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Account Takeover Frauds – Impact, Causes, and Prevention

Living in the era of technology, the world is rapidly moving towards digitization. From banking institutions to shopping stores, every organization is shifting its operations online. Going digital is no doubt providing a competitive edge to organizations to meet customer demands. On the other hand, the online presence has raised serious concerns for both individuals and businesses by exposing digital information to cybercriminals. As a result, there has been a significant increase in digital fraud, specifically account takeover (ATO) fraud. 

What is account takeover fraud?

 

Account takeover (ATO) fraud is the type of identity fraud that involves unauthorized criminal access to a user’s account to use it for some type of personal and financial gain. The increased presence of people on the internet and involvement in activities like online shopping and banking and convenient funds transfer has opened new opportunities for criminals looking to make extra cash.

ATO fraud can involve the exploitation of multiple types of online accounts, including online banking, eCommerce, mobile, and social media accounts. Generally, cybercriminals and fraudsters lookout for the accounts from which they can steal money and gain monetary advantages. For instance, targeting bank accounts for fund transfer to own account or eCommerce accounts to make fraudulent purchases. Also, the imposters can take over social media accounts and request money from the family and friends of the victims.

Ecommerce platforms are the most profitable for criminals due to frictionless payment systems. In e-commerce sites, due to instant purchase functionality, all the billing information is stored in the user account that makes it convenient for the customers to make purchases. But it also makes it handy for criminals to simply change the shipping address and start making a purchase, once they discover the login credentials.

Impact of ATO Frauds

 

Account takeover fraud rates have been on the rise for the last few years. Every year the individuals and businesses incur huge losses due to ATO frauds. Mostly customers are the ones who endure monetary losses. In addition, in most cases, they not only lose time in resolving fraud but also suffer a damaged reputation and relationships, for example, in the case of social media account take over. Businesses, however, suffer losses in the form of chargebacks and bruised reputation. 

Last year in May, KREM2 reported a case ATO fraud in which the victim, “Allie Raye” wasn’t aware of the fraud until she started receiving shipping notices and orders from Amazon. Even after discovering it, it was very difficult for her to stop the fraudulent orders – that included several gift cards. It took her around three weeks to regain hold of her account and all this while she lost $1,640 in fraudulent purchases. In that case, the Amazon had to suffer the actual loss by ultimately refunding Raye the whole amount.

 

Factors fueling ATO frauds

 

Account takeover fraud is a serious concern not only for the individuals but businesses as well. The technological innovations have made the fraudsters more sophisticated in accessing users’ information. There are multiple factors that are fueling ATO frauds, some of them are: 

 

  • Data Breaches

 

One of the main driving factors behind account takeover frauds is the increasing trend of data breaches. The purpose of a data breach is to access the records of the customers containing their information – for example, usernames, passwords, account numbers, and card numbers, etc. The list obtained from the breach is sold in the black market where the numbers of cybercriminals are readily looking for users’ data.

When the username and password of an account are known, hackers try the same combination on multiple online platforms through various automated tools – known as credential stuffing. According to Perimeterx Research, there is an 8% success chance of these attacks. Moreover, if criminals have access to the username and email address they can use multiple attacks, for instance, brute force, to guess the passwords. 

 

  • Weak Password Practice and Inefficient Authentication

 

More online presence of individuals means more accounts. It means users have to remember all the usernames and passwords for different accounts. The difficulty memorizing them encourages the users to set the same passwords for multiple accounts. This is a very common yet highly risky practice. It is found that 21% of people use passwords that are 10 years old and at least 71% reuse their passwords. This weak password practice exposes users to cybercriminals. Through brute force attacks and credential stuffing, they can easily take hold of users’ credentials and accounts.

Most of the organizations still rely on the binary authentication method i.e. using username and password. Anyone having access to those credentials can easily log in to the account and do whatever they want. This is one of the main reasons for account takeover.

 

  • Social Engineering Tactics

 

The advent of technology has significantly provided fraudsters and imposters with advanced social engineering tactics; phishing is one of them. Through phishing attacks, cybercriminals are accessing user credentials by tricking the users. There are multiple ways through which these attacks can occur – including through email, text message or even over the phone. However, the purpose is the same, i.e, trying to get the users to hand over their information.

An example of such an attack is receiving an email that persuades you to click the link and prompt the login page to enter your credentials which are stolen by criminals.

 

  • Threat by Device

 

Another factor that is driving the ATO fraud threat is through smart devices – mobiles and mobile applications are prime targets of cybercriminals for ATO fraud. One of the major reasons for this is the technology lag. Regardless of advanced tools designed to protect users on web browsers, those tools don’t work for mobile apps at the same time. According to Rippleshot’s State of Card Fraud 2018 report, mobile phones are becoming increasingly vulnerable targets of ATO frauds and would rise in the future as well.

 

Factors fueling ATO frauds

How to prevent ATO frauds?

