Account takeover fraud has soared during the pandemic, according to a report released today by anti-fraud company Sift.
Sift’s Q3 2021 Digital Trust & Safety Index claims account takeovers increased threefold between Q2 2019 and Q2 2021. It now represents 39% of all fraud the company blocks.
Most of this increase happened during the pandemic, with attacks rising approximately 2.8 times in the past year alone. The rise is ongoing, the report said, having failed to revert to pre-pandemic levels.
Financial services were the hardest hit, with account takeovers increasing 850% between Q2 2020 and Q2 2021. However, most of these attacks focused on cryptocurrency wallets and accounts, which are a well-known target for scammers.
Criminals don't always do anything immediately obvious to stolen accounts, such as changing passwords. Instead, they test the account credentials on other services — an attack known as credential stuffing — to see if they can access the victim's other accounts too.
Hackers will also mine the accounts for credit card information, personal information, and password hints. This is perhaps why there are so many repeat victims, as half of them have had accounts hijacked multiple times.
Sift found that thieves stole money directly from 45% of victims, and 42% of account takeovers resulted in unauthorized purchases with a stored credit card. A quarter of victims lost loyalty and rewards points, and one in five were unsure of the total impact of the account takeover attack.
Automation is becoming a bigger factor in account takeover fraud, Sift warned. Attackers use bots to attempt credential stuffing attacks using large lists of login credentials purchased on the dark web.
They often use lists of servers that attempt to log in from different IP addresses to make their activities less suspicious. Sift correlates the addresses and servers to form clusters of known bad addresses. The number of IP addresses in the largest known IP cluster grew 50-fold between Q1 and Q2 2021, thanks to an automated account takeover fraud group called Proxy Phantom.
