraud

If you have fallen victim to account takeover fraud, it is important to take action immediately to minimize the damage and prevent further fraud. Here are the steps you should take:

Contact Your Account Provider

The first step is to contact your account provider, whether it’s a financial institution or email host or some other account provider, and report the fraudulent activity. They can freeze your account and launch an investigation into the fraudulent activity.

Change Your Password

If you have not already done so, change your password immediately. Choose a strong password that is unique to this account and enable two-factor authentication if available.

Check Your Credit Report

Check your credit report for any unauthorized accounts or activity. You can request a free credit report from each of the three major credit bureaus once per year.

Monitor Your Accounts

Keep a close eye on all of your accounts for any signs of further fraudulent activity. Report any suspicious activity to your financial institution immediately.

File a Police Report

If you believe that your personal information has been compromised as part of the account takeover fraud, you should file a police report. This can help you to dispute any fraudulent charges or accounts that were opened in your name.

Consider Identity Theft Protection

Consider signing up for an identity theft protection service that can monitor your credit reports and alert you to any suspicious activity.

Educate Yourself

Take the time to educate yourself about how account takeover fraud happens and what you can do to prevent it in the future.

By taking these steps, you can minimize the damage caused by account takeover fraud and take steps to prevent it from happening again in the future.

Federal and State Laws Targeted at Account Takeover Fraud

Account takeover fraud is a serious issue that affects many individuals and businesses. To combat this type of fraud, both federal and state laws have been enacted to protect consumers and hold perpetrators accountable. Here are some examples of federal and state laws that target account takeover fraud.

Federal Laws

The Electronic Fund Transfer Act (EFTA) and Regulation E: These laws require financial institutions to provide protection to consumers against unauthorized electronic fund transfers. They also mandate that financial institutions investigate and resolve any reported unauthorized transactions.

The Gramm-Leach-Bliley Act (GLBA): This law requires financial institutions to have appropriate security measures in place to protect the non-public personal information of their customers, including login credentials. Financial institutions are also required to notify customers if there is a breach of their personal information.

The Fair Credit Reporting Act (FCRA): This law gives consumers the right to dispute inaccurate or fraudulent information on their credit reports, which can help prevent account takeover fraud.

The Computer Fraud and Abuse Act (CFAA): This law makes it illegal to gain unauthorized access to a computer or computer system, including someone else’s online account. Violators of the CFAA can face both civil and criminal penalties.

The Identity Theft and Assumption Deterrence Act (ITADA): This law makes it a federal crime to knowingly transfer or use someone else’s identity without lawful authority, which includes taking over someone else’s online account.

State Laws

Data Breach Notification Laws: Many states have laws that require businesses to notify consumers if their personal information has been compromised in a data breach. This can help consumers take steps to protect themselves from account takeover fraud.

Consumer Protection Laws: Some states have consumer data protection laws that prohibit deceptive business practices, including fraudulent account takeovers.

Uniform Commercial Code (UCC): The UCC is a set of laws that govern commercial transactions, including electronic fund transfers. Many states have adopted the UCC, which includes provisions that protect consumers against unauthorized transfers from their accounts.

These laws provide important protections for consumers against account takeover fraud and hold financial institutions and fraudsters accountable for their actions.

Prevent Account Takeover Fraud With Kiteworks

The Kiteworks Private Content Network helps organizations mitigate the risk of account takeover fraud in a number of ways.

  • Multi-factor Authentication: Kiteworks offers multi-factor authentication (MFA) as a security measure. This helps to prevent fraudsters from taking over user accounts even if they have obtained login credentials.
  • Granular Permissions: Kiteworks allows administrators to set granular permissions for users, ensuring that only authorized individuals have access to sensitive content. This can help to prevent unauthorized access and reduce the risk of account takeover fraud.
  • Activity Monitoring: Kiteworks offers detailed activity monitoring, allowing administrators to track user activity and detect any suspicious activity. This can help to identify potential account takeover fraud before it becomes a problem.
  • Integration With Security Tools: Kiteworks can integrate with a variety of security tools, including data loss prevention (DLP), to provide an additional layer of security.
  • Secure Collaboration: Kiteworks offers a secure platform for collaboration and file sharing, reducing the need for users to share sensitive information via email or other insecure methods.

To learn more about how Kiteworks can help you protect your customers from account takeover fraud, schedule a custom demo.


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