Account Takeover (ATO): The Hidden Threat to Online Trust

Key Takeaways:

• Account takeovers happen when attackers gain unauthorized access to someone’s account using stolen credentials, phishing, or weaknesses in recovery systems. Once inside, they can quietly steal money, data, or identity information before anyone notices.
• These attacks keep rising because criminals now have easier access to stolen data and automated tools that let them target many accounts at once. Even basic defenses like SMS codes or static MFA can be bypassed through SIM-swaps or push-fatigue tactics.
• Modern protection requires continuous, adaptive security that evaluates behavior, device signals, and risk throughout a user’s session. Tools like passkeys, behavioral biometrics, and real-time threat intelligence help stop intrusions before they cause damage.

 

Account takeovers have become a major source of online fraud, affecting individuals and businesses across many digital services. Criminals no longer need to break into systems directly. They focus instead on gaining access to real accounts and using them for their own purposes. These incidents often remain unnoticed until financial or personal harm has already occurred.

Large amounts of compromised user information now circulate on criminal marketplaces, which makes it easier for attackers to begin these intrusions. Services that rely heavily on passwords or basic recovery steps are especially at risk because criminals can use this information to reach accounts that appear valid at first glance.

Research from Javelin Strategy & Research shows that losses from account takeover incidents reached 15.6 billion dollars in 2024, a significant increase since 2022. That growth has made it important to look closely at how these attacks work and what can be done to stop them.

This article breaks down the tactics behind account takeovers, why they are becoming more common, and the tools that can help reduce the risk.

What Are Account Takeovers?

An account takeover, or ATO, occurs when a criminal gains control of a user’s account and uses it for personal or financial gain. Once access is obtained, the attacker can change passwords, lock out the rightful owner, or use the account to make purchases and move money.

Unlike large-scale data breaches that target company networks, account takeovers focus on individual access points. Attackers use stolen credentials, weak logins, or social engineering tactics to pass identity checks and appear as legitimate users. The activity often blends in with legitimate use, allowing many attacks to continue unnoticed.

The real danger lies in how seamlessly these intrusions blend in. A compromised account may look entirely genuine while being used to move funds or access linked services. By the time the behavior is flagged as unusual, the attacker has often expanded access to other connected accounts. As digital accounts become more central to everyday life, protecting them now requires ongoing verification methods that ensure the right person remains in control at all times.

How Account Takeover Fraud Happens

Understanding how account takeovers occur helps explain why they remain one of the most damaging forms of digital fraud. Each attack follows a series of steps that often begin long before the actual breach. What starts with stolen data or social engineering can quickly lead to full control of a trusted account.

The following cycle outlines how an account takeover typically unfolds:

1. Credential Acquisition

The first stage involves gathering the credentials required to access an account. Attackers collect usernames, passwords, and session tokens through phishing campaigns, malware, and large-scale data leaks, then trade them on criminal marketplaces. Recent reporting by Proton found more than 300 million stolen credentials active on the dark web, highlighting the scale of ready-to-use logins available to attackers.

2. Testing and Validation

Once credentials are collected, attackers test which ones are still active. This tactic, known as credential stuffing, relies on automated tools to try stolen login data across multiple platforms. Because many users reuse passwords, one exposed credential can unlock several accounts belonging to the same person. Akamai’s 2024 Securing Apps research reported roughly 26 billion credential-stuffing attempts each month, showing how automation and large credential lists allow attackers to scale these tests across many sites.

3. Recovery-Based Account Access

Attackers also target account recovery systems to bypass normal login checks. One of the most common tactics is SIM-swap fraud, where a criminal convinces a mobile carrier to transfer a victim’s phone number to a new SIM card. Once the number is reassigned, the attacker can intercept SMS verification codes, reset passwords, and take full control of accounts that rely on phone-based authentication. Because many services still use SMS for identity recovery, SIM swaps remain one of the most effective ways to seize an account without ever knowing the original password.

4. Account Access and Persistence

After gaining entry, attackers work to keep their access. They may hijack browser cookies, exploit weak multi-factor authentication flows, or launch MFA fatigue attacks that pressure users into approving repeated login requests. During this stage, the attacker’s actions often mirror normal account behavior, allowing them to stay active for long periods without drawing attention.

5. Monetization and Expansion

The final stage turns stolen access into financial or strategic gain. Attackers may transfer money, redeem stored balances, or sell verified accounts to other criminals. In more sophisticated cases, compromised credentials are used to infiltrate wider networks or deploy ransomware. Stolen identity data can also be repurposed to build synthetic identities, which are later used for large-scale financial fraud and money laundering schemes.

Why Account Takeovers Attacks Keep Rising

Account takeovers are increasing not only because of technical weaknesses but also because of the growing availability of tools, data, and services that make these attacks easy to execute. The combination of human error, automation, and underground marketplaces has turned account compromise into a profitable industry that continues to expand each year.

Several factors are driving this growth:

1. Password Reuse and Weak Credentials

Many people still rely on the same passwords across multiple accounts. When one service is breached, those credentials often unlock other platforms. Attackers exploit this behavior by testing stolen logins at scale, where even a small success rate can lead to thousands of compromised accounts.

2. Automation and Attack Infrastructure

Tools that once required technical skill are now sold as off-the-shelf kits. Attackers use bots, residential proxies, and CAPTCHA-solving services to automate large-scale login attempts and evade detection. A single operator can launch millions of tests in minutes, overwhelming defenses that rely on static authentication.

3. Multi-Factor Authentication Fatigue

Multi-factor authentication remains a strong defense, but attackers increasingly rely on social engineering and push fatigue tactics to bypass it. Repeated login requests can wear down users until one is approved. Incidents such as the 2023 Uber breach showed how persistent manipulation can defeat even well-configured MFA systems.

4. Dark Web Marketplace

Criminal marketplaces have lowered the barrier to entry for ATO campaigns. Stolen credentials, browser cookies, and verified accounts are sold cheaply, allowing less experienced actors to participate. Some even purchase ATO-as-a-Service packages that include ready-made tools and tutorials for launching profitable attacks.

5. Exploiting Trust Signals

Fraud detection systems often rely on device fingerprints, cookies, and login histories to verify legitimacy. Attackers have learned to mimic these signals to appear as returning users. By manipulating session data, they can bypass basic risk checks and maintain access for extended periods without triggering alarms.

The Cost and Consequences of Account Takeovers

As account takeovers rise, their effects are spreading across every part of the digital economy. What starts as a single compromised account often turns into a costly, time-consuming problem for both individuals and organizations. The damage extends far beyond the initial intrusion, reaching financial systems, personal data, and public confidence. As discussed in our analysis of the cost of identity fraud to businesses, account takeovers represent one of the most expensive forms of digital crime, often leading to cascading losses across entire organizations. Below is a closer look at the broader consequences:

1. Financial Losses

The most immediate outcome of an account takeover is financial loss. Attackers can empty balances, request fraudulent refunds, or reroute payments before anyone notices. The damage often extends beyond the initial theft, as victims face additional costs related to recovery, legal action, and communication efforts. For individuals, the impact can be just as severe when stolen funds or digital assets cannot be recovered.

2. Reputation and Customer Trust

Every successful takeover weakens confidence in online services. When users lose faith in a platform’s ability to protect accounts, rebuilding that trust can take months or even years. Publicly reported breaches discourage people from sharing information or completing transactions online. Visible security improvements and clear communication during recovery have become essential to restoring confidence.

3. Operational and Legal Costs

These attacks also create significant operational strain. Support teams must verify identities, restore access, and resolve disputes, diverting time and resources from routine work. In regulated sectors, account takeovers can trigger compliance reviews or penalties under laws such as the General Data Protection Regulation (GDPR) or the California Privacy Rights Act (CPRA).

4. Wider Systemic Risks

The impact rarely ends with one account. Stolen credentials can provide entry into connected platforms or be sold to other criminal groups. Attackers often use compromised identities for broader crimes such as identity theft, money laundering, or the creation of synthetic identities. Each compromised account becomes a stepping stone to larger, coordinated fraud.

Modern Defenses Against Account Takeovers

The growing scale of account takeovers has pushed organizations and technology providers to rethink how they protect users. Preventing these attacks now depends on a combination of smarter authentication, stronger visibility, and adaptive security that responds to changing behavior. Traditional logins and password resets are no longer enough. Protection must continue after access is granted through ongoing verification that confirms a user’s authenticity throughout their activity.

Several approaches have proven effective in reducing account takeover risks:

1. Stronger Credential Protection

Reducing reliance on passwords remains a critical defense against account takeovers. Encouraging users to adopt password managers and stronger authentication methods helps limit exposure from reused or weak credentials. Eliminating shared secrets that can be stolen or guessed reduces the value of stolen credential lists and limits the effectiveness of common attack methods.

2. Adaptive Multi-Factor Authentication

Multi-factor authentication (MFA) remains one of the most reliable safeguards, but it works best when it adapts to context. Adaptive MFA evaluates factors such as device, location, and login time to determine whether a request is typical. If something appears unusual, the system can request additional proof before granting access. This approach helps counter MFA fatigue tactics that rely on repeated login prompts to trick users into approving fraudulent access.

