Account takeover (ATO) fraud is a type of identity theft that happens when a fraudster uses part of a victim’s identity, such as their Social Security number or email address, to take over the victim’s account.
Account takeover (ATO) fraud can impact checking and savings accounts, brokerage, and even loyalty accounts.
ATO fraud has been a growing concern for years and accounted for every fifth login attempt and 13% of U.S. ecommerce fraud costs in 2021. ATO fraud can lead to high chargeback rates.
Businesses that sell subscriptions often find themselves at a particularly higher risk for ATOs because companies have established relationships with customers and don’t necessarily notice anything different about the transactions.
Identifying ATO fraud
ATO fraud can be identified by screening orders for fraud indicators, even if it’s from a longstanding customer. Any new device, location, product category, or delivery address could signal fraud — or it could indicate a trustworthy customer doing something new.
In rare cases, a secondary contextual review may be necessary to avoid rejecting a valid customer.
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