Account Takeover vs. Identity Theft
Account takeover attacks and the potential of identity theft hang over online commerce. Trust and faith in your business, as well as the ability to protect your bottom line, are closely tied up with the ability to safeguard your audience against these crimes.
Learning about the nature and risk of account takeover attacks and identity theft is the first step to building suitable defenses — ones that provide protection without harming the customer experience. Having those countermeasures in place is essential to your efforts in establishing yourself as a trusted merchant or service provider.
Account takeover vs. identity theft: What’s the difference?
Account takeover incidents and identity theft are conceptually similar, with the former sometimes leading to the latter. They both involve a criminal using proprietary information to impersonate a legitimate account holder but differ in their degree of completeness and sophistication.
- An account takeover (ATO) involves a cybercriminal taking control of an online account— it can be a personal or a business account, though most incidents target consumers. Common methods allowing threat actors to take over accounts include phishing and using stolen passwords. The latter approach is common in an era of widespread data breaches, including login credentials.
- Identity theft is the impersonation of an individual beyond the loss of a single user account. Criminals possessing personal details from a victim may open new accounts in the affected person’s name or commit crimes by opening a bank account, applying for a loan, or taking out a credit card using the stolen credentials.
It’s a short process for account takeovers to turn into identity theft. Since consumers often reuse their passwords — 70% of account takeover victims report they didn’t use unique passwords for the compromised account — criminals who break into one user account can then move on and gain control of a wide variety of sensitive personal information.1
Today’s digital ecosystems are a perfect environment for ATO fraud and the resulting identity theft incidents. In 2024, only 19% of consumers received no data breach notifications regarding their personal information.2 On the other end of the scale, 7% of consumers saw six or more data breach notifications in the year, with the remaining 74% of people receiving between one and five.3
How do ATO fraud and identity theft affect customers and companies?
Consumer-targeting ATO fraud and identity theft are crimes that come with a number of consequences, both for the direct victims and the companies that serve them. Building sophisticated defenses is imperative because avoiding incidents of fraud whenever possible is far simpler than trying to repair the damage.
Consumer impact
When your customers suffer from an ATO incident — especially when they then become victims of identity theft — it can be the beginning of a long, expensive, stress-inducing ordeal. In the short term, an account takeover attack can lead to financial exploitation, with criminals gaining access to any saved rewards or gift card balances and potentially being able to make orders with credit card information.
Months and years after an identity is compromised, the effects can linger. As people struggle to regain control of their online profiles, they may suffer both personal mental health harm and practical difficulties. Among people who contacted the Identity Theft Resource Center for help in 2024, 82% were worried, 52% were sad, and 12% experienced thoughts of suicide.4 Three-tenths of these individuals struggled to prove their identity.5
Business impact
While companies won’t typically feel heavy consequences from a single compromised customer account, ATO fraud and identity theft can add up to take a toll on your business. In a direct sense, criminals can use compromised accounts to take advantage of rewards programs and steal value from your company — potentially one of the main reasons they resorted to ATO fraud in the first place.
Over the long term, fraudsters who have committed identity theft can use that stolen information to launch new account attacks, taking advantage of account creation promotions. The most harmful long-term consequences, however, may occur if cybercriminals frequently target your company’s accounts for takeovers. Your customers could lose trust in your ability to keep their data safe, rapidly losing loyalty. In the age of social media, there can also be a large PR fallout if many customers have their accounts taken over and post about this online. The ripple effect could be widespread and costly.
How do you build account protections for your organization?
In an era of frequent data breaches, where cybercriminals purchase login credentials, your company has a chance to stand out by defending customer accounts from ATO fraud and incidents related to identity theft. The ideal account protection approach will guard against a wide variety of compromise types while remaining easy for your team to use and convenient for your customers.
Breaking down the priorities for account protection methods into categories, your ideal solution will:
● Detect and shut down ATO fraud: By detecting when an account is not being used by its legitimate owner and locking the threat actor out, an account takeover fraud detection can prevent larger consequences for both the affected customer and your brand.
● Prevent new account fraud: Stopping attackers from creating illegitimate accounts with stolen personal information is an important anti-fraud measure, especially in industries such as e-gaming that frequently offer sign-up bonuses.
● Preserve the customer experience: One of the most common ways to protect accounts is to create more complex and involved login and identity verification procedures. However, these extra steps can be inconvenient and time-consuming for your customers, harming your brand’s appeal.
State-of-the-art machine learning solutions can meet all three of these objectives at once by using real-time analysis of a wide variety of data points, including login location, device type, and user behavior to spot an account takeover attempt or other type of fraud early in the process. These authentication methodologies, powered by machine learning, run in the background. This means they’re subtle and don’t damage the customer experience, making sure your services are still convenient to use while guarding against fraud.
Getting serious about account takeover protection
Your choice of technology platform can make all the difference in your efforts to keep customers’ accounts safe from ATO fraud and other types of compromise related to identity theft. While the right identity fraud prevention approach can deliver a combination of smooth customer experience and strong protection, a substandard approach can leave your customers — and your brand reputation — vulnerable.
Accertify is the ideal partner for account protection purposes, combining intelligent cutting-edge technology with human insights to detect suspicious activity quickly. It’s important to have such a sophisticated method in place to protect your users’ accounts due to the adaptability and ubiquity of fraudsters today.
Learn more about Accertify’s fraud protection platform and protect your audience against ATO fraud and identity theft.
[2] Identity Theft Resource Center, 2024
[3] Identity Theft Resource Center, 2024