How to Protect Your Business Against Credential Stuffing Attacks

Credential stuffing has become one of the most widespread and cost-effective methods for cybercriminals to breach online accounts. While the success rate of these attacks is low, typically ranging from 0.2% to 2%, their frequency is rising. Fraudsters continue to exploit stolen credentials from data breaches, launching automated attacks across multiple platforms in search of reused usernames and passwords. This practice is particularly prevalent in industries such as e-commerce, finance, and digital services, where customers tend to use the same credentials across several accounts.

Despite its relatively low success rate, credential stuffing remains a favorite among threat actors because it requires minimal technical knowledge and can be executed on a large scale. The real damage lies not only in the stolen funds but in the erosion of customer trust and the potential regulatory consequences businesses may face when they fail to safeguard user data. The increased frequency of these attacks underscores the importance of implementing robust defense mechanisms to shield both businesses and their customers from this growing threat.

The role of data leaks in credential stuffing attacks

Data breaches continue to be a significant driver of credential stuffing attempts. When personal information, such as usernames and passwords, is exposed in a breach, cybercriminals often use these stolen credentials in bulk across various websites and platforms.

A recent example illustrates the scale of the problem: 16 billion passwords, including those from major platforms like Apple, Facebook, and Google, were leaked, fueling a massive surge in credential stuffing attempts.

These breaches highlight a critical vulnerability in businesses that rely on traditional authentication methods. Cybercriminals can exploit users’ habits of reusing passwords across multiple sites, amplifying the risk of unauthorized account access. For instance, a Reuters report detailed how hackers used credential stuffing techniques to target customers by attempting to access accounts with stolen usernames and passwords from a previous breach, in the hope that users had reused these credentials across multiple accounts. This type of attack is particularly effective when a large amount of user data is available.

Each time a major data leak occurs, businesses see an increase in credential stuffing attacks, as attackers know that many users will not change their credentials after a breach. For example, AustralianSuper, a large Australian superannuation fund, confirmed that fraudsters used credential stuffing to steal $500,000 from their members’ accounts. This kind of attack can have devastating financial and reputational consequences for businesses.

What is credential stuffing?

Credential stuffing is a form of cyberattack where attackers use stolen username and password combinations, often obtained from data breaches, to gain unauthorized access to multiple online accounts. This technique relies on the assumption that many users reuse the same credentials across multiple sites. The methods of fraudsters have evolved to a point where they can easily automate the process with bots. Attackers then attempt to log into a wide variety of platforms.

Credential stuffing attacks use credential pairs (a username and password) and attempt to use them on several different websites or applications. The attack often targets industries that store sensitive data, such as banking, e-commerce, and SaaS platforms. However, even sectors traditionally viewed as low-risk, such as supermarket loyalty programs, are now being targeted. An example of this is the recent surge in fraud involving Nectar points, where fraudsters used credential stuffing to steal loyalty points from customers of Sainsbury’s, a UK supermarket chain. This highlights the far-reaching consequences of credential stuffing, affecting businesses of all sizes and industries.

Credential stuffing attacks are not just about financial loss; they often focus on stealing customer loyalty points, gaining access to payment information, or hijacking accounts for identity theft. Fraudsters know that payment data is highly valuable, making platforms that store this information particularly attractive targets for these types of attacks.

Types of fraud and the impact of credential stuffing attacks

Credential stuffing attacks can lead to several forms of fraud, each with its own impact on businesses and customers. Below are some of the most common types of fraud that credential stuffing facilitates, along with the associated damages:

Account takeover (ATO)

Definition: account takeover fraud occurs when a fraudster uses stolen credentials to access a victim’s account, often with malicious intent such as making unauthorized purchases, transferring funds, or stealing sensitive information.

Common targets:
Banking and fintech platforms: fraudsters can use credential stuffing to access personal accounts, make unauthorized transactions, or apply for credit in the victim's name.

• Buy Now, Pay Later (BNPL) services: attackers exploit weak security settings in BNPL services to gain access to user accounts and make purchases on credit, leaving the victim with financial damage.
• E-commerce sites: fraudsters can place orders using a victim’s stored payment details, often resulting in significant financial loss for businesses.
  • Example
    In a typical BNPL fraud scenario, attackers use credential stuffing to access a victim’s BNPL account. Once in, they use the victim’s credit to make purchases, leaving them with financial damage and leaving the business to handle chargebacks and disputes.