 

 

No doubt ATO fraud is the major concern for the businesses especially for e-commerce, however, they can be prevented using proper user verification at the time of onboarding. Sometimes after committing the ATO fraud, the fraudsters use that information of the user to create another account. Through digital identity verification services, businesses can ensure the identity of real users and hinder the fraudster from creating fake accounts – i.e. committing identity theft.

 

  • Identity Authentication

 

The main factor that fuels ATO frauds, is the lack of proper authentication checks. In this world of no trust, stealing someone’s credentials is no more a difficult task. By applying the social engineering phenomenon, the fraudsters can trick users to provide their information. If online businesses follow proper and advanced authentication services like 2-Factor Authentication and Biometric verification through Face verification, then the account takeover frauds can be prevented.

The users who fail to verify and authenticate their identity can be hindered from accessing the account in real-time. 

 

  • Monitoring Payments

 

ATO frauds are done to gain monetary benefits mostly. The frictionless mobile and online payments are no doubt enhancing the user experience, but at the same time, it is grabbing the attention of cybercriminals. Whenever the imposters take over the account, let’s say bank account, the first thing they do is transfer money to their account.

Due to a lack of payment monitoring or authentication before processing transactions, the cybercriminals are successful in making fraudulent payments. Monitoring the payment every single time when a user request a transaction can combat fraudsters in real-time. 

Face Verification – A Strong Weapon against ATO frauds

 

Face verification is the advanced form of biometric verification powered by artificial intelligence and machine learning algorithms. The traditional verification and authentication check have failed to prevent the fraudsters from accessing the users’ data and personally identifiable information (PII). Integrating face verification API with the existing platforms can identify the fraudsters beforehand who may try to enter the system through spoofing measures.

 

Face Verification - A Strong Weapon against ATO frauds

Biometric Identification Shuftipro

Biometric identification Analysis and Facial Recognition Technology

Identity verification services might have been the most innovative and effective way to cut down on online frauds and identity theft cases but this business practice had the potential of being redundant. Now the identity verification service providers are seeking to make KYC verifications airtight through features like Biometric identification and facial recognition.

What is biometric identification?

Biometric identification is a verification method in which unique biometric features of a person are used to validate their identity credentials. Earlier, only physical biometric authentication was possible with no chance for remote biometric verification. Users had to physically provide their biometric evidence as proof of their identity for example retinal scan and fingerprints. But now the mobile technology has reached such advanced levels that fingerprint scan and retinal scan features are available in even the mid-range smartphone available to the populace.

This has enabled companies, and more importantly identity verification services, to integrate biometric identification as the premier source of identity verification.

Why Biometric authentication?

In the past, verifying the identity of a potential user was considered easy with the help of an identity document. But more and more cases were coming forward where users with fake credentials and even forged documents were able to register for a service. This created a barrage of cashback requests and identity theft claims for businesses and regulators, alike. User authentication was given a shot in the arm with the help of biometric authentications that can use distinctive biometric features of a person to verify their identity.

Although, major corporations and businesses are still in favor of a detailed KYC verification at the time of customer registration but biometric identification is being projected as an easier version of performing identity verification. For example, a bank can require a potential user to undergo a thorough examination of their identity using document verification, address verification, and phone number verification. But once banks have brought onboard a customer, they can use biometric verifications to authenticate large transactions, change of pin code or other vital banking actions.

Facial Verification – The Most Secure Verification?

People consider that fingerprint scans and retinal scans are the only viable options for biometric identification. But actually, facial verification is also an effective way to use biometric features of a person to ascertain their identity. Additionally, they are much more secure and don’t require any special equipment. All you need is an HD camera to take a shot of a person or to record a video stream of a few seconds of that person. Rest of the verification can be performed remotely or on the spot to ensure that a real person with a valid identity wants to use a particular service.

How does Facial Verification Works?

Facial Verification tracks distinctive facial markers of a person and checks them for authenticity. Features like liveness detection and facial recognition are typically used by a KYC provider like Shufti Pro offering Facial verification to its customers. The Facial verification process is the main aspect of Shufti Pro’s biometric authentication service and it is entirely handled by Artificial Intelligence, eliminating any chance of Human tampering. Liveness detection ensures that the person performing the verification is not using an image of a different person to validate their identity. Microexpressions are traced and verified by Shufti Pro to provide results that are highly credible. Any attempt to fake a facial feature or use some other tech to deceive the KYC system of Shufti Pro is instantly reported and the verification status is declared simply, “Not Verified”

The beauty of this entire facial verification service from Shufti Pro is the Proof of verification. It is a special feature from Shufti Pro that allows its customers to check why verification requests were rejected or, for that matter, why they were verified. Customers will be able to view for themselves the facial spoof attacks that were effortlessly identified and rejected by Shufti Pro’s superior Artificial Intelligence technology.

