What is an OTP bot? How it works, risks, and prevention

One-Time Password (OTP) bots are automated scripts that trick users into delivering authentication codes to criminal actors.

The advent of inexpensive and readily available OTP bots has lowered the barrier for attackers to breach user accounts and access sensitive data. Unfortunately, many organizations still rely on SMS-based OTPs, which are vulnerable to social engineering and phishing attacks. Ironically, authentication tools designed to protect data may actually put it at risk.

This article will introduce the concepts behind OTP bots. We will explore types of bots and attack methods, discuss how OTP bots raise security risks, and suggest the next steps to secure your authentication portals.

What is an OTP bot?

A one-time password (OTP) is a single-use code commonly used in 2FA/MFA tools to enable user access. One-time passwords are unique and time-limited. This protects against credential theft attacks by requiring more than simple user name and password combinations.

An OTP bot is an automated script used by malicious actors to steal one-time passwords and compromise two-factor authentication (2FA) or multi-factor authentication (MFA) security. These bots use phishing techniques to deceive users into providing one-time passwords and enabling network access.

Attackers use several techniques to launch OTP bot attacks, including emails, voice phishing (vishing), and social engineering tactics. Attackers often use Telegram to share, sell, and coordinate the use of off-the-shelf OTP bot scripts.

How do OTP bots work?

OTP bot attacks blend automated bots and social engineering - an approach that is hard to detect. A typical OTP bot life cycle plays out something like this.

1. Preparation

The first step in an OTP bot attack establishes a connection between attackers and victims. Attackers seek to gain trust before convincing targets to provide their one-time passwords. In this phase of the attack, targets could encounter a few types of OTP bots.

• Voice bots. OTP bots commonly use vishing techniques to simulate voice calls. In vishing attacks, criminals program bots with the phone numbers of targets. Bots call the victim's phone number posing as a legitimate bank, a trusted vendor, or even a LinkedIn contact. As artificial intelligence and voice synthesis evolve, voice-based OTP bot attacks are becoming more effective and harder to track. With sufficient data, criminals can synthesize voices that closely resemble real-world contacts.
• Phishing emails. Alternatively, attackers may send phishing emails to their victims. Bots use urgent language to convince the victim to provide their one-time credentials. Attackers use social engineering to research their targets' professional duties and contacts. Bots leverage this research to write more persuasive messages. They also employ spoofing techniques to make the form of emails more convincing.
• SMS OTP bots. Some attacks use fake SMS messages to convince their victims. These OTP bots send messages that mimic official alerts from legitimate companies. For instance, attackers might copy a text message from a security partner, requesting credentials for routine maintenance. Or they might pose as lenders seeking access to corporate bank accounts.
• App-based OTP bots. Some OTP bots rely on fake authentication apps or web portals that closely imitate real ones. These aren’t real apps hacked by bots, but they’re convincing fakes built to steal one-time passwords.

2. Deception

The next stage in an OTP attack launches the password request process. The OTP bot triggers a password request on the service that criminals want to access. They generally use stolen credentials to ensure the target receives a one-time password request.

The authentication portal sends a one-time password to the victim's account. At this point, attackers must act quickly. The OTP bot contacts the target and requests that they share the OTP. This could happen via phone calls, emails, or SMS messaging apps.

3. Infiltration

If the bot has developed sufficient trust and acted quickly enough, victims will share the one-time passcode, often without thinking of the consequences. Following OTP delivery, attackers gain unauthorized access and compromise the wider network. From there, it's a short step to account takeovers and data breaches.

Remember: OTP bots are automated programs designed to act with minimal human input. Criminal collectives may use groups of bots to target an entire workforce. Advanced OTP bots can handle many stages of the attack automatically, significantly reducing the need for human intervention.

Common platforms and tools used in OTP bot attacks

While built as a legitimate messaging app, Telegram is frequently abused by attackers to host OTP bots, coordinate phishing campaigns, and share malware kits.

Telegram has been a popular base for attackers since at least 2021, when security experts uncovered the SMSRanger kit. This bot script impersonates PayPal and other payment apps. Entering a few scripting commands on Telegram allows criminals to direct bots to their targets. With scripts selling for under $50, OTP attacks are extremely cost-effective.

