How to prevent account takeover fraud?

With the rapid digitisation of banking, shopping, and payments in India, cyber fraud has emerged as a critical concern for individuals and businesses alike. One of the most dangerous forms of cybercrime affecting Indian users today is account takeover (ATO) fraud. This occurs when a malicious actor gains unauthorised access to your online accounts—whether it is your bank, social media, or email—and uses it for fraudulent purposes.

ATO fraud can lead to direct financial losses, identity theft, reputational damage, and legal complications. According to the Reserve Bank of India (RBI), cyber fraud cases reported by scheduled commercial banks increased significantly in the financial year 2023, with digital payment frauds forming a major chunk of the incidents.

As India moves further towards a digital economy with UPI, net banking, and mobile wallets becoming the norm, the importance of being aware and protected from ATO fraud cannot be overstated. Whether you are a salaried individual, business owner, or student, understanding the nature, methods, and safeguards against account takeover is essential.

What is account takeover (ATO) fraud?

Account takeover fraud refers to a type of cybercrime where a fraudster gains unauthorised access to someone’s online account. Once access is secured, the attacker impersonates the account owner to carry out financial transactions, steal sensitive data, or commit further fraud. ATO fraud is commonly targeted at banking, e-commerce, social media, and payment service accounts.

In India, account takeover fraud has been on the rise with increasing digital dependency. According to the Indian Computer Emergency Response Team (CERT-In), more than 13.9 lakh cyber security incidents were reported in 2022. Many of these included phishing and credential-based attacks that often lead to account takeover.

Cybercriminals use a variety of techniques like phishing, malware, credential stuffing, and SIM swapping to hijack accounts. After taking over an account, they may change login credentials, transfer funds, place unauthorised orders, or even defraud the victim’s contacts.

The consequences of account takeover can be devastating. Victims often lose access to essential services, suffer financial losses, and face difficulty recovering their accounts. For businesses, it can also mean data breaches, loss of customer trust, and reputational harm.

ATO fraud thrives on user negligence, weak security practices, and lack of awareness. The rise in remote working, online shopping, and digital banking in India post-COVID-19 has made users even more vulnerable.

Understanding the tactics used in ATO and staying alert to warning signs is the first step to protecting oneself from this growing cyber threat.

Common methods used in account takeover attacks

Cybercriminals use several sophisticated methods to gain control over personal and financial accounts. Here are the most common techniques used in account takeover fraud:

• Phishing emails and SMS Fraudsters send fake emails or messages that appear to be from trusted sources like banks or government portals. Clicking on malicious links can lead to credential theft.
• Social engineering Attackers manipulate users into revealing confidential information by pretending to be customer support or official representatives.
• Credential stuffing When data from a previous breach is leaked online, attackers use automated tools to try the same username-password combinations on multiple sites, banking on people reusing credentials.
• Keyloggers and malware Malicious software installed through unsafe downloads or infected websites can record your keystrokes or capture your login data.
• Man-in-the-middle (MitM) attacks This occurs when an attacker intercepts data transmission between a user and a server, especially on unsecured public Wi-Fi networks.
• SIM swapping Fraudsters convince mobile operators to port your mobile number to their SIM, gaining access to OTPs and bank verification messages.
• Fake websites and apps Users are tricked into entering sensitive information on fake versions of official apps or websites.
• Browser hijacking Through malicious extensions or plug-ins, attackers redirect you to phishing sites or capture browser activity.
• Data breaches Large-scale corporate breaches leak usernames and passwords, which are then sold on the dark web and used in targeted ATO attempts.
• Mobile number spoofing Attackers spoof a known contact’s number and call the victim to gather sensitive details.

Understanding these methods is key to strengthening personal cyber hygiene and defending against account takeover fraud in everyday life.

Signs and indicators of account takeover fraud

Being able to identify early warning signs of ATO fraud can help you respond quickly and minimise damage. Watch out for the following red flags:

• Unusual login notifications Receiving OTPs or alerts for logins you did not initiate may indicate someone is trying to access your account.
• Locked or disabled accounts If your account is unexpectedly locked or disabled, it could be due to suspicious activity or tampering.
• Changes in account details Unauthorised changes in email address, phone number, or password settings are common signs of account compromise.
• Unexpected transaction alerts Notifications about purchases, fund transfers, or withdrawals you did not authorise point directly to an ATO incident.
• Multiple login attempts Emails or app alerts about failed login attempts may suggest that someone is trying to break into your account.
• Missing emails or messages If your inbox suddenly seems empty or you are not receiving OTPs and alerts, your account may have been hijacked.
• Strange activity on social media Posts, DMs, or stories you did not create can indicate unauthorised access to your social accounts.
• Friends or contacts receiving unusual messages If your contacts complain about messages or payment requests from your account, you may have been compromised.
• Device or location mismatches Login activity from unrecognised devices or locations is a strong indicator of intrusion.
• Loss of mobile network If your mobile suddenly loses signal while the SIM is in place, a SIM swap attack may be in progress.

Early detection of these signs can help you take swift action to secure your account and limit losses.

