Crush Account Fraud: 6 Key Strategies to Stop Scammers Cold

By Aurelie Guerrieri, Chief Marketing & Alliances Officer, DataDome
May 29, 2024

Crush Account Fraud: 6 Key Strategies to Stop Scammers Cold

By Aurelie Guerrieri, Chief Marketing & Alliances Officer, DataDome

Fraud Alert! Giants like GitLab, WhatsApp, Meta are just the latest to make headlines for the wrong reasons—victims of high-profile account takeovers. In our digital-first era, such threats are not just common; they're a clear and present danger, fueled by AI and sophisticated bots.

As commerce shifts online at breakneck speed, understanding and countering account fraud isn't just advisable—it's essential. Fail to fortify your defenses, and you risk more than money; your brand's reputation and customer trust are on the line.


The Magnitude of the Problem


Account fraud, particularly account takeovers (ATOs), has rapidly evolved, both in complexity and frequency. According to the MRC’s 2024 Global Payments & Fraud Report, merchants are facing more fraud attacks than they have in prior years, citing increased rates of ATO, as well as other types of fraud.


Indeed, fraudsters have intensified their attacks by adding tactics led by real users, targeting login and registration endpoints. By exploiting weaknesses in authentication protocols or by hijacking existing user accounts, they can bypass safeguards designed to prevent account fraud – putting businesses’ bottom lines and reputations at risk.


Complicating matters, merchants find themselves grappling with multiple dimensions of this issue, from operational drag to technological shortfalls. For example, many businesses still rely on manual processes, like meticulous spreadsheet analysis, to track and manage fraud attempts. This is not only time-consuming but often ineffective against sophisticated fraud strategies.


As are traditional, ID-based verification tools. Fraudsters can easily bypass these systems using advanced tactics such as synthetic identities and credential stuffing, leaving merchants vulnerable to unauthorized access… and financial woes. Outdated fraud prevention systems fail to effectively differentiate between legitimate customers and potential fraudsters, making high payment decline rates common, and often resulting in lost sales and dissatisfied customers.


And let’s not gloss over one of the most damaging effects of account fraud: potential media fallout. A single high-profile fraud incident can tarnish a merchant’s reputation, leading to a loss of customer trust and, ultimately, business.

This is all to say, in today’s fast-paced market, a patchwork passive approach to fraud detection is tantamount to inviting disaster. Continuous, real-time fraud monitoring isn’t just a best practice—it’s a necessity.


Without real-time safeguards, sessions can be hijacked by fraudsters, who then gain unauthorized access to user accounts. This scenario is particularly common in environments where session data is not continuously validated. Plus, relying on outdated identification data can lead to mismatches in user validation efforts, increasing the risk of fraud. Continuous updates and checks are crucial to ensuring that the data used for ID verification is current and accurate.


How to Beat Account Fraud


To effectively detect and combat account fraud, merchants must adopt a proactive and dynamic approach. Stopping fraud before it happens is the ultimate goal; businesses can protect their digital assets and data, while also increasing productivity.  Here are key strategies that can significantly enhance your defense:

  • Implement Real-Time Monitoring: Integrating a system that monitors and analyzes each transaction in real time allows merchants to detect and respond to fraudulent activities instantaneously. This not only helps in identifying suspicious transactions but also reduces the incidence of false declines.
  • Employ Advanced Analytical Tools: Employing advanced analytical tools that utilize machine learning and behavioral analytics can help in understanding the patterns and tactics used by fraudsters. These tools analyze vast amounts of data to identify anomalies that signify fraudulent activities, adapting to new threats as they arise.
  • Continuous Validation of Sessions: Every session, not just the initial login or transaction attempt, should be continuously validated. This approach helps in detecting and mitigating session hijacking and replay attacks where fraudsters attempt to use stolen session data.
  • Multi-Factor Authentication (MFA): Enhancing security measures with MFA can significantly reduce the risk of unauthorized account access. By requiring additional verification, merchants can ensure that even if login data is compromised, the information alone is not enough to gain account access. (However, be aware that some users might resist using MFA or creating complex passwords due to the perceived inconvenience these measures add to the login process).
  • Comprehensive User Behavior Profiling: By creating comprehensive profiles based on user behavior, and signals from both the server and client side, merchants can effectively spot deviations from the norm which often indicate fraud. This profiling should include analysis of login patterns, transaction behaviors, and device usage patterns.
  • Collaboration and Knowledge Sharing: Engaging in industry-wide collaborations can provide merchants with access to shared intelligence about emerging threats and known fraudsters. Organizations like the Merchant Risk Council are instrumental in fostering such collaborations.

The financial and reputational stakes associated with account fraud are too high to ignore. By understanding the trends and implementing a layered security approach, merchants can significantly reduce their vulnerability to these attacks. While we work to eliminate account fraud entirely, taking proactive steps can help businesses safeguard their assets and build a trustworthy relationship with their customers. In the battle against account fraud, knowledge and preparation are your best defenses.




About DataDome

DataDome’s bot and online fraud protection detects and mitigates attacks with unparalleled accuracy and zero compromise. Our machine learning solution analyzes 5 trillion signals per day to adapt to new threats in real time. Our 24/7 SOC protects enterprises' mobile apps, websites, and APIs from ATO, carding, credential stuffing, layer 7 DDoS, scraping, and more. A force multiplier for IT and security teams, DataDome is fully transparent, easy to deploy, and frictionless for consumers. Consistently ranked a top G2 Leader in Bot Detection & Mitigation, DataDome was also named a Strong Performer in the 2022 Forrester Wave: Bot Management, and has received widespread recognition for its market-leading detection and mitigation capabilities, including being the only bot detection & mitigation provider to rank on G2’s prestigious Best Security Products of 2024 list.




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