3. Device and Network Intelligence

Monitoring the devices and networks used to access accounts adds another layer of protection. Systems that track IP reputation, detect impossible travel patterns, or recognize unfamiliar device signatures can block unauthorized logins before they occur. Many fraud prevention platforms now integrate these checks automatically and flag high-risk activity in real time.

4. Session and Token Security

Session cookies and access tokens can be stolen and reused to bypass login requirements. Protecting these assets through token binding, shorter session lifetimes, and periodic token rotation limits how long an attacker can stay active after gaining access. The 2023 Okta incident illustrated how exposed tokens can provide deep entry without ever revealing a password.

5. Threat Intelligence and Dark Web Monitoring

Proactive monitoring of leaked credentials and emerging threats helps identify risks before they are exploited. By scanning dark web sources and breach databases, security teams can detect exposed credentials tied to their users and prompt resets or alerts. This early visibility makes it harder for attackers to act on stolen data before it is discovered.

6. Behavioral Biometrics

Behavioral biometrics are emerging as a valuable layer in continuous verification. By analyzing how users interact with their devices—such as typing rhythm, mouse movement, or screen navigation—systems can detect subtle deviations that signal account misuse during an active session. This approach adds a silent layer of defense that helps confirm the real user remains in control without adding friction to the experience.

Emerging Technologies Shaping the Future of Account Takeover Prevention

As attackers evolve, new technologies are transforming how organizations prevent and detect account takeovers. Advances in identity verification, authentication, and fraud analytics are reshaping how digital trust is managed and helping contain intrusions that bypass traditional defenses.

1. Passkeys and Decentralized Identity

Passwordless authentication is becoming the new standard. Passkeys, built on the FIDO2 and WebAuthn protocols, replace passwords with cryptographic key pairs stored on a user’s device. The private key stays local, while the public key is registered with the service. Because there are no shared secrets to intercept, attackers cannot steal or reuse credentials through phishing or credential stuffing.

Major providers including Apple, Google, and Microsoft now support passkeys, enabling secure login through biometrics or device PINs tied to hardware-backed storage.

Decentralized identity expands on this protection by giving users control of their verified credentials. Instead of storing identity data in centralized databases, users hold verifiable credentials in digital wallets and present cryptographic proofs only when required. This eliminates single points of failure and reduces the risk of mass credential theft or account recovery abuse.

2. Artificial Intelligence in Fraud Detection

Artificial intelligence and machine learning have become central to real-time ATO detection. Instead of relying on static rules, AI-driven systems continuously analyze behavioral, transactional, and device-level data to spot subtle anomalies that may indicate a compromise.

For example, an AI engine can correlate login timing, geolocation, mouse movement, typing cadence, and transaction patterns to distinguish a legitimate user from a hijacked session.If deviations occur—like a familiar device suddenly accessing unusual features or transferring funds to a new beneficiary—the system can automatically trigger additional verification, session termination, or fraud investigation.

3. Zero Trust and Continuous Authentication

The Zero Trust model, outlined in NIST SP 800-207, assumes that no user or device is inherently safe. Every access request must be verified dynamically, based on real-time context rather than static credentials.

Continuous authentication applies this principle during an active session. It evaluates ongoing signals—device posture, network behavior, and user activity—to confirm that the person who logged in is still the one using the account. If a session shifts to an unfamiliar device or network, the system can re-challenge the user or limit access.

4. Collaborative Fraud Intelligence

Many account takeover campaigns target multiple organizations at once, often using the same stolen credentials or automated tools. Collaborative fraud intelligence allows institutions to share verified indicators of compromise and detect these coordinated patterns earlier.

Networks such as the Financial Services Information Sharing and Analysis Center (FS-ISAC) and the Merchant Risk Council (MRC) facilitate this exchange of threat data and device fingerprints. In Europe, initiatives like the EU Digital Identity Wallet aim to enable the secure sharing of verified identity attestations under privacy frameworks such as GDPR.

By sharing verified threat intelligence, organizations can identify fraudulent activity sooner, block repeat offenders, and strengthen protection across the digital ecosystem.

The Future of Account Takeover Prevention

Account takeovers will remain one of the toughest challenges in digital security. Attackers continue to evolve, finding new ways to exploit credentials and manipulate trust systems that have not kept pace. The response, however, is evolving as well.

The industry is moving toward smarter and more adaptive protection. These systems understand context, recognize when something feels off, and strengthen defenses in real time. Instead of reacting after damage is done, prevention is becoming proactive and built into every part of the user experience.

Progress will depend on people as much as technology. The more users understand how their credentials are protected and how to spot risks early, the stronger the entire ecosystem becomes. The goal now is to build systems where trust and security work together to protect identity and confidence online.