You’ve enabled multi-factor authentication (MFA) on your account. You may think you’re secure. And you’re definitely more secure than without MFA. But that doesn’t mean fraudsters can’t get into your account. Increasingly, they use one-time password (OTP) bots to break into accounts that people think are secure.

OTP bots can cause significant damage both to individuals and to businesses. This article will explain what OTP bots are, how they work, and how you can protect both yourself and your business against them.

What are OTP bots?

OTP bots are sophisticated automated programs that are designed to intercept and steal one-time authentication codes. They exploit the trust that people place in MFA systems, tricking them into sharing temporary verification codes sent via email, SMS, or authentication apps. Once an OTP bot obtains these codes, it can bypass security measures and gain unauthorized access to protected accounts.

How do OTP bots work?

Some OTP bots use a combination of social engineering tactics and automated technology, while others are entirely automated. Here’s a typical scenario:

1. Credential Acquisition: An attacker gets a victim’s login credentials through methods like phishing, data breaches, or credential stuffing attacks.
2. Automated Login Attempt: The hacker deploys an OTP bot that uses these credentials to initiate a login attempt on the target website or application.
3. OTP Request: This login attempt automatically triggers the website to send an OTP to the victim’s registered phone number via SMS.
4. SMS Interception: The OTP bot uses advanced SMS interception techniques (such as exploiting SS7 vulnerabilities or using malware on the victim’s device) to capture the OTP message before it reaches the victim.
5. Automated OTP Entry: The bot immediately enters the intercepted OTP on the website or application.
6. Unauthorized Access: With the correct OTP entered, the bot gains unauthorized access to the victim’s account. This entire process happens in seconds.

Because this entire process is automated, attackers can bypass MFA security at scale and potentially compromise multiple user accounts in a short span of time.

Types of OTP Bots

• Voice Bots: These use automated voice calls to impersonate genuine people from genuine organizations, who ask for your OTP. Voice bots often use sophisticated voice synthesis technology to sound human-like, making it difficult for victims to distinguish them from real customer service representatives.
• SMS Bots: These send text messages mimicking official communications to phish for OTPs. SMS bots often use number spoofing techniques to appear as if the message is coming from a legitimate source, such as a bank or government agency. Alternatively, SMS bots use weaknesses in mobile networks to intercept OTP codes sent via SMS.
• App-based Bots: These target authentication apps, tricking users into revealing codes generated within the app. They may exploit vulnerabilities in the app’s design or use social engineering tactics to convince users to manually input their app-generated codes into a fraudulent interface.
• Email Phishing Bots: These send convincing emails to lure users into providing OTPs. These bots often use advanced techniques like domain spoofing and personalized content to make their emails appear genuine and increase the likelihood of user engagement.
• Social Media Bots: These operate on social platforms, often exploiting public information to make their requests more convincing. They may create fake profiles that mimic trusted entities or friends, using gathered personal information to add credibility to their OTP requests.
• Browser-based Bots: These inject malicious scripts into web browsers to intercept OTPs entered by users. They can modify the appearance of legitimate websites in real-time, tricking users into entering their OTPs directly into the attacker’s system.
• API-exploiting Bots: These target vulnerabilities in application programming interfaces (APIs) to intercept OTPs during transmission. They may exploit poorly secured API endpoints to capture OTPs before they reach the intended verification system.

How Cybercriminals Use OTP Bots

Cybercriminals use OTP bots to exploit the trust people place in MFA security. Most commonly, OTP bots are used for account takeover attacks. A successful OTP bot attack gives a criminal access to a user account, after which they can lock the rightful owner out and use the account for malicious activities like identity theft or financial fraud.

If an OTP bot gains access to someone’s financial account, it will most certainly be used to make unauthorized transactions or to transfer funds. These attacks can be particularly devastating for individuals and businesses alike, as it can lead to significant financial losses before the victim becomes aware of the breach.

OTP bots are also used for corporate data breaches. They target employee accounts, especially those with elevated privileges, and bypass security measures that often protect sensitive corporate data. This is how hackers gain access to valuable information like customer data, intellectual property, or confidential business strategies.

E-commerce fraud is another area where OTP bots are increasingly used to access online shopping accounts, make unauthorized purchases, or steal stored payment information. This results in financial losses for the victims, but also damages the reputation of the e-commerce platform in question.

Why MFA Is Vulnerable to OTP Bots

While MFA adds an extra layer of security, it’s not impenetrable to OTP bot attacks for several reasons:

1. Human Error: OTP bots exploit the human element and use social engineering to trick users into willingly providing their codes. This is by far the biggest reason why MFA is still vulnerable to OTP bots.
2. Familiarity: Users are accustomed to receiving and entering OTPs, which makes them less likely to question a request.
3. SMS Vulnerabilities: SMS-based OTPs can be intercepted through SIM swapping or SS7 protocol exploits.

For instance, an attacker might use an OTP bot to call a user, claiming to be from their bank’s fraud department. The bot creates a false sense of urgency about a suspicious transaction, prompting the user to share their OTP and unknowingly grant the attacker access to their account.

How to Detect and Mitigate OTP Bot Threats

To protect against OTP bots, organizations and individuals should:

1. Implement Advanced MFA Authentication: Use app-based authenticators or hardware tokens instead of SMS-based OTPs that are inherently less secure.
2. Educate Users: Regularly train employees and customers about OTP bot tactics and the importance of never sharing OTPs to anyone.
3. Employ Behavioral Analytics: Use AI-powered systems to detect unusual patterns in authentication attempts.
4. Use Robust Bot Management: Advanced bot detection and prevention systems can identify and block malicious bot activity before it reaches users.
5. Use Time-based OTPs: Short-lived OTPs reduce the window of opportunity for attackers.
6. Implement Additional Verification: For high-risk actions, require additional verification steps beyond OTPs, like biometric security or push notifications.
7. Monitor for Suspicious Activity: Regularly audit authentication logs and implement real-time monitoring for unusual patterns.

DataDome can play a crucial role in mitigating OTP bot threats. Its advanced bot management solution uses machine learning and real-time threat intelligence to detect and block malicious bot activity across websites, mobile apps, and APIs. By preventing OTP bots from reaching your users in the first place, DataDome significantly reduces the risk of successful attacks.

According to the DataDome Global Bot Report, a staggering 65.2% of websites tested were completely unprotected against simple bot attacks. This statistic underscores the urgent need for robust bot protection measures, especially when it comes to sophisticated threats like OTP bots.

By implementing a multi-layered approach that combines user education, advanced authentication methods, and powerful bot management solutions like DataDome, you can significantly reduce their vulnerability to OTP bot attacks and prevent bots from crawling your site.