Other popular Telegram bots include SMS Buster, OTP Bot, Brainshot, and Apollo. These tools scan for SMS-based OTPs. Some of these tools are also integrated with CAPTCHA-solving filters or rely on social engineering to bypass CAPTCHA challenges.

Why OTP bots are a serious threat to businesses

OTP bots pose a threat to businesses because they target critical security infrastructure. Companies rely on 2FA/MFA to authenticate users before granting access. OTP bots bypass this measure, allowing threat actors to infiltrate network resources.

Another problem is that automated scripts drive down the cost of OTP attacks. Criminals can buy OTP bots and use Telegram's API to manage attacks. Operating bots requires relatively little expertise and they can target many network users at the same time.

Bots also exploit human weaknesses. Skillful phishers create scripts that prompt targets to behave in ways they would not normally do. Manipulating human behavior allows criminals to bypass technical security measures.

Successful OTP bot attacks often have serious consequences, including account takeovers, enabling exfiltration of sensitive data, or secondary ransomware attacks. A single employee's mistake can lead to crippling financial losses due to ransom payments, customer compensation, lost business, and regulatory fines.

Red flags and indicators of an OTP bot attack

Given the consequences listed above, companies need ways to detect criminal activity and cut OTP bot risks. Common red flags that signify OTP bot attacks include:

• Surges in OTP request numbers. Spikes in password requests may indicate criminal activity as bots target multiple accounts. Bot activity is more likely if requests come from similar device profiles or IP addresses.
• Rapid OTP requests. Users may also make repeated password requests in shorter timeframes than normal.
• Repeated login failures strongly indicate the use of these techniques. OTP bots may use credential stuffing to start attacks and find legitimate login credentials.
• Geolocation anomalies. Contacts may make calls, send SMS messages, or emails from unusual locations. Mis-matches between standard locations and sender locations should raise concerns.
• Disposable phone or VoIP numbers. Vishers use temporary numbers to conceal their identities and work around verification processes.
• Unusual changes in carrier networks. Employees may detect rapid changes in their mobile device carrier. This could indicate a SIM-swapping attack to enable OTP interception.
• Abnormal timing. Sometimes, OTP bots operate more quickly (or slowly) than a legitimate site. Changes in the rhythm of interactions with authentication systems could indicate bot activity.

How to prevent OTP bot attacks and protect your business

One-time passwords require rock-solid protection against malicious actors. Many businesses assume their OTPs are secure and focus their energy on other security measures. However, complacency is not an option.

Companies need strategies to detect and neutralize automated OTP bots. Let's discuss a few best practices to achieve these aims.

Don't rely on SMS messages for multi-factor authentication

MFA is essential when strengthening account security. However, SMS-only MFA is becoming less secure. Criminals can easily intercept SMS-based OTPs. Parsing text messages for evidence of phishing is also more difficult than checking email headers or sender addresses.

Token-based authentication is a more reliable method. Even better, you can combine OTPs with biometric verification factors. Criminals struggle to copy biometrics (provided you store factors securely).

Implement account protection measures

Put in place security measures to block suspicious requests. For example, captcha filters block many OTP bots by requiring more than an OTP alone. Rate limiting blocks access after a certain number of requests, while short expiry times help cut the risk of OTP theft.

Security teams can also monitor access requests in detail to verify user identities. Device posture security measures check that a user's device is legitimate. Monitoring tools can also track user behavior and detect unusual patterns that indicate ongoing attacks.

Implement robust password security policies

Security policies should require long, complex passwords and make secure password management tools mandatory. Users should also verify requests to share OTPs with external identities. Apply the principle of least privilege. All OTP requests are suspicious until proven otherwise.

Integrate OTP security into anti-phishing training

You probably already educate employees about phishing risks. Understanding temp OTP bot activity should be part of training exercises. Ensure staff understand how criminals use language to prompt unsafe behavior. Reinforce the need for verification and vigilance.

Tools that help defend against OTP bots

Today’s attackers use machine learning and automation to enhance OTP bots, making them harder to detect and more effective. Businesses should respond by updating their technical toolkit. The tools below enhance digital security and help block automated bots:

• Behavioral analytics. These tools analyze user behavior to generate baseline data. They compare user signatures with real-time behavior patterns, helping detect anomalies and potