Account Takeover vs. Identity Theft: What’s the difference?

Key Takeaways

• Core Difference: Account takeover (ATO) hijacks existing accounts, while identity theft involves creating new accounts using stolen personal data.
• Business Impact: ATO attacks surged by 24% in 2024, targeting 99% of organizations and costing billions in lost revenue.
• The Solution: Effective cyberfraud protection requires intent-based detection to stop bots and AI agents before they execute attacks.

Best Protection: While MFA helps, it is not foolproof. Real-time Account Takeover Protection is required to block the automated bots that drive these attacks.

On the Internet, nobody knows you’re a dog. That was the caption of Peter Steiner’s legendary cartoon, published by The New Yorker in 1993, which became an iconic meme that symbolized internet anonymity. Much has changed since then. While regular users don’t have easy anonymity on the internet anymore, cybercriminals can break into people’s online accounts and/or mimic their identities in so-called account takeover (ATO) and identity theft attacks.

Such attacks are not only damaging for individuals, but for companies too. The effects of a corporate account takeover or even of allowing a hacker to open a user account with a stolen identity can shake up any company—and lead to financial, reputational, and organizational losses that you’d rather avoid. This article will outline what you can do to mitigate account takeover risks and protect yourself against identity theft attacks. 

Table of Contents:

• Account Takeover vs. Identity Theft: What Is the Difference?
• How Account Takeover (ATO) Attacks Work
  • Common Indicators of an ATO
  • How can businesses protect themselves against ATO?
• How Online Identity Theft Works
  • Common Indicators of Identity Theft
  • How can businesses protect themselves against identity theft?
• Protect Your Business Against the Growing Threat of Account Takeover and Identity Theft

What is the difference between account takeover and identity theft?

Account takeover refers to the hijacking of an account that belongs to someone else, while identity theft refers to opening a new account with someone’s stolen identity information. Account takeovers can happen to both corporations and individuals, while identity theft can only happen to individuals. Both are serious, damaging types of fraud.

However, there is some overlap between account takeover and identity theft. Sometimes, a hacker breaking into an account can lead to identity theft, because the account has sensitive personal information attached to it. Additionally, ATO can be seen as a form of identity theft when a hacker pretends to be the genuine user of a hacked user account to buy products or services.

How does ATO work?

ATO happens when a cybercriminal breaks into someone else’s account. This account can be either of an individual or a company, and it can be any type of account that requires login credentials: a bank account, social media account, email account, shopping account, et cetera. Any account that holds potentially sensitive information is a target for ATO.

How such a break-in happens can vary widely. Cybercriminals use many techniques: phishing, malware, bot attacks, and social engineering. Corporate ATOs lead to severe reputational and financial damage. In fact, ATO attacks increased by 24% year-over-year in 2024, with total losses from account takeover fraud estimated at nearly $13 billion annually. This surge highlights why ATO fraud prevention is no longer optional for modern enterprises.

Common Indicators of an ATO

Despite the various ways cybercriminals can break into accounts, there are usually a few common indicators that should raise suspicion with a company’s security or DevSecOps team:

• Social engineering attempts: If your employees receive a growing number of targeted messages via email or text, asking for sensitive information under the pretense of being a high-level executive, your company may be under a comprehensive ATO attack.
• Unusual network activity: If a large number of bots land on your login pages or if you suddenly receive many requests from countries in which you don’t do business, you may be at risk of an ATO attack (or another automated attack).
• Account information changes: If you receive notifications that some details on your corporate accounts are changing, such as contact information, addresses, or logins, you should log into your account immediately and change the password before the hacker does.  
• Unexpected password resets: This is a dead giveaway for a corporate ATO. If one of the company’s accounts changes passwords and no one knows why, a cybercriminal has just broken in. Contact the host company immediately to freeze your account.
• Unauthorized transactions: Financial fraud is one of the major types of fraud ATO leads to. If a hacker gains access to one of your financial accounts and moves money away from the account, you need to contact your financial institution immediately to freeze or revert the transfer.

How can businesses protect themselves against ATO?

Proper ATO protection can be achieved with a few simple rules. For one, ATO detection software can stop all automated threats before they even land on your websites or mobile apps. Such software will immediately make it much harder to break into your accounts, because hackers will now have to target you manually. And if there’s one thing they don’t like to do, it’s doing things manually.

Automated threats are relentless. As Andrei Rebrov, CTO & Co-Founder of Scentbird, explains regarding their fight against ATO: “The number of fraudulent orders and cyberattacks have gone up like crazy… DataDome takes the pressure off, and I can sleep better at night.” Real-time protection doesn’t just stop fraud; it frees your team to focus on core business growth.

Other good ways to prevent ATO include: enforcing strong passwords and multi-factor authentication for all accounts, educating your employees on typical social engineering attacks, making sure everyone has the right amount of access to your accounts, and ensuring that all the third-party applications you’re connected to are secure and properly updated.

How does identity theft work?

Online identity theft is a growing threat. The threat landscape has intensified rapidly. According to recent industry reports, account takeover scams increased by 250% in 2024, while identity fraud losses reached $27.2 billion, a 19% increase year-over-year. More and more people are being impersonated online.

Common Indicators of Identity Theft

There’s significant overlap between ATO and identity theft. While identity theft is often used to create new accounts, someone’s personal information can also be used to break into their account. For example, if you know someone’s email address and their birthday (which often aren’t particularly hard to find online), hackers can use that information to create a script that runs through all possible birthday combinations as the password of their online accounts, with the email as the login. Do this for ten thousand people and chances are you’ll break into a few accounts. 

In such a scenario, ATO is made possible through identity theft. It’s also why many of the indicators of a successful ATO are the same as the indicators of identity theft: password changes, account information changes, and unauthorized transactions especially. However, it’s harder for a company to notice these changes, because they may believe it’s just the individual making these changes. Only the individual themselves will understand that something’s wrong with their user account.

Other indicators of identity theft are unexpected bills, denied loan applications, or inaccurate information on credit reports. These indicate that someone gained access to your personal details and tried to open a new account impersonating you. These indicators are just as scary, if not scarier, than an ATO, but individuals often have strong legal protection mechanisms that allow them to close down such accounts without serious financial losses (although it can sometimes be an administrative burden).

How can businesses protect clients against identity theft?

Companies bear a responsibility to keep their users’ data safe. Because identity theft is similar to ATO, what works against ATO will work against identity theft too: strong passwords and MFA, powerful ATO fraud solutions that block malicious automated traffic, employees who are aware of social engineering techniques, and proper access controls.

The legal mechanisms that protect individuals against ATOs and identity theft don’t exist for companies. There’s no way for a company to revert the reputational damage a corporate ATO can lead to. The company bears the blame for any security intrusion and will often be punished financially by legal frameworks that protect user data. That’s why the importance of protecting against ATOs and identity theft cannot be emphasized enough.

Protect Your Business Against the Growing Threat of ATO and Identity Theft

DataDome is bot protection software that protects your websites, mobile apps, and APIs against unwanted automated traffic. It analyzes every request and determines the humanity of a request within two milliseconds, blocking malicious bots before they can do any form of damage while letting through bots that you’ve allowed (such as the Googlebot).

DataDome takes only minutes to install, is lightweight, and fits neatly inside your existing tech architecture. It protects your users’ data and your corporate accounts, and is compliant with global data privacy laws. If you’d like to see how it works, schedule a live product demo or start a 30-day free trial today.

Sources

https://javelinstrategy.com/research/2025-identity-fraud-study-breaking-barriers-innovation

https://learn.g2.com/identity-theft-statistics