What is Account Takeover?

How Account Takeover Works

Account takeover starts with stolen credentials. Fraudsters get these through massive data breaches where millions of usernames and passwords leak. Fraudlogix IP Risk Score identifies suspicious login attempts by analyzing IP characteristics, location mismatches, and behavioral anomalies. Every major breach adds to the pile of available credentials floating around the dark web. People reuse passwords across sites, so one breach at a retailer gives fraudsters the keys to try the same login at banks, payment apps, and anywhere else the victim has accounts.

Once they have credentials, fraudsters use automated tools to test them across hundreds or thousands of sites. This is called credential stuffing. They spin up bots that try username/password combinations at scale, looking for matches. Most attempts fail, but with billions of stolen credentials available, even a 1% success rate means millions of compromised accounts.

After successfully logging in, attackers move fast. In financial accounts, they drain balances, set up fraudulent transfers, or apply for credit. In e-commerce accounts, they use stored payment methods to buy goods for resale. Loyalty program accounts get stripped of points and miles. Some attackers just steal personal data to sell or use for identity theft.

The scary part is how normal everything looks. The fraudster logs in with valid credentials, so systems don't see anything wrong. They might change the email or phone number on file to lock out the real owner. By the time the victim realizes something's wrong, money and data are already gone.

Common Attack Methods

Fraudsters use several techniques to get inside accounts, each with different levels of sophistication.

Credential Stuffing

The most common method. Attackers use automated tools to test stolen username/password pairs across multiple sites through credential stuffing attacks. They know people reuse passwords, so they try credentials from one breach at dozens of other platforms. Success rates are low (typically 0.1-2%), but the scale is massive. A fraudster testing 1 million credential pairs at a 1% success rate still compromises 10,000 accounts.

Phishing and Social Engineering

Tricking users into giving up credentials directly. Fake emails that look like password reset requests from banks or retailers. Fake login pages that capture usernames and passwords. Phone calls from people claiming to be tech support who convince victims to share account details. These attacks work because they exploit trust rather than technical vulnerabilities.

Brute Force Attacks

Systematically trying every possible password combination until finding the right one. This only works on accounts without rate limiting or lockout policies. Most modern systems block this, but some older platforms or APIs still allow enough attempts to make it viable for simple passwords.

Session Hijacking

Stealing active session tokens or cookies to bypass login entirely. If an attacker gets your session cookie through malware or network interception, they can impersonate you without needing your password. This is why sites force re-login when you access from a new device or location.

SIM Swapping

Social engineering mobile carriers to transfer a victim's phone number to an attacker's SIM card. This defeats SMS-based two-factor authentication since the attacker now receives the verification codes. They use the phone access to reset passwords and take over accounts.

Malware and Keyloggers

Installing software on victim devices that records keystrokes or steals saved passwords. The victim types their credentials normally, but the malware captures and transmits them to attackers. This also bypasses two-factor authentication since the malware runs on a trusted device.

How to Detect Account Takeover

Since attackers use valid credentials, detection relies on spotting unusual behavior patterns rather than blocking bad passwords.

IP Risk Scoring

The most effective early warning system. IP Risk Score evaluates every login attempt in real-time, identifying suspicious characteristics like data center origins, proxy usage, VPN connections, or IPs with fraud history. Most legitimate users don't log in from data centers or anonymizing services, so these are strong fraud signals.

IP geolocation patterns matter too. If someone logs in from New York at 2pm, then Paris at 2:15pm, something's wrong. IP risk scoring catches these impossible travel scenarios automatically.

Behavioral Analysis

Compare current activity to the user's normal patterns. Does the login happen at an unusual time? Is the device or browser different from what they typically use? Are they accessing features or pages they've never touched before? Big deviations from baseline behavior suggest account compromise.

Velocity Checks

Monitor login attempt frequency. A real user trying to log in might fail once or twice if they mistype their password. A credential stuffing bot might try 50 different username/password combinations in 10 seconds. Velocity rules catch this automated behavior.

Device Fingerprinting

Track unique device characteristics using device fingerprinting. When someone logs in from a completely new device that doesn't match any of the user's previous sessions, that's a red flag worth investigating. Device fingerprinting looks at browser version, screen resolution, installed fonts, timezone, and dozens of other attributes to identify devices.

Transaction Monitoring

Watch what happens after login. Attackers often immediately change account settings, update contact information, or make large transactions. Monitoring for these red flags right after authentication catches takeover attempts before major damage occurs.

How to Prevent Account Takeover

Preventing ATO requires layers of defense since no single method stops all attacks.

1. Real-Time IP Risk Scoring

Deploy IP Risk Score to evaluate every login attempt before granting access. Risk scoring identifies data center IPs, proxies, VPNs, and known fraud sources instantly. High-risk logins get challenged with additional verification while low-risk logins proceed smoothly. This catches credential stuffing bots and suspicious access attempts before they succeed.

2. Multi-Factor Authentication (MFA)

Require something beyond just a password. Time-based one-time passwords (TOTP) from authenticator apps are best. SMS codes work but are vulnerable to SIM swapping. Hardware security keys offer the strongest protection. Even if attackers have credentials, they can't get in without the second factor.

3. Pre-Bid IP Blocklists

Block known attack sources before they even reach your login page. IP Blocklists filter data centers, bot networks, and identified fraud infrastructure. This stops credential stuffing bots at the network level, reducing server load and attack surface.

4. Rate Limiting and CAPTCHA

Limit how many login attempts a single IP can make in a given timeframe. After 5-10 failed attempts, require CAPTCHA or temporary lockout. This breaks automated credential stuffing tools while barely impacting legitimate users who occasionally mistype passwords.

5. Password Policies and Breach Detection

Enforce strong password requirements and check new passwords against databases of known compromised credentials. Services like Have I Been Pwned let you verify that passwords haven't appeared in breaches. Force password resets when breaches affect your users.

6. Session Management

Implement aggressive session timeouts and require re-authentication for sensitive actions. Invalidate sessions when detecting suspicious activity like impossible travel or device changes. Log out all active sessions when users change passwords.

7. User Education

Teach users about password reuse risks and phishing tactics. The technical defenses work better when users also practice good security hygiene like unique passwords and recognizing phishing attempts.

Frequently Asked Questions