Chris Hooper

As our 2024 Fraud Report demonstrates, fraudsters are highly adaptable, seeking to exploit the latest technology to support their criminal behavior. We can expect this to continue in 2024, with a particular focus on generative AI. Here are some more projections for 2024:

What does 2024 have in store for the world of fraud prevention? We predict more sophisticated AI attacks, the need for a holistic approach to combat a multitudinous fraud threat, and a big year for biometrics.

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Fraud Prevention

Fraud

Carl-Ruuben Soolep

Veriff's new RiskScore feature enables organizations to evaluate the risk of fraud associated with each identity verification session and, as a result, easily detect fraud patterns and make more informed decisions.

Veriff's new RiskScore feature evaluates the risk of fraud associated with each IDV session. Detect fraud patterns and make more informed decisions.

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Identity Verification

Don't miss the chance to explore the latest trends and gain actionable insights essential for combating fraud and protecting your business. Download our Identity Fraud Report 2024 today!

Account takeover fraud (ATO) occurs when a fraudster gains access to a customer’s account. Any online account can be taken over by a fraudster, and the criminal involved can cause a huge amount of financial damage. 

But, what do account takeover statistics tell us about how common this form of fraud is? In this guide, we’ll take a detailed look. As well as providing you with a summary of what account takeover fraud involves, we’ll take a deep dive into the latest account takeover fraud statistics. We’ll then conclude by explaining how your business can prevent ATO fraud.

Account takeover fraud is a form of identity theft. It involves a criminal taking over a customer’s account without their permission. 

In committing ATO fraud, a criminal actor will go through two steps. First of all, the fraudster will gain access to the victim’s account. They will usually achieve this by using stolen account information or information that has been sold to them.

Once a fraudster has gained access to an account, they will then make a series of non-monetary changes to the account. These include:

1) Changing the victim’s personally identifiable information

After the fraudster has completed these steps, they are then able to make a series of unauthorized transactions that appear legitimate. Alternatively, they may sell the confirmed account or the customer’s data to someone else.

When ATO fraud has occured, it can be difficult for the customer to reclaim the account without suffering a financial loss. The relationship between the customer and the business involved may also be irrevocably damaged.

Account takeover fraud is growing at a rapid rate. This is partly due to the fact that this type of fraud can be committed on almost any account, including:

The latest account takeover fraud statistics and facts

To discover more about the prevalence of account takeover fraud, we’ve taken a deep dive into the latest account takeover fraud statistics. Sadly, they show us just how common this type of fraud has become.

Online fraud attacks are growing at a faster rate than valid online financial transactions

According to recent reports, the number of online fraud attacks worldwide is growing at a more rapid rate than the number of valid online financial transactions. It’s estimated that in the first quarter of 2022, online fraud attacks rose by 233% worldwide. During the same period, the number of online transactions only increased by 65%.

According to a recent report, account takeover fraud increased by 90% between 2020 and 2021. Now, account takeover fraud costs an estimated $11.4 billion annually. 

Almost 1 in 4 Americans are ATO fraud victims

Almost a quarter of the American population has now experienced account takeover fraud first hand. 

At present, 22% of US adults have been victims of account takeover fraud. This equates to more than 24 million households.

Members of the public remain relatively unaware about the perils of ATO

On top of this, although account takeover attacks are now common, there are concerns that members of the public remain unaware of the threat and do not understand what it involves.

Research has shown that although 74% of individuals are aware of account takeover fraud as a potential threat, 18% are totally in the dark about what it involves, and another 9% are unsure if they have heard of it. This suggests that proper security awareness is not as prevalent as it should be.

Account takeover fraud costs huge sums of money

Estimates suggest that the average account breach costs $12,000. However, once they’ve successfully taken over an account, criminals will do everything they can to extract as much money as possible from the person involved before the breach is detected. For this reason, some account breaches cost much more. 

Repeat passwords make accounts vulnerable

60% of ATO cases now involve the use of a compromised password that has been used to protect multiple accounts.

The majority of ATO attacks originate on social media

Social media is a great tool for connecting people. However, social media accounts need to be properly protected and users must put adequate security precautions in place. Estimates now suggest that 51% of all account takeover attacks originate via social media. This is followed by bank accounts (32%), which are the second-highest reported takeover targets.

Almost one third of customers would stop using a website if their account was hacked

28% of customers say that if their account was successfully hacked then they would close their account. This means that if your business allows ATOs to occur, then the damage to your bottom line could be catastrophic.

Added to this, when news about the ATO leaks, it’s likely that this will cost your company future customers. This is because the stigma of a successful hack will push people towards your competitors instead.

More than 60% of ATO attacks target e-commerce accounts

Although ATOs can affect a wide variety of accounts, the majority of attacks target e-commerce accounts. This is because these accounts present cybercriminals with the opportunity to quickly profit.

