Account takeover fraud rates skyrocketed 282% over last year
ATO is the weapon of choice for fraudsters leading up to the holiday shopping season, new data from Sift shows, and consumers place account security burden on businesses.
Account takeover (ATO) fraud attempts to steal from consumers and e-commerce merchants swelled 282% between Q2 2019 to Q2 2020, new data from digital trust and safety provider Sift finds. The ATO rate is the ratio of attempted fraudulent logins over total logins. ATO rates for physical e-commerce businesses jumped 378% since the start of the COVID-19 pandemic, Sift’s Q3 2020 Digital Trust & Safety Index found. This indicates that fraudsters are leaning heavily on this attack vector to steal payment information and rewards points stored in online accounts on merchant websites, according to the company.
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The index includes analysis from Sift’s global network of 34,000 sites and apps and from a survey of US consumers, the company said.
According to Deloitte’s annual holiday retail forecast, e-commerce sales are forecasted to grow between 25% and 35% and are expected to generate $182 billion and $196 billion this season. When combined with the surge in ATO rates, the 2020 holiday shopping season presents the perfect opportunity for fraudsters to leverage account takeovers to take advantage of more people shopping online, Sift said. “This can have a devastating impact on companies including financial repercussions and brand abandonment,” the company said.
Account hacking leads to brand abandonment
ATO attacks also create significant and lasting brand damage, Sift said. In surveying 1,000 US adult consumers, the company said it found that more than one-quarter (28%) of respondents would completely stop using a site or service if their accounts on that site were hacked.
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