What Should You Know About Account Takeover Fraud?

by Tyler P. A Passionate Blogger - Entertainment

Since we live in a digital age, we are used to the world moving at lightning speed and having everything we need available online. This has made everything more convenient, quick, and easy, but it has also provided new opportunities for criminals.

Every business from retail stores to banks is shifting its operations online to maintain a competitive edge and meet customer demand. However, these organizations are finding that having an online presence can cause serious problems to them as well as their customers by exposing sensitive and proprietary data to cybercriminals. One of the biggest problems is account takeover fraud.

Account Takeover Fraud

Account takeover (ATO) fraud occurs when an unauthorized user accesses and uses another’s account for financial or personal gain. It normally involves the exploitation of online accounts such as eCommerce, social media, and online bank accounts. This means businesses need to implement an Account Takeover Fraud Prevention program.

Fraudsters and cyber criminals generally look for accounts from which they can steal money or gain other monetary benefits. Some examples of ATO fraud include:

Assuming control of a bank account and transfer funds to their own account.
Using another’s eCommerce account to purchase goods and services.
Taking control of a person’s social media account and asking for money transfers from friends and family members.

ATO fraud is increasing because the number of individuals who use the Internet for banking, fund transfers, and online shopping continues to increase. eCommerce platforms in particular have become profitable targets because of frictionless payment systems--instant purchase functionality where all billing data is stored in a user’s account. Fraudsters can easily divert purchases to their own address if they have the user’s login credentials because they can change customer account information and add new shipping addresses.

Impact of ATO Fraud

ATO fraud has been increasing for the past few years and businesses and customers have incurred significant losses. Apart from losing money, businesses are also forced to waste hours of time resolving account takeover fraud problems. This does not even consider lost revenue, damage to their reputation, or angry customers.

Preventing ATO Fraud

Businesses can prevent ATO frauds by using a chargeback fraud management solution so they can easily identify trusted users and protect customers’ accounts. This will enable them to provide customers with a frictionless experience while identifying account takeover fraud problems and account origination attacks.

ATO fraud will continue to grow because the “bad guys” will keep inventing new account takeover schemes. This means businesses need to take preventive measures to protect their reputation, prevent revenue loss, and retain customers.