In today’s digital age, the importance of safeguarding your business checking account, debit cards, and credit cards from security threats can’t be overstated. Account takeover fraud poses a significant risk to your business, but by understanding what it is and implementing effective prevention strategies, you can protect your financial assets.
This article explores what account takeover fraud is, how it can impact your business, ways to detect and prevent it, and what to do if your account is compromised.
What is account takeover fraud?
Account takeover fraud occurs when cybercriminals gain unauthorized access to your accounts, allowing them to exploit your financial resources. Fraudsters can employ various methods—including phishing scams, spoofing sites, and the use of bots—to deceive you and acquire sensitive information. By familiarizing yourself with these techniques, like knowing how to recognize a phishing scam, you can proactively defend against account takeover attempts.
How account takeover can impact your business
Account takeover can have severe consequences for your business, potentially resulting in financial loss and damage to your brand’s reputation. Once fraudsters gain access to your business checking or credit card account, they can engage in activities like:
- Stealing and selling personal information
- Accessing other accounts connected to your business
- Opening fraudulent bank accounts or credit cards in your name
- Initiating unauthorized payments or transfers
- Making fraudulent purchases using your debit or credit card
Ecommerce businesses face unique challenges in the event of an account takeover. An attack on your ecommerce site can lead to a loss of customer trust, damage to your brand reputation, and an increased volume of transaction disputes or chargebacks. Customers don’t want to make purchases from a business if they’re afraid it may put their private information at risk. These consequences may also prompt your payment gateway company to impose higher credit card transaction fees, affecting your profitability in the short and long term.
Why account takeover fraud is difficult to detect
Account takeover fraud can be challenging to detect due to the sophisticated tactics employed by fraudsters. They may manipulate your account preferences to disable alerts and notifications, change your account password to lock you out, or gradually escalate their activities to avoid immediate detection. These tactics, combined with the evolving technology fraudsters use to obtain your sensitive data, make it imperative to remain vigilant and implement preventive measures.
4 tips for account takeover prevention
1. Protect your passwords
Safeguard your accounts by using strong, unique passwords across different sites and accounts. Consider using passphrases instead of simple passwords, and store them securely using a reputable password manager.
2. Use multi-factor authentication
Enhance your account security by enabling multi-factor authentication. This additional layer of protection requires a one-time passcode, face recognition, or fingerprint authentication to access your accounts—in addition to your password. Multi-factor authentication significantly reduces the risk of unauthorized access even if your password is compromised.
3. Know what to look for
Familiarize yourself with the warning signs of phishing scams and other cyber attacks. Be cautious when clicking on links, particularly in emails or messages from unfamiliar sources. Take the time to verify the legitimacy of communication and scrutinize the websites you visit to avoid falling victim to fraudulent schemes. For example, always check the full sender address on unsolicited emails you receive. Often, hackers will send an email from a fraudulent domain that looks almost identical to one you trust.
4. Set up activity alerts
Regularly monitor your account activity and set up activity alerts whenever possible. While some accounts may automatically notify you of suspicious activity, it’s important to proactively monitor your accounts for any signs of unauthorized access. Activity alerts will help you stay on top of who has access to your account and promptly identify potential security threats.
How to handle an account takeover
If your account has been compromised, it’s crucial to act swiftly and minimize the potential damage. Here are three steps to take as soon as you find out there’s been unauthorized activity on your account.
1. Report the fraud
Contact your bank or credit card company immediately to report the account compromise. Most financial institutions offer dedicated channels to report fraudulent activity. Use these resources to inform them about the situation and take appropriate measures, like locking your credit or debit cards via your mobile app or account dashboard.
2. Freeze your business credit
Protect your business further by contacting the three major business credit bureaus—Dun & Bradstreet, Experian, and Equifax—and request a freeze on your business credit. Freezing your credit prevents fraudsters from opening new credit accounts in your business’ name.
3. Check other accounts
Review your other accounts to ensure you don’t use the compromised password elsewhere. If any accounts share the compromised password, change them immediately. Additionally, consider setting up account alerts for these accounts to monitor activity closely and detect any suspicious actions promptly.
Account takeover fraud presents a significant threat to businesses, but you can effectively prevent and handle compromised accounts with the proper knowledge and preparation. Protect your accounts with robust and unique passwords, add an extra layer of security with multi-factor authentication, learn more about phishing scams and cyber attacks, and set up activity alerts to monitor account access. In the unfortunate event of an account compromise, report the fraud immediately, freeze your business credit, and ensure the security of your other accounts.
Follow these tips and establish company guidelines for how to avoid and deal with fraud so you and your team can run your business with confidence.
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