Credential Theft: The Silent Gateway to Fraud

With billions of credentials circulating on the dark web, stolen logins are reshaping the fraud landscape.

In June 2025, cybersecurity researchers at Cybernews uncovered a gigantic credential leak that exposed 16 billion login credentials across 30 separate databases. The dataset appears to come from a mix of infostealer logs, credential-stuffing compilations, and repackaged old leaks. It was the largest breach on record.

Unfortunately, while the scale is unusual, the incident itself is not. The number of people affected by data breaches doubled globally in 2023 compared to the previous year. Infosecurity Magazine also reports that 1.8 billion credentials were stolen in the first half of 2025, an increase of more than 800% compared to the previous six months.

Let’s take a closer look at the causes and consequences of credential theft, a silent gateway to modern fraud.

Credential Theft: Definition

Credential theft occurs when attackers steal usernames, passwords, or other authentication data to gain unauthorized access to systems or accounts. It is one of the most common entry points for cyberattacks, often leading to data breaches, financial fraud, and identity compromise.

The scale of the problem is enormous. One study found that nearly 83% of Americans have had at least one online account exposed in a data breach, illustrating how frequently attackers gain access to sensitive information.

The primary motivation behind credential theft is financial. According to Verizon’s 2025 Data Breach Investigations Report, 90% of incidents in the Financial and Insurance sector were driven by financial gain. Stolen credentials give attackers a fast and effective way to access target environments, bypassing traditional controls and accelerating the path to fraud, data theft, or account compromise.

How Attackers Steal Credentials

Attackers use a wide range of techniques to steal credentials and other sensitive data. With the rise of AI, these methods have become even more accessible and convincing—from highly realistic phishing messages to AI-generated malware and fraud-as-a-service tools that lower the barrier to entry. As a result, stealing credentials has become a low-effort, high-reward tactic for cybercriminals.

Here are the most common ways attackers steal credentials:

Phishing

Phishing is one of the most common tactics attackers use to trick people into revealing their credentials. Fraudsters send deceptive emails or messages that mimic a trusted brand, authority, or even someone the victim knows. When the recipient clicks the link, they’re taken to a fake website designed to look legitimate and prompted to enter their login details. By doing so, the victim unknowingly hands their credentials directly to the attackers.

Social Engineering

Social engineering uses psychological manipulation to trick people into revealing sensitive information, including their login credentials. While phishing is one example, attackers also use phone impersonation, fake support calls, and message-based scams to pressure victims into sharing passwords, verification codes, or other authentication details. Instead of breaking into systems, fraudsters simply convince the victim to hand over their credentials willingly.

Malware

Many types of malware are specifically engineered to steal credentials. Infostealers, for example, are designed to gather sensitive information from infected devices and send it directly to the attacker. Remote access trojans (RATs) can also capture credentials. Out of more than one million malware samples examined in 2024, researchers found that one in four was built specifically for credential theft.

These tools use covert techniques such as:

• Keylogging – recording every keystroke the user types, including usernames, passwords, and security answers.
• Form grabbing – capturing data entered into web forms before it’s encrypted and sent, making it especially effective on banking login pages.
• Screen scraping – taking screenshots of the user’s display, often triggered when a banking site or app is opened.
• Clipboard monitoring – collecting copied data, such as passwords or account numbers.
• Credential harvesting – extracting stored browser passwords, cookies, or autofill data.

Man-in-the-Middle Attacks

A man-in-the-middle (MitM) attack occurs when an attacker secretly intercepts communication between a user and a legitimate service. In credential-theft scenarios, the attacker positions themselves between the victim and the login page. As the user enters their username, password, or MFA codes, the attacker captures them in real time and can even relay the session to the legitimate website to avoid raising suspicion.

Consequences: Why Credential Theft Is a Growing Threat

Stolen credentials are a highly valuable asset that is actively monetized on the dark web. BitSight reports that “the cost of bank login credentials average $25, full credit card details can sell for $12–20, and you can even buy enough sensitive information to steal a person’s identity for $1,275.” This steady demand fuels the persistence of credential theft as a lucrative criminal enterprise.

In any case, stolen credentials often end up being used in fraud attacks.

Data Breaches

According to Verizon’s 2025 Data Breach Investigation Report, stolen credentials were the root cause of one in five (22%) of data breaches in 2024. This highlights the cunning nature of credential theft attacks where stolen credentials power data breaches leading to more stolen credentials.