Preventive measures to protect against account takeover

Protecting yourself from account takeover begins with good digital hygiene and proactive security measures. Here are practical steps you can take:

• Enable two-factor authentication (2FA) Always activate 2FA on banking, email, and social media accounts for an extra layer of security.
• Use strong, unique passwords Avoid reusing passwords. Use complex combinations and change them regularly. Password managers like Bitwarden or LastPass can help.
• Verify website URLs Always check that you are on a secure, legitimate website before entering any credentials.
• Be cautious with links and attachments Do not click on links or open attachments in suspicious emails or messages. Phishing scams often rely on this.
• Keep devices updated Regularly update your operating system, apps, and antivirus software to patch vulnerabilities.
• Install a reliable antivirus Use reputed security software to detect and remove malware, spyware, and keyloggers.
• Avoid public Wi-Fi for sensitive transactions Public networks can be easily compromised. Use a VPN if you must access sensitive accounts on such networks.
• Monitor bank statements and credit reports Regularly review your financial records for unauthorised activity.
• Limit personal data shared online Reduce the amount of personal information you share on public forums and social media.
• Secure your SIM Set a PIN on your SIM card and inform your mobile provider if your phone is lost or you notice network issues.
• Use biometric authentication Wherever possible, enable fingerprint or face ID for app-level protection.
• Educate family and employees Spread awareness about ATO risks and preventive practices among those around you.

Taking preventive measures not only protects your own identity and finances but also contributes to a safer digital ecosystem in India.

Legal recourse and steps to take if victimised

If you become a victim of account takeover fraud, taking swift and structured action is essential. Here is what you must do:

1. Report the incident immediately
Inform your bank, service provider, or platform as soon as you notice any suspicious activity. Most institutions in India have 24x7 helplines and grievance cells to handle such issues.

2. File a complaint with the cyber cell Register a complaint at your nearest police station or cybercrime cell. You can also file online at the Government of India’s National Cyber Crime Reporting Portal.

3. Freeze your accounts
Request your bank or financial service provider to freeze accounts temporarily to prevent further transactions.

4. Change all passwords and credentials
Update login details across all affected and linked accounts to block further access.

5. Monitor your accounts closely
Keep a close watch on all your bank statements, credit cards, and email activity for any continued fraud.

6. Secure your devices
Run antivirus and malware checks on all devices used to access the compromised account.

7. Retain all evidence
Keep records of unauthorised transactions, login alerts, messages, and emails to support your complaint.

8. Apply for cyber insurance claims
If you have cyber insurance through platforms like Bajaj Finance Insurance Mall, contact the insurer for claims on financial loss recovery.

9. Follow up regularly
Keep track of your complaint status with both law enforcement and financial institutions.

Legal support and prompt action can go a long way in recovering losses and preventing recurrence.

Role of financial institutions in detecting and preventing ATO

Financial institutions in India play a critical role in both detecting and preventing account takeover fraud. With digital payments gaining momentum through UPI, IMPS, and net banking, the burden of cyber protection has also increased on banks and NBFCs.

• Monitoring systemsBanks use AI and ML-driven fraud detection tools to monitor unusual transaction patterns. Transactions that do not match a user’s spending history are flagged for manual review.
• Real-time alerts and OTPs Most institutions provide SMS/email alerts and OTP verification for all key transactions. These serve as early warnings and prevent fraudulent authorisations.
• Multi-factor authentication (MFA) Banks mandate MFA for logins, password changes, and fund transfers, significantly reducing ATO risks.
• Customer education programmes Institutions like SBI, HDFC, and ICICI regularly conduct awareness campaigns on phishing, SIM swaps, and safe banking practices.
• Grievance redressal RBI mandates that banks must resolve customer complaints on fraud within specific timelines, especially if the fraud is reported within 3 working days.
• Risk-based transaction blocks Unusual overseas transactions or large value transfers often trigger temporary account blocks for verification.
• Cybersecurity audits As per RBI’s guidelines, banks must undergo regular IT and cybersecurity audits to stay compliant and secure.

The effectiveness of financial institutions in preventing ATO fraud depends on the cooperation between technology, customer awareness, and regulatory compliance.

Guidelines for recovering from account takeover incidents

Recovering from an account takeover can be difficult, but a step-by-step approach can help regain control and prevent future incidents:

• Secure all your accounts immediately Start by changing passwords and enabling two-factor authentication on all your online accounts.
• Inform your bank and service providers Let them know about the breach and follow their guidance to freeze or recover your accounts.
• Report the fraud to the cybercrime cell Lodge a complaint atcybercrime.gov.in or visit your local police station.
• Perform a full system scan Use updated antivirus tools to check all your devices for malware or spyware.
• Monitor your credit report Use platforms like CIBIL to check for new loans or credit cards taken in your name.
• Notify contacts Inform friends, family, or business partners to disregard suspicious messages from your accounts.
• Check linked apps and authorisations Remove unknown devices or applications from your account settings.
• Retain all communication Keep emails, SMS, and screenshots of fraudulent activity for reference and legal use.
• Apply for a new SIM if required If you suspect a SIM swap, ask your provider to deactivate the old SIM and issue a new one.
• Update recovery information Make sure your recovery phone number and email are up to date across all major accounts.

Conclusion

Account takeover fraud is one of the fastest-growing threats in India’s digital ecosystem. As more individuals and businesses move online, the scope and scale of this crime are expanding. From phishing and credential stuffing to SIM swapping, cybercriminals are using diverse methods to compromise personal and financial accounts.

By understanding what account takeover fraud is and how it operates, users can become better prepared to detect, prevent, and recover from such incidents. Financial institutions are also playing a proactive role, but ultimate security depends on informed, cautious, and tech-savvy users.

It is vital to remain vigilant, follow best practices, and explore security options such as cyber insurance available through platforms like Bajaj Finance Insurance Mall. By staying aware and adopting strong digital hygiene, Indian users can stay protected from the costly impact of account takeover fraud.