{"id":91352,"date":"2023-03-10T10:00:28","date_gmt":"2023-03-10T10:00:28","guid":{"rendered":"https:\/\/feedzai.com\/?p=91352"},"modified":"2024-04-09T09:13:36","modified_gmt":"2024-04-09T09:13:36","slug":"how-to-boost-fraud-detection-to-combat-ato-fraud","status":"publish","type":"post","link":"https:\/\/feedzai.com\/blog\/how-to-boost-fraud-detection-to-combat-ato-fraud\/","title":{"rendered":"How to Boost Fraud Detection to Combat ATO Fraud"},"content":{"rendered":"
[vc_row row_height_percent=”0″ override_padding=”yes” h_padding=”2″ top_padding=”1″ bottom_padding=”2″ overlay_alpha=”50″ gutter_size=”3″ column_width_percent=”100″ shift_y=”0″ z_index=”0″][vc_column width=”1\/1″][vc_row_inner][vc_column_inner width=”1\/12″][\/vc_column_inner][vc_column_inner width=”10\/12″][vc_single_image media=”91356″ media_width_percent=”100″ uncode_shortcode_id=”465426″][\/vc_column_inner][vc_column_inner width=”1\/12″][\/vc_column_inner][\/vc_row_inner][vc_row_inner][vc_column_inner column_width_percent=”100″ gutter_size=”3″ overlay_alpha=”50″ shift_x=”0″ shift_y=”0″ shift_y_down=”0″ z_index=”0″ medium_width=”0″ mobile_visibility=”yes” mobile_width=”0″ width=”2\/12″][\/vc_column_inner][vc_column_inner width=”8\/12″][vc_custom_heading heading_semantic=”h3″ text_size=”h3″ text_weight=”400″ uncode_shortcode_id=”365817″]Account takeover (ATO) fraud attacks<\/a> were once large-scale, \u201cscattershot\u201d campaigns. In recent years, however, they have morphed into smaller, more finely-tuned attacks. As a result, they are significantly more effective. Here\u2019s what you need to know to fight back and protect your business. <\/span>[\/vc_custom_heading][vc_column_text uncode_shortcode_id=”350854″]<\/p>\n Fueled by societal and economic instability, fraudsters utilize fraud-as-a-service social engineering sites and easily obtain malware to commit identity theft and access customer accounts (i.e., phishing attacks, stolen account credentials, remote access trojans (RATs)). The costs of these attacks can be substantial. Recent <\/span>data<\/span><\/a> indicates the global average cost of a data breach reached $4.35 million in 2022. In the United States, the average cost of a data breach is $9.44 million – more than twice as high as the global average.<\/span> It\u2019s no secret that fraud is a constant game of cat and mouse: bad actors develop new attack techniques and utilize the latest credential-stuffing automation technology while banks upgrade their capabilities in response to keep pace. But why is the <\/span>cost of ATO<\/span><\/a> rising so rapidly?<\/span>[\/vc_column_text][vc_single_image media=”120141″ media_width_percent=”100″ uncode_shortcode_id=”117146″ el_class=”hide-in-mobile”][vc_single_image media=”120145″ media_width_percent=”100″ uncode_shortcode_id=”664480″ el_class=”hide-in-desktop-tablet”][vc_column_text uncode_shortcode_id=”141285″]<\/p>\n There is a two-part answer to this question. First, the expansion of new payment methods and increased speed of payment transactions over the past decade enables fraudsters to rapidly scale their operations and profit faster from their scams.\u00a0<\/span><\/p>\n Peer-to-peer (P2P) payment applications have <\/span>steadily increased<\/span><\/a> among consumers in the U.S. As these P2P apps have been developed and rolled out, they\u2019ve been key targets for fraudsters to exploit. The P2P platform Zelle, for example, recently marked its 5-year anniversary by logging <\/span>$1.5 trillion in transactions<\/span><\/a> since its 2017 inception. While Early Warning Services, the company that operates the Zelle network claims 99.9% of these transactions are fraud- and scam-free, a report by a US lawmaker claims otherwise. The <\/span>report<\/span><\/a> by Sen. Elizabeth Warren (D-MA) found banks only reimbursed 47% of the dollar value to consumers who claimed they experienced unauthorized payments on Zelle in 2021 and the first half of 2022.<\/span><\/p>\n Second, fraudsters realize that banks are often slow to determine whether an ATO attack is in progress and stop it before the fraud is committed. Current ATO solutions focus on detection and alerts, placing the remediation burden on the bank\u2019s transaction monitoring system to stop fraud. This gives fraudsters a window of opportunity to commit account takeover fraud before a bank responds.<\/span><\/p>\n Recovering the money exfiltrated via these new digital channels is extremely difficult, which further contributes to the growth of ATO fraud. Combine that fact with the rapid growth of anonymous payment methods (e.g., different types of cryptocurrency), and fraudsters have several ways to move money quickly out of accounts.<\/span><\/p>\n With the above method of exfiltrating funds, ATO attacks become even more widespread thanks to the availability of personal information compromised through data breaches. A recent <\/span>report<\/span><\/a> recorded 1,802 data breaches in 2022 affecting over 422 million victims. Interestingly, this figure is just 60 data breaches short of the 2021 record.<\/span><\/p>\nThe Rising Cost of ATO Fraud<\/span><\/h3>\n
\n<\/span><\/p>\n2 Key Reasons Why Account Takeover Fraud is Rising<\/h3>\n
How Fraudsters Pull Off ATO Fraud Attacks<\/span><\/h3>\n