Stolen passkeys

Definition: passkeys, a passwordless authentication method, have emerged as a promising way to reduce the effectiveness of credential stuffing attacks. However, even passkeys can be compromised if attackers gain access to the user’s device or authentication system.

Impact:

• Reduced attack surface: while passkeys help mitigate credential stuffing, they are still evolving and can be susceptible to theft, particularly if fraudsters can exploit vulnerabilities in the system or intercept authentication processes.

Linking to identity theft: credential stuffing can extend beyond account access into identity theft, where stolen passkeys, combined with personal information, allow fraudsters to impersonate individuals and carry out fraudulent activities in their name.

Identity theft

Definition: When attackers gain unauthorized access to an individual’s account through credential stuffing, they can use the stolen identity for broader fraudulent activities, including financial theft, tax fraud, and opening new accounts in the victim's name.

Linking ATO to identity theft:
While account takeover involves direct fraud within a specific account, identity theft often involves using the stolen credentials to create a new, fraudulent identity, which can be used to open bank accounts, apply for loans, or commit tax fraud.

Example: in some cases, credential stuffing can be used to access sensitive accounts, which are then leveraged for identity theft, particularly when fraudsters gather enough information to bypass additional security checks.

Regulatory risks

As credential stuffing attacks rise, businesses face increasing regulatory scrutiny. Failing to protect customer data adequately can lead to hefty fines under laws like the GDPR in Europe and the Data Protection Act 2018 in the UK. Beyond financial penalties, businesses risk long-term reputational damage and customer trust erosion, with regulatory bodies potentially imposing penalties for non-compliance.

Damage caused by credential stuffing

Credential stuffing attacks can result in significant financial and reputational damage. Direct costs include chargebacks and the expense of mitigating the attack, while long-term impacts involve increased cybersecurity investment. The reputational damage can cause customer attrition, especially in data-sensitive industries, while operational disruptions can further harm business operations and customer satisfaction.

Key countermeasures for credential stuffing

To combat credential stuffing effectively, businesses must implement a combination of proactive measures. Here are the key countermeasures that can help reduce the risk and impact of credential stuffing attacks:

• Advanced fraud detection
  Implement fraud detection systems to identify abnormal login patterns, such as an unusually high number of failed logins, login attempts from multiple countries in a short time, or use of previously compromised credentials.
• Behavioral biometrics
  Legitimate users can be identified via behavioral signals such as keystroke dynamics, mouse movement patterns, scrolling behavior, and interaction timing to identify legitimate users. Trustfull uses these unique signals to build user profiles and detect anomalies that could indicate fraudulent activity.
• IP reputation analysis
  Analyze the reputation of IP addresses used to attempt logins. This helps flag suspicious logins, especially those coming from VPNs, proxy servers, or TOR networks, which are often used to mask the attacker’s true location and identity.
• Device Fingerprinting
  Use device fingerprinting to identify fraudulent logins by cross-referencing device characteristics like browser settings, screen resolution, and operating system details. Trustfull uses this data to flag setups that deviate from known patterns, helping to prevent credential stuffing attacks.
• Graph and network analysis
  Utilize the Trustfull Graph to detect complex login patterns, such as multiple attempts from the same IP address in quick succession. This can identify bot-driven credential stuffing attempts and block or flag them for further inspection.
• Bot mitigation
  Employ bot detection systems that spot the difference between good and bad bots. Blocking all bot traffic can be detrimental, as legitimate bots, like search engine crawlers, are crucial for business. Trustfull’s solution focuses on blocking malicious bots while allowing good bots to operate freely.

These countermeasures work together to create a robust defense against credential stuffing attacks, making it harder for attackers to succeed in gaining unauthorized access to accounts.