Account Takeover

Using stolen credentials in account takeovers is one of the most common scenarios. In the banking environment especially, account takeovers open paths to funneling money, accessing sensitive information, and committing identity theft.

Business Email Compromise

Business Email Compromise (BEC) attacks frequently begin with stolen email credentials. Once inside a corporate mailbox, attackers can monitor communication patterns, study approval workflows, and insert fraudulent payment instructions at precisely the right moment. Because the email comes from a legitimate account, these attacks are extremely convincing and often bypass traditional fraud controls.

Identity Theft and Impersonation

Stolen credentials can also be used for short-lived but high-impact identity theft. With access to real accounts, attackers can retrieve sensitive information, reset security settings, or initiate fraudulent applications before the victim notices anything unusual. Even though the window of exploitation is limited, credential-based impersonation is highly effective because the activity appears legitimate at first glance, allowing fraudsters to extract maximum value in a short time.

Synthetic Identity Fraud

Credential theft can also indirectly support synthetic identity schemes. By accessing real accounts, attackers can gather personal details that make fabricated identities more convincing. Compromised accounts may also be reused to bypass verification checks or serve as mule endpoints, helping synthetic profiles operate more credibly and at greater scale.

Credential Stuffing

Credential stuffing refers to the automated use of stolen username–password pairs across multiple websites to find accounts where users have reused the same login details. This tactic exploits the widespread habit of password reuse, making it easy for attackers to compromise accounts without breaching the underlying systems. According to Security.org, more than two in three Americans reuse the same passwords across multiple accounts.

How Credential Theft Impacts Businesses and Individuals

For individuals, credential theft can immediately result in unauthorized transactions, fraudulent payments, or purchases made without their consent.

For businesses, the impact extends even further. Compromised credentials can provide attackers with access to internal systems, increasing the risk of data breaches, regulatory exposure, operational disruption, and long-term reputational harm.

From a banking and fraud risk perspective, credential theft is far more than an entry point. It is a systemic threat that fundamentally reshapes the risk landscape. Once attackers gain access using valid credentials, they can operate inside the institution’s trusted perimeter, making fraudulent behavior appear indistinguishable from a legitimate customer’s actions. This creates several institutional challenges:

• A surge in complex account takeover (ATO) activity that bypasses traditional authentication and overwhelms fraud-monitoring teams.
• Increased financial losses, not only from unauthorized transfers but also from reimbursement obligations, dispute handling, and rising operational overhead.
• Higher friction for legitimate customers, as banks introduce additional authentication steps to compensate for the uncertainty introduced by credential compromise.
• Escalating compliance and regulatory exposure, especially under frameworks like PSD2/PSR, DORA, and global breach-reporting rules that demand timely detection, reporting, and remediation.
• Expanded attack surface inside the digital bank, as authenticated attackers can access additional features, services, or connected channels that extend the impact of a single compromised login.
• Significant reputational damage, as customers often perceive credential-based fraud as a bank failure, regardless of where the compromise occurred.

In short, credential theft undermines the very foundation of digital banking security: identity. When identity is compromised, every part of the fraud lifecycle becomes harder to detect, investigate, and contain. This is why credential theft remains one of the most consequential and persistent threats facing financial institutions today.

Zooming out to the wider societal impact, as credential theft becomes more common, people lose their sense of security and confidence in online banking, government portals, healthcare systems, and digital commerce. Trust, the cornerstone of digital transformation, weakens, slowing the adoption of services that depend on secure digital identities.

How to Detect and Prevent Stolen Credentials

Protecting against credential theft requires a layered approach. Some measures help reduce low-level risk, while others are essential for detecting and stopping the far more complex attacks.

Multi-Factor Authentication (MFA)

MFA remains a valuable first step in strengthening login security and reducing the risk of simple credential-based attacks. However, fraudsters increasingly bypass MFA through social engineering, session hijacking, and real-time phishing kits, making it necessary but no longer sufficient on its own.

Education and Awareness

Customer and employee education can help reduce exposure to phishing and other social engineering tactics used for credential theft, but its impact is often short-lived. Fraudsters exploit urgency, fear, and authority in ways that override what customers believe they “know,” especially in high-pressure moments.

Monitoring and Detection Solutions

While MFA and user education remain important, the realities of modern fraud require institutions to assume that credentials will be compromised.