In a survey of people who had their e-commerce account hacked, 37% of people said that money was extracted from their account following a successful hack. Meanwhile another 37% saw their account’s rewards and credits siphoned off through illegitimate purchases or other means. For many others, sensitive payment information was taken and leveraged for purchases either on the same website or elsewhere.

Account takeover attacks will soon overtake malware attacks as the number one concern for businesses

Account takeover and credential stuffing attacks rose significantly in both 2020 and 2021. Due to this, concern surrounding account takeover has also increased. As a result, ATO attacks are poised to overtake malware as the number one concern for businesses and customers.

The top five areas of concern are currently:  

2) Account takeover/credential abuse attacks

5) Attacks on brand and reputation in social media and on the web

6) Personally identifiable information harvesting is the number one threat faced by web apps

Personally identifiable information (PII) harvesting is now the number one threat faced by web apps. This method involves embedding malicious code in vulnerable JavaScript that captures personal data when users fill out a form.

As criminals have become more sophisticated, they have been able to run PII harvesting attacks without detection. Using these methods, they can now access user accounts, strengthen phishing attacks, steal identities, and perform other malicious activities.

As a result, 46.6% of those in the space believe that PII harvesting is the number one threat facing cyber apps. This is a 7% increase when compared with 2021.  

COVID-19 has created more opportunities for fraud

COVID-19 has fundamentally impacted the way that customers interact with businesses. The pandemic forced a number of businesses to move online, and now customers are demanding a seamless experience from these companies.

Due to this, these businesses have adopted digital wallets, contactless payment options, and new payment methods. However, because many of these businesses were unprepared for these changes, they’ve inadvertently left vulnerabilities in the system that are easy for fraudsters to exploit.

Now, 81% of fraud professionals feel that digital transformation efforts that were introduced in response to COVID-19 have created vulnerabilities that fraudsters can exploit.

Customer identity is the number one target for cyber attackers

Unsurprisingly, the latest account takeover fraud statistics also show that the percentage of people who are concerned about PII harvesting, credential stuffing, and ATO have all increased since 2021. This is because these attacks all have something in common: they involve the theft and fraudulent use of identity.

Smart criminals are carrying out attacks while hiding behind a legitimate identity as this provides them with numerous opportunities to commit fraud. Due to this, customer identity is now the number one target for cyber attackers.

Companies are slow to adapt to emerging risks

As organizations continue to grow and more of the world moves online, each organization’s attack surface continues to expand. However, research shows that although businesses are aware of the risks posed by moving online and the fact that malware, PII harvesting, credential stuffing, and ATO are areas for concern, the adoption of security tools to manage these risks remains low.

However, the good news is that website decision makers say that they’re trying to get their security infrastructure back on track. According to the data, 39.8% of organizations are considering purchasing a bot management solution. These solutions help defend web and mobile apps and APIs from the many types of attacks that utilize bot networks, including ATO, content scraping, and inventory hoarding.

How can you prevent account takeover fraud?

For businesses, preventing account takeover fraud can be tricky. This is because the activities that are associated with account takeover fraud occur hundreds of times a day and the vast majority of these customer-initiated account management actions are legitimate. The challenge for businesses is to work out which of these actions aren’t legitimate and are instead linked to account takeover fraud.

To do this, businesses must put the right processes and tools in place. These can help them differentiate between real customers and fraudsters. After all, if a business is unable to identify fraudsters in real time, the losses can quickly mount. This is because when a customer experiences account takeover fraud, they usually hold the company responsible for any lenient security measures that allowed the fraudster to access their account. However, at the same time, customers are easily frustrated when small requested changes result in excess scrutiny and become a hassle.

Due to this, businesses must find a balance between implementing adequate security and providing a seamless customer experience. The best way of achieving this is by verifying the identity of a user before they’re allowed to create an account and then authenticating a user each time they wish to make a change to their account.

By employing the use of identity verification software to help onboard a customer, a business can make the verification process swift, efficient, and accurate. In fact, with a piece of software like ours, a customer’s identity can be verified in as little as six seconds.

Then, when the customer wishes to make a change to their account, you can employ the use of a biometric authentication solution. This way, you can secure accounts, data access, and transactions.

The process is as fast and easy as taking a selfie. Thanks to powerful automation, a customer’s identity can be authenticated in as little as one second. Plus, we offer 99.99% accuracy and 99% of users are authenticated on their first try. This means that as well as keeping a customer’s data safe, you can also make the authentication process simple and seamless.

When account takeover fraud fraud has occured, it can be difficult for the customer to reclaim the account without suffering a financial loss. The relationship between the customer and the business involved may also be irrevocably damaged.

Explore detailed account takeover fraud statistics in our article, including the latest ATO fraud figures and actionable prevention methods for businesses.

Account Takeover Fraud Statistics | Veriff.com

A blog about account takeover fraud statistics, including the latest account takeover fraud statistics and how businesses can prevent ATO fraud.