Other types of defenses used to mitigate credential stuffing risks

Credential stuffing attacks can be significantly reduced with the right combination of defense mechanisms. While fraud detection systems and behavioral biometrics are crucial, additional methods can enhance protection even further. Here are some key defenses:

Heuristic analysis
Heuristic analysis uses predictive analytics to evaluate login patterns and cross-reference them with known hacking strategies. This approach helps to identify suspicious login attempts that may indicate credential stuffing. Trustfull’s login authentication system incorporates heuristic rules to detect unusual login behavior. With this system in place businesses can flag potentially malicious activity in real-time, preventing successful credential stuffing attacks before they happen.

Heuristic analysis is particularly valuable for identifying low-volume, high-value attacks where the fraudster attempts to access a limited number of accounts, but with potentially significant consequences. The combination of predictive models and real-time pattern matching is key to protecting users from credential stuffing.

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Multi-Factor Authentication (MFA) and CAPTCHA
MFA and CAPTCHAs are essential layers of defense that help ensure only legitimate users gain access to accounts. When a suspicious login attempt is detected, whether it's from an unfamiliar location or a new device, MFA and CAPTCHA should be triggered as "challenges" to verify the identity of the user. These challenges are particularly effective because, while fraudsters can automate credential stuffing attacks, they cannot easily bypass the additional authentication steps that MFA and CAPTCHA impose.

It's important to note that these challenges should be used across all types of platforms, not just in banking apps, but in any service where user accounts are accessed. Fraudsters continually evolve their tactics, trying to exploit existing accounts across various platforms, so businesses must implement these defenses universally to combat increasingly sophisticated attacks.

User education
Educating users about proper security practices is another essential layer of defense. Businesses should advise customers to create strong, unique passwords for every account. A key recommendation is to avoid reusing passwords across multiple platforms, a practice that continues to put users at risk despite widespread awareness.

Statistics show that a large portion of the population still reuses passwords, with recent surveys indicating that 59% of users (in this case, Gen Z users) admit to using the same password across multiple sites. Unique and strong passwords are often encouraged to reduce the likelihood of their credentials being compromised in a breach. It’s also advised to educate users on phishing attempts. This can prevent the initial leakage of login credentials.

Fighting credential stuffing attacks head on

Credential stuffing attacks continue to threaten businesses across various industries. However, thanks to advanced fraud prevention measures like behavioral biometrics, IP reputation analysis, and multi-layer authentication, organizations can minimize the risks and establish protection systems that help recognize advanced fraudster patterns.

Trustfull unlocks a range of solutions built around these patterns. The fraud prevention platform is designed to detect abnormal login patterns, block malicious bots, and monitor for suspicious behavior before it escalates into a full-fledged attack.

Connect with our fraud experts to discover new methods to improve your security posture and protect your customer data.

FAQs

What is credential stuffing?
Credential stuffing is a cyberattack where fraudsters use stolen username and password combinations to gain unauthorized access to multiple accounts. These attacks rely on the reuse of credentials across different platforms, making them a cost-effective and common method for cybercriminals.

‍How can businesses detect credential stuffing attacks in real time?
Businesses can detect credential stuffing attacks in real-time by keeping an eye out for unusual login patterns, such as multiple failed attempts from the same IP address or account. Implementing tools like behavioral biometrics and IP reputation analysis can help identify and block these attacks before they succeed.

What can I do to prevent my accounts from being targeted by credential stuffing?
To protect your accounts, use strong, unique passwords for each platform and enable multi-factor authentication (MFA). Regularly monitoring your accounts for suspicious activity and educating users on proper password practices can also significantly reduce the risk.

What’s the difference between credential stuffing and brute force attacks?
Credential stuffing involves using stolen credentials from data breaches to attempt logins, while brute force attacks rely on systematically trying many different combinations of passwords until the correct one is found. Credential stuffing is more efficient as it exploits the reuse of credentials, whereas brute force requires attempting numerous possible passwords.

How does credential stuffing facilitate account takeover?
Credential stuffing enables account takeover (ATO) by using stolen login credentials to access accounts. Once in, fraudsters can change account details, make unauthorized purchases, or steal sensitive information.

What’s the average success rate of credential stuffing attacks?
While the success rate of credential stuffing attacks typically ranges from 0.2% to 2%, the low success rate doesn't deter cybercriminals due to the large scale and minimal effort required to execute these attacks. Even a small percentage of success can lead to significant financial losses.