For financial institutions, the most effective defense is the ability to detect compromised credentials while they are being used. Continuous monitoring of behavioral patterns, device signals, session anomalies, and transaction context allows banks to distinguish genuine customers from attackers—even when credentials appear valid.

This shift from static authentication to continuous risk evaluation is essential in a world where credential theft is almost inevitable.

Disruption of Credential-Based Fraud

ThreatMark applies a fraud disruption approach to credential-based attacks by intervening long before traditional controls even activate. It begins at the earliest stage of the credential-based fraud lifecycle, identifying and disrupting credential-harvesting infrastructure. By neutralizing these campaigns upstream, ThreatMark reduces the volume of stolen credentials that ever reach attackers’ hands.

If stolen credentials are still used, ThreatMark takes over in-session. Instead of relying on passwords, devices, or static authentication alone, it evaluates how a user behaves throughout the entire session. Behavioral patterns, device context, and transaction monitoring work together to reveal when the person behind the login is not the genuine customer, allowing banks to disrupt credential-based attacks even when every conventional check is passed.

Early Mitigation of Credential-Harvesting Infrastructure

Through the ThreatMark helps stop credential theft before it happens by detecting and disrupting fraudulent infrastructure such as phishing sites, fake login pages, and impersonation domains.

By identifying these malicious sites early and triggering rapid takedown, ThreatMark prevents attackers from harvesting credentials in the first place. This “shift-left” approach gives banks visibility into credential-stealing campaigns targeting their customers, allowing them to neutralize threats at the source.

Behavioral Biometrics

The Behavioral Intelligence Platform analyzes keystrokes, navigation habits, device signals, and session context to build a unique behavioral profile for each customer.

When someone logs in with valid credentials but behaves differently from the legitimate account user, the system flags the anomaly as a potential account takeover. This continuous, real-time monitoring—from login to logout—uses AI models trained to distinguish genuine customers from fraudsters operating the same account.

Transaction Monitoring

ThreatMark’s transaction monitoring evaluates payment behavior against each user’s historical patterns, including amount, timing, frequency, and context. This ensures that suspicious actions following a compromised login are flagged instantly, reducing the window of opportunity for attackers to move funds or escalate access.

Device and Environmental Anomalies

When stolen credentials are used, ThreatMark identifies deviations such as access from an unfamiliar device, login from a new country, region, or time zone, use of VPN, TOR, or PROXY for anonymization, different operating system or platform, or signs of screen sharing and remote access tools.

Adapting to a New Era of Credential Risk

If 2025 made anything clear, it’s that credential theft isn’t going anywhere. It continues to evolve, feeding on social engineering, data breaches, and the simple reality that authentication alone is no longer the barrier it once was. For financial institutions, this creates an uncomfortable truth: trust can be lost long before anyone notices the first warning sign.

Seeing what’s really happening behind a login becomes essential. Behavioral intelligence and real-time transaction monitoring offer banks something they haven’t had before: the ability to recognize compromised credentials the moment they’re misused, and to intervene before the damage is done.

Whether this shift from static controls to continuous insight becomes the new standard, or simply the next step in a much longer journey, remains to be seen. But the institutions that lean into it now may be the ones best prepared for whatever comes next.

Learn more about behavioral intelligence

Credential Theft FAQs

What is credential theft?

Credential theft occurs when attackers steal a person’s login information (usernames, passwords, or authentication tokens) to gain access to accounts or systems. It often happens through phishing, malware, social engineering, or data breaches, and is one of the most common starting points for fraud and account takeover.

What is the difference between credential theft and credential leak?

Credential theft happens when attackers intentionally steal login information through malicious tactics such as phishing, malware, or social engineering. The stolen credentials may be used directly for fraud or sold to others on the dark web.

A credential leak (or breach) refers to credentials being exposed (not only through attacks, but also through misconfigurations, accidental disclosures, or system vulnerabilities) without an attacker actively targeting a specific user.

What is an example of credential theft?

A common example of credential theft is a phishing attack where a victim receives a fake email from what appears to be their bank, clicks a link to a fraudulent login page, and enters their username and password. The attacker then captures these credentials and uses them to access the victim’s real account.

What are credential-based attacks?

Credential-based attacks are attacks in which cybercriminals use stolen or compromised login information (usernames, passwords, or authentication tokens) to access accounts or systems. Because the attacker signs in with valid credentials, the activity often appears legitimate, enabling fraud techniques such as account takeover, unauthorized transactions, and data breaches.