Account Takeover Prevention: How to Prevent ATO & Mitigate Fraud

Most account takeover attacks don’t start with a breach on your platform. They start somewhere else entirely: a hacked retailer, a leaked database, a breach your user doesn’t even know happened. The attacker buys those compromised credentials off the dark web, tests them against your login page, and if the password matches, they’re in.

Account takeover is one of the fastest-growing forms of online fraud. Five years ago, ATO cost the industry $6 billion a year and affected around 4 million consumers. By 2024, those numbers had jumped to nearly $16 billion in losses, with 5 million people affected. And the trajectory isn’t improving, as AI has made credential attacks faster to execute and phishing emails harder to spot, compressing the time between a leaked password and a compromised account.

What makes ATO particularly difficult to defend against is that attackers don’t need to breach your systems directly. They just need a leaked password from somewhere else. With billions of credentials circulating on the dark web, that’s rarely a problem. Once they have a username and password that works, they’re in — and most businesses don’t find out until a customer files a complaint.

The good news is that ATO is preventable. This guide walks through how attackers actually get in, what the damage looks like, and the layered defenses that stop them.

Key takeaways

• Account takeover occurs when criminals gain unauthorized access to an individual’s online account
• Credential stuffing and brute force bot attacks are the most common ATO methods, driven by password reuse and leaked credentials
• AI agents will reduce time to exploit account exposures by 50% by 2027, requiring more sophisticated cyberfraud protection
• Account takeover prevention requires multi-layered defense: credential monitoring, rate limiting, MFA, and AI-based detection software
• Best prevention: Use AI-powered detection software that analyzes behavioral patterns, device fingerprinting, and compromised credentials databases

What is an account takeover (ATO)?

Account takeover (ATO) is a form of online fraud in which attackers gain unauthorized access to a user’s existing account—typically through stolen or leaked credentials—and use that access for fraudulent purposes, such as stealing personal data, draining loyalty points, placing fraudulent orders, or moving money.

83% of organizations have experienced at least one account takeover in the last year, and 77% of security leaders rank account takeover attacks as one of their top four cyber threats. 

ATO prevention has become a business-critical priority for e-commerce, financial services, and any organization that manages customer accounts, especially as AI can help fraudsters carry out attacks at scale.

Gartner predicts that by 2027, AI agents will reduce the time it takes to exploit account exposures by 50%, making sophisticated cyberfraud protection more essential than ever.

The business impacts of account takeovers

Account takeovers don’t just harm consumers; they also come with negative consequences for businesses. For example, the negative impacts an e-commerce site may experience from account takeovers—especially repeated ATO attacks—include:

• Increased transaction disputes
• Increased chargebacks
• High customer churn
• Loss of trust in your business
• Damage to your brand’s reputation

Chargebacks are a huge cost for e-commerce websites, especially those using a third-party payment gateway. When your chargeback rate is high (meaning you process a lot of chargebacks compared to your total number of sales), your payment gateway company might raise your transaction fees, which can translate to very significant losses. 

Ultimately, account takeover attacks can be very damaging, not only to your brand image and customer trust in the long term, but also more directly to your bottom line.

How do account takeovers happen?

Perpetrators may use various techniques to attempt an account takeover. Here are some common ones:

Phishing

The attacker tricks potential victims into revealing their information voluntarily, using a fake login page, emails pretending to be someone the victim knows, etc. Phishing attacks can be very deceptive and specifically targeted.

Phishing attacks continue to evolve with AI. Since the launch of ChatGPT, phishing attacks increased by 4,151%, with security firm Barracuda recording over one million phishing attacks in just the first two months of 2025. 

Generative AI makes phishing more convincing by creating natural-sounding text, voice, and even video that mimics human behavior.

Credential stuffing

Using stolen or leaked credentials from one website or platform to try and access various other website accounts (in hopes the victim has reused their login credentials) is called credential stuffing, and it’s one of the most common ways to initiate ATO.

Brute force bot attacks

In a brute force attack, an attacker deploys bad bots to perform a rapid, high-volume attack on your website or app. Sophisticated bots can take over a significant number of accounts before getting caught, and they can rotate between thousands or millions of IP addresses. 

Session hijacking / Adversary-in-the-Middle (AiTM)

In an AiTM attack, the attacker positions themselves between the victim and a legitimate login page, intercepting the session cookie issued after a successful authentication. That cookie is the token that tells a website “this user already verified themselves,” and with it, the attacker can access the account without ever needing a password or MFA code. 

Increasingly delivered through phishing-as-a-service (PhaaS) platforms, AiTM attacks are accessible even to low-skill attackers and render traditional MFA ineffective.

SIM swapping

SIM swapping targets SMS-based MFA. The attacker convinces a mobile carrier to transfer the victim’s phone number to a SIM card they control, usually through social engineering or impersonation, then intercepts one-time passcodes to access any account relying on SMS verification. When the phone number itself can be hijacked, SMS-based MFA offers a false sense of security.

Malware & infostealers

Infostealers are malware designed to silently harvest credentials and session cookies directly from a victim’s device, typically delivered via phishing links or malicious downloads. 

What makes them particularly dangerous is that a stolen session cookie grants access to an already-authenticated account, bypassing passwords and MFA entirely. Harvested data is routinely sold on dark web marketplaces, putting stolen access at scale within reach of any attacker.

How to detect an account takeover in progress

Here are some important key signs you can use to detect ATO attempts on your website:

IP addresses from unusual countries

A sudden rise of IP addresses from one or more countries outside the usual access locations can be a good indicator of account takeover. The perpetrator might not know the account owner’s original location to mimic the right IP address. Pay extra attention when an account alters access locations before or after changing account credentials.

Several accounts changing to shared details

When an ATO attacker successfully claims an account, they typically change details like email address and password, so the original owner can’t access their account anymore. 

When similar changes to a shared detail (e.g. the same email address) are applied across more than one account, it is a huge sign there’s likely an ATO attack on your site.

Unknown device models

Cybercriminals often hide what device they are using through device spoofing to make it harder for you to detect the same device attempting to access multiple accounts. Your system will detect spoofed devices as “unknown.” 

If you have a higher ratio of unknown devices than usual, it’s a common sign of an incoming ATO attack.

Multiple accounts accessed by the same device

Sometimes attackers do not spoof or mask their device between logging into different accounts. Therefore, if they steal and access more than one account, they will all be linked to one device. 

However, sometimes devices are legitimately shared by authentic users with their friends or family members, so you should always double-check other factors to confirm if it is an ATO attack.

What are the most effective ways to prevent account takeover fraud?

1. Implement two-factor authentication (2FA) or multi-factor authentication (MFA)

Protecting user logins with two-factor authentication or multi-factor authentication is a great account takeover prevention strategy.

By asking users to verify their login activity with another method other than their password, you can create another barrier that malicious actors will have to get past in order to successfully launch an ATO.

You also don’t need to require 2FA on every login. You can make it adaptive according to the perceived risk (risk-based authentication). For example, you can ask for 2FA only after a user attempts to access the account with a different login device or from a different location than usual.

2. Check for compromised credentials

A key step in account takeover prevention and e-commerce fraud prevention is to compare new user credentials with a breached credentials database so you can know when a user is signing up with known breached credentials. 

You’ll also want to check your user database regularly in order to catch when existing users’ information becomes compromised and notify the users immediately.

3. Set rate limits on login attempts

You can set rate limits on login attempts based on username, device, and IP address based on your users’ usual behavior to help prevent account takeover. You can also incorporate limits on the use of proxies, VPNs, and other factors.

4. Send notifications of account changes

Always send your users a notification of any change made to their account. That way, they can notice right away if their account is compromised, ensuring that even if an attacker is able to overcome your authentication measures, you are helping to minimize risk and even prevent further damage.

5. Prevent account takeover with ATO prevention software

Because ATO attacks give themselves away through a myriad of small hints (such as login attempts from different devices and multiple failed login attempts), the easiest way to prevent them is by using a specialized account fraud protection software. 

Look for cybersecurity software that reviews all of the small signals in each request to your website, app, or API to root out suspicious behavior on autopilot. DataDome Account Protect uses multiple layers of machine learning to analyze requests to detect malicious user behavior within milliseconds.

How DataDome Account Protect prevents account takeover

DataDome Account Protect goes beyond traditional identity verification to focus on intent, because it’s not about knowing who’s real, it’s about what they intend to do. 

Our multi-layered AI engine analyzes thousands of signals to detect and block account takeover attempts in under 2 milliseconds, ensuring zero impact on legitimate user experience.

Proven results for cyberfraud protection

• 99% reduction in account takeovers across customer implementations
• 95% time saved on online fraud disputes, freeing security teams to focus on strategic priorities
• Millions saved in fraudulent charges, chargebacks, and dispute costs

Conclusion

Detecting account takeover attempts and effectively preventing them is very important for any website and company that provides credential-protected accounts. When your website is compromised, it can lead to a loss of consumer trust and permanent damage to your brand’s reputation.

From large enterprise websites and organizations to smaller companies—no online business or account holder is safe from being targeted with ATO. It is business-critical that you proactively secure your account takeover prevention, detection, and protection today. 

To see how your business could benefit from ATO protection, book a DataDome demo today.