Real-Time User Authentication

Many businesses require instant user authentication for quicky service delivery to their customers. This a classical conundrum between speed and efficiency of a typical identity verification process. But Shufti Pro has solved it through its machine learning algorithms. Facial verification and all other KYC verifications offered by Shufti Pro are built upon this technology that becomes smarter with every verification. Each facial spoof attacks makes it easier to identify next time the similar trick is used for facial verification. Similarly, every authentication of valid facial identity also enables to process every next valid verification request much more easily and quickly.

Biometric identification service is coupled with Handwritten note verification service of Shufti Pro to provide Biometric consent verification as well. There are hundreds of use cases for this services, with few of those mentioned below

  • Businesses can ask their users to show their face along with a handwritten note showing time and date at which they are applying for a service.
  • Banks can direct customers to write down the amount they want to send to another account and show it to their webcam/phone cam along with their face to authenticate that transaction.

So, Shufti Pro has developed a biometric identification that is easy to work with and secure as Fort Knox. Integration of Shufti Pro’s facial verification and various other services is entirely hassle-free and will require no downtime what so ever because of it RestFul API.

Feel free to contact our sales team for more information on facial verification or for details regarding any of our other identity verification service.

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How Liveness Detection is an apt Answer for Facial Spoof Attacks?

Facial Recognition Liveness

How Liveness Detection is an apt Answer for Facial Spoof Attacks?

The world went haywire on the launch of the new iPhone X; well, to be honest, when does it not? However, Apple made sure they deliver the next best X factor – Facial Verification, which includes the crucial Liveness Detection measure.

We have seen, biometric verification being a part of smartphones for a while now, through the fingerprint scanner. Though fingerprint scanners have been prone to spoofing using artificial fingers and realistic finger prints.

The most rapidly growing biometric identification has been facial recognition. An individual’s face is required to authenticate their identity, which acts as their own unique credential to gain access into a system. As fingerprint biometric are at risk from fraud, likewise facial recognition systems are vulnerable to – ‘Face Spoof Attacks’.

Face Spoof attacks have escalated recently. In order to combat this issue, anti-spoofing measures and technologies like Liveness Detection have been developed.

The Concept of Liveness Detection

It is a process assures that the live physical facial presence of a person is validated at the time of authentication via facial recognition. It emphasises on distinguishing a live person from a static portrait picture of an individual. 

 

Importance of Liveness Detection

Facial recognition systems need to have anti-spoofing measures in place. Liveness Detection is one of those measures that protects a system from unauthorised access. Ever since that, more and more traditional identity management systems are witnessing spoof attacks. Having adequate levels of liveness detection can greatly minimise the possibility of having break-in attempts. Having liveness detection as a part of your biometric verification process allows for a system that is closer to its maximum potential. It enables a user to feel safe and secure, thus leading to greater client trust and paving a path of improved business-client exchange and relations.

How liveness Detection Prevents Fraud

Where millions perform financial transaction or travel across the world, a few individuals intend to deceive rudimentary biometric identification management systems, by either providing fake fingerprints for biometric verification or a portrait picture for the facial recognition system.

Since, data is ever increasing and user authentication requires real time processing to validate an individual’s identity to prevent unauthorised access. It prevents biometric spoofing to take place. It brings in new techniques that involve the system to look past the surface of the skin. Ensuring the system can discriminate between the characteristics of live skin and the replication or copies of those characteristics within a fraction of seconds.

Liveness Detection In Facial Recognition 

The general public has a huge demand for security measures that ensure their privacy and authenticity is maintained without compromise. Facial recognition has become a part of many security measures and protocols in multiple organizations due its convenience, user friendliness,  direct and upfront approach. Even though new to the identity management system environment, facial liveness detection has become a measure of great importance associated to the prevention of identity theft and associated concerns.  

Liveness Detection finds most usage in facial recognition systems that are a part of a greater Identity Verification Suite. Most KYC service providers consist of a live Verification feature, to facilitate and enhance the effectiveness of a solution. Liveness Detection is added to ensure further strengthening of the system and prevent spoofing from taking place.

How Providers Incorporate Liveness Detection

Liveness detection is a relatively new but very effective technique found in facial recognition systems to prevent spoof attacks. How companies go about the procedure for liveness detection, varies from company to company and on the complexity of a system.

Shufti Pro ensures, to check for relative markers for liveness detection. Those relative markers consist of checks for eyes, color texture, photoshop, age and hair color differences. Additionally Shufti Pro’s AI engine performs careful scrutinization regarding depth perception.

Its deep machine learning engine ensures optimal 3D depth analysis is carried out through adequate comparisonal information. Based on computational Algorithm, different points on the image are compared to that of a previously digitized template. Shufti Pro’s liveness detection proves a person’s legitimate presence as well as prevent from facial spoof attacks.

It measures also include Image Distortion Analysis, 3D Sensing Techniques and Skin Texture Analysis to ensure maximum prevention from spoofing.

As a last measure of security, Shufti Pro Incorporates Human Intelligence as a part of its greater protective mechanism. As no technology is 100% accurate, Shufti Pro takes all precaution to manage any anomalies. Human eyes are in place to constantly keep vigilance in real time during a verification cycle.

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