Account takeover fraud statistics

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Data Dive: Exploring the Latest Account Takeover Fraud Statistics

As travel continues to rebound in a post-pandemic normal, mobility companies are navigating new protocols and evolving technologies to keep their users safe. We often speak of safety in terms of social distancing and potential collisions, but what about safety through the lens of identity theft and fraudulent rentals of electric scooters and bikes? 

The pandemic has quickly highlighted the need for micromobility services like scooter-sharing and bike-sharing for safe and easy transportation, prompting cities to open up new bike lanes at rapid speeds, and sales of micromobility vehicles to essentially go through the roof. Unfortunately, the rise in digital activity on mobility platforms has also led to an increase in fraud attempts, such as the creation of multiple accounts or using fraudulent IDs or driver's licenses to access a micromobility rental service.

For people to use ride-sharing services, they first need to verify their identities online and demonstrate that they are legitimately allowed to operate an electric scooter or bike. Renters want the ID-verification process to be as smooth and painless as possible so they can start using the service immediately. 

This is where Veriff’s technology comes into play, and where Joyride’s software platform makes ID verification an accessible reality for micromobility operators. 

We’re thrilled to be partnering with leading micromobility platform Joyride to provide their customers with seamless onboarding as well as fight increasing fraud threats in the mobility industry making travel more convenient, responsible, and safe.

Veriff helps Joyride operators ensure that:

The first thing operators must confirm before allowing people to rent a vehicle, be a driver or a rider is to check whether they are who they say they are, regardless of the type of identity document or nationality. 			

The driver has the right category license that’s actually active

These two questions go hand in hand and are critical to verify as they must comply with the laws and regulations of the correlating geography. Operators are responsible for ensuring their clients have an active driver’s license when they rent out cars, checking whether drivers have the right driving category listed (depending on the vehicle) and whether the license is active or expired or even suspended.			

The driver had the driver’s license for long enough

When renting a car/moped or when offering a driving service, companies usually require the driver to have at least a year or more of experience to reduce the risk of accidents. 			

Checking whether a driver is 18 or 21 (or old enough depending on the law in the corresponding region) is another important consideration for mobility companies in this sector. Enabling underage operators carries significant legal and safety risks. 

In fact, Veriff data shows there was more than a 40% increase in the overall fraud rate in the mobility sector during the first six months of 2021. This is due to an increase in online activity tied to the pandemic. It has never been more important for mobility operators to confirm their users are who they claim to be to ensure the safety of their passengers and guard against both vehicle and identity theft, making identity verification solutions like Veriff more essential than ever before.

Fraud in the mobility sector is not going away any time soon. While cities and communities worldwide begin to reopen and resume some sense of normalcy,  innovation, and demand within app-based car, scooter, or bike rentals will continue to unfold, leaving more opportunities for bad actors to take advantage. Veriff provides a fast and secure method to verify mobility customers, and its unique crosslinking technology helps catch fraudsters in the act, helping prevent some of the most prevalent types of mobility fraud (e.g recurring fraud) from happening again. 

How Veriff technology works through Joyride’s platform:

We are committed to combating increasing mobility fraud rates by partnering with mobility solutions like Joyride to help provide a fast, secure and seamless verification experience. 

Veriff are thrilled to be partnering with leading micromobility platform Joyride to provide their customers with seamless onboarding, as well as fight increasing fraud threats making travel more convenient, responsible, and safe.

Mobility

We're excited to partner with Joyride, a leading micromobility platform to provide their customers with seamless onboarding, fight fraud, and help make travel more convenient, responsible, and safe.

A partnership between Veriff & leading micro-mobility platform Joyride, to offer seamless onboarding & fight increasing fraud threats in the mobility industry.

How Veriff & Joyride Fight Mobility Fraud | Veriff.com

An announcement of the partnership between Veriff and leading micromobility platform Joyride, to offer seamless onboarding and fight increasing fraud threats in the mobility industry.

Beyond Boundaries: How Veriff and Joyride Collaborate to Tackle Mobility Fraud

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Fraud projections for 2024

Veriff launches RiskScore to calculate fraud risk during IDV sessions

Risk on the Rise: Exploring the Unprecedented Growth of Identity Fraud in BNPL 2023

Data Dive: Exploring the Latest Account Takeover Fraud Statistics

Beyond Boundaries: How Veriff and Joyride Collaborate to Tackle Mobility Fraud

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Fraud News

Latest Resources

Fraud projections for 2024

Veriff launches RiskScore to calculate fraud risk during IDV sessions

Risk on the Rise: Exploring the Unprecedented Growth of Identity Fraud in BNPL 2023

Data Dive: Exploring the Latest Account Takeover Fraud Statistics

Beyond Boundaries: How Veriff and Joyride Collaborate to Tackle Mobility Fraud

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