What is an account takeover?

An account takeover (ATO) is a form of identity theft that occurs when a malicious actor gains unauthorized access to a user's account by acquiring login credentials, such as usernames and passwords, through various tactics. Once logged-in, they can change details, make purchases, view private data, and transfer funds without the account owner's knowledge.

Top 10 common methods used in account takeover attacks

Attackers are continually developing new techniques to breach customer accounts. Understanding these methods helps you sniff out suspicious activity and strengthen protections for your business and users. Here are some of the most commonly seen tactics used in account takeovers:

• Credential stuffing: Reusing stolen usernames and passwords from one site on other platforms exploits the common habit of users recycling credentials. When login details from one site are leaked in a breach, criminals bulk-test these on other sites, hoping to find matches and gain unauthorized access.

• Phishing attacks: Through convincingly crafted emails, texts, calls, or fake websites, often created using generative AIs, fraudsters pose as legitimate services to trick recipients into revealing sensitive information or downloading malware. These deceptive messages often create urgency around verifying account details, leading users to unknowingly hand over their credentials.

• Social engineering: Cybercriminals use psychological tactics to manipulate targets into revealing confidential information, such as passwords or answers to security questions. They may also impersonate the account holder when contacting support teams, requesting unauthorized access or account changes.

• Malware and keyloggers: By installing malicious software on a user's device, these intruders silently capture keystrokes and screenshots, allowing attackers to collect login credentials and gain account access without alerting the user. 

• Brute-force attacks: Automated software systematically guesses passwords, running through common words, random combinations, or dictionary terms until it finds a match and gains entry to the account. 

• Man-in-the-middle attacks: Intercepting communications between users and trusted services, these attacks capture or manipulate data in real-time, often stealing login details or other sensitive information as it's transmitted.

• SIM swapping: By convincing a mobile provider to transfer a victim's phone number to a new SIM card, bad actors can bypass two-factor authentication to access accounts associated with that number and  gain control.

• Password spraying: Instead of targeting one account with multiple password guesses, this method involves trying a small set of commonly used passwords across many accounts. This approach helps avoid detection, as it gets around account lockouts triggered by multiple failed attempts.

• Exploiting password reset mechanisms: Publicly available information, such as names and email addresses, can be used to exploit weak password recovery processes. By initiating password resets and intercepting verification codes, they gain access to accounts.

• Insider threats: Trusted individuals, including employees, contractors, or former staff, misuse their access privileges to compromise accounts. This internal risk can expose both the organization and its customers to security breaches. 

Consequences of account takeover

Account takeover (ATO) attacks pose a severe and growing threat to both organizations and individuals. When cybercriminals gain unauthorized access to user accounts—whether through credential stuffing, phishing, or other methods—the damage extends far beyond immediate financial losses. The ripple effects can compromise personal privacy, business operations, regulatory compliance, and long-term customer relationships. Understanding these wide-ranging consequences is crucial for implementing robust security measures and response protocols. Here's a detailed look at the potential impacts of ATOs:

• Financial losses: Unauthorized transactions, stolen funds, or leaked payment details can lead to significant losses. Recovering accounts and addressing fraudulent charges can be time-consuming and costly.

• Identity theft: Stolen personal details—like contact information, birthdates, or social security numbers—can be misused for further crimes, such as opening new accounts or taking out loans under a false identity.

• Reputational damage: Breaches can shake customer confidence in your data security practices. Individuals may also face reputational harm if attackers impersonate them or leak private information.

• Data breaches: Privacy and compliance risks multiply when unauthorized users access sensitive health, financial, or personal records,. Investigating and responding to breaches also drains considerable amounts of time and resources.

• Legal and compliance liabilities: Unauthorized data exposure from hacked accounts risks penalties and lawsuits for non-compliance with regulations like GDPR or CCPA that mandate privacy safeguards.

• Loss of intellectual property: Stolen proprietary information, trade secrets, source code, or research can weaken your competitive edge if leaked or stolen.

• Operational disruption: Infiltrated systems need immediate attention to isolate threats and restore functionality. Downtime during this process disrupts productivity and hampers business operations.

• Customer trust erosion: Account takeover fraud undermines your clients' confidence that their credentials and personal details remain private, jeopardizing loyalty and future business.

9 prevention strategies for account takeover

Preventing account takeovers means staying one step ahead using a combination of proactive measures and smart security defenses. By combining strong policies, modern technology, and informed users, you can create a solid barrier against unauthorized access. Here are nine essential strategies to keep accounts secure and give your users peace of mind:

Implement strict password policies

Require passwords to be at least 12 characters, including uppercase, lowercase, numbers, and symbols. Enforce periodic changes, such as every 90 days. Consider banning common or breached passwords. Educate customers on generating unique, hard-to-guess credentials each time. 

Enable multifactor authentication (MFA)

Offer authentication options like one-time codes via text/email or authenticator apps. Encourage all customers to enable MFA for sensitive accounts by making the setup process quick and easy, so it's widely adopted. Newer options like passkeys provide an even better experience. Check out this live stream on Fastly to learn about using passkeys.

Regular security audits

Schedule routine internal and third-party security reviews. Assess policies, systems, and defenses for vulnerabilities. Ensure compliance with privacy regulations, too. Act promptly on all findings, no matter how small. 

Employee training

Educate staff to identify and report phishing, avoid risky clicks, and keep sensitive data safe. You could also simulate social engineering to increase awareness. 

Monitor for suspicious activities

Watch login locations, devices, login times, leaked passwords, and account changes. Be on alert for anomalies. Respond quickly if something looks off by contacting customers and locking accounts.

Secure password recovery processes

Enhance identity verification for password resets, requiring details that only the legitimate user would know. Offer secure reset options like authenticator apps or security keys to maintain a smooth yet safe experience. 

Limit account permissions

Grant employees only the access privileges necessary for job roles. Review permissions regularly. Tight controls minimize the impact if any credentials are compromised. They also discourage misuse and reinforce accountability. 

Implement account lockout policies

Set temporary locks after multiple failed login attempts, with alerts to guide users on regaining access. This strategy, along with implementing a rate limit, helps prevent brute-force attacks while balancing usability for legitimate users. 

Keep software updated

Outdated systems and unpatched vulnerabilities are prime targets. Schedule automatic updates where possible. 

Use Fastly to protect against account takeover

When account takeover attacks occur, the impacts can seriously harm individuals, organizations, and customers' well-being financially and emotionally or cause long-lasting damage to their reputations and privacy. With the help of AI, ever-more complex threats are constantly emerging, and proactive security measures are needed now more than ever.

Fastly offers comprehensive solutions specifically designed for this purpose. Our dedicated services help shield accounts from the sophisticated techniques malicious actors rely on. You gain always-on monitoring and response capabilities to safeguard the entire login process. The following features and benefits allow you to focus on your core responsibilities with confidence, knowing that sensitive data and online identities remain well-protected:

• Bot detection and mitigation: Fastly's algorithms spot anomalous traffic patterns to identify and automatically block malicious bot activity attempting to take over accounts through brute force or credential stuffing.

• Advanced rate limiting: The solution's granular controls prevent account abuse by enforcing login attempt thresholds per endpoint.

• Web Application Firewall (WAF): Fastly's Next-Gen WAF uses customizable rules to detect and block unusual or malicious requests that could lead to unauthorized access. 

• Real-time threat intelligence: The platform incorporates global data on emerging threats to recognize and swiftly cut off new attacks. You gain awareness of stealthy tactics before widespread damage occurs.

• Behavioral analysis: The solution monitors account usage to identify irregular behavior indicating a possible compromise. 

• API protection: Fastly secures application programming interfaces involved in authentication and account management and helps shield the backend from exploits.

• Edge computing capabilities: Fastly's edge network architecture enables instant reaction to potential account takeover attempts by processing data close to end users.

• Comprehensive logging and analytics: The platform provides real-time visibility into security-relevant account activity, helping strengthen defenses and reduce future risks.

Learn how Fastly's comprehensive security solutions could benefit your organization's account takeover protection goals.