How To Prevent Account Takeover Fraud and Identity Theft Targeting Your Customers
What makes account takeover prevention so challenging and why are account takeovers often more difficult for organizations to spot and mitigate compared to other types of fraud, such as payment fraud?
The answer is nuanced and cannot be simplified to a single factor. Account takeover fraud often leaves a longstanding negative impact and quickly erodes the trust that has developed between your company and customers, with Account takeovers negatively impacting your company’s bottom line, diminishing loyalty, and even resulting in lost customers.
Why Does Account Takeover Protection Matter So Much?
What is account takeover? In short, this is when a fraudster gains control of a customer’s online account through means such as a phishing attack or credential stuffing attack, or by purchasing stolen account credentials on the dark web.
Account takeovers are often a prelude to a wider crime. The compromised credentials can be used to make unauthorized transactions within the cover of respectability that comes from authentic customer accounts. In industries such as iGaming or travel, where customer accounts may hold credits or reward points, fraudsters can use this information.
As a business owner, never underestimate the potential of these crimes to damage customer trust in your company. Even if you can quickly reimburse customers for lost currency or reverse unauthorized transactions, losing an account can make the consumer feel unsafe. This is doubly so if it becomes clear that sufficient account fraud prevention measures weren’t in place.
With so many external factors beyond your organization’s control, it can be challenging to know where to start when it comes to account takeover prevention. Understanding what account attacks are and recognizing five key risk factors can help you prevent account takeover fraud in your own business.
5 Account Takeover Issues To Know
Understanding how an account takeover attempt turns into fraud or identity theft provides a valuable perspective. By grasping each step of the process, from ways criminals access login information to how they use stolen credentials to commit further crimes, you can become better prepared to combat these offenses.
1. Compromised Passwords Are Widely Available
Over 19 billion username and password combinations were leaked over 12 months, starting in April 2024.[1] Analysis of the leaked credentials revealed that only 6% of the affected accounts used unique passwords. This raises the threat that a breach at one organization can leave customers who reuse passwords vulnerable across several organizations.
Compromised lists of credentials are often readily available on the dark web at a low cost. Using free, automated software, fraudsters can churn through hundreds of credentials per second and quickly determine which are valid and can be monetized. At that point, they may attempt to further resell these “validated” credentials or exploit them to make unauthorized purchases, withdraw funds, steal loyalty points, or commit other malicious attacks against the account.
2. Attackers Hide Online
In the current e-commerce-dominated market, online credential protection is more important than ever. E-commerce traffic has risen sharply as more consumers are transacting online for goods and services previously bought in person. In fact, 2025 is projected to be the first-year e-commerce passes 20% of all retail activity, accounting for $6.41 trillion in retail activity worldwide.[2]
Fraudsters use this high volume as a cover for their activities. By performing some simple research on an account and the associated organization, fraudsters can employ tactics such as utilizing a proxy or virtual private network to mimic the legitimate user’s geographic location and conduct attacks during the organization’s peak activity — both actions making it more difficult to detect.
3. Account takeover Protection Shouldn’t Compromise User Experience
User experience (UX) should be a priority, whatever your industry. UX entails making every aspect of a customer’s interaction with your organization a pleasant one — creating an account, browsing and purchasing, facilitating a return, or engaging with customer service.
Introducing unwanted friction into the process, including picking out certain images to verify a user is not a robot or repeatedly prompting customers to answer security challenge questions for authentication, may result in customer abandonment and frustration. This means your account takeover protection solutions should ideally work behind the scenes, using passive user behavior signals, location, and device intelligence, and more to detect potentially fraudulent activity.
4. Account Takeovers Work By Dispelling Suspicion
With unauthorized access to an existing account, an account takeover instantly benefits from the customer’s credibility and goodwill — their purchase history, loyalty status, and tenure as a customer. A fraudster could make similar purchases, update profile information on the account like email, phone numbers, or delivery addresses without rousing much suspicion.
The user behavior signals and device intelligence that prevent your customers from feeling too much friction in their interactions with your business can also help you stop this kind of activity. Even a fraudster whose behavior superficially resembles the real customer’s may fail some authentication tests regarding location, device type, active hours, and more.
5. Takeover Prevention is a Cross-Team Effort
Account takeover prevention can span across many different teams, such as security, fraud prevention, e-commerce, and customer experience, requiring constant coordination rather than independent silos. Even when threats are recognized, the changes may be slowly implemented in the absence of a unified platform.
We know fraudsters are tapping into their network to share information and best practices, so security professionals and internal IT personnel must do the same and determine ownership to take charge of fraud prevention.
Technology To Prevent Account Takeover Fraud
Account takeover fraud is complex and difficult to unravel, as evidenced by these nuances. While many organizations may utilize a number of solutions to help prevent these attacks, juggling multiple vendors can present a fragmented risk picture and introduce unwelcome friction for your customers.
Accertify can help. The verification functionality within our Account Protection solution is built on five pillars of information: Device, Connection, Location, Behavior, and History. By looking at these five points, we can help answer the following key questions:
- What is the user’s device?
- How is the user connecting to your site?
- What is the user’s location?
- How is the user interacting with your site?
- What is the user’s history?
Our Account Protection solution analyzes billions of data points using machine learning, advanced behavioral analytics, and device intelligence technology, empowering organizations to verify trusted customers from fraudsters. The system can apply the exact right amount of friction to account management, preventing the use of compromised account information while providing a positive UX.
Build Your Defenses Against Account Takeover Fraud
Do your customers trust you to take care of their account information? This is a complex question, but you can play an active role in making sure your reputation stays strong. A compromised account can quickly lead to longer-term consequences, but every security measure you implement against account takeover fraud can help. Accertify’s tech-enabled, human-guided solutions provide the ideal balance.
Request a consultation and discover how your account takeover prevention efforts can move at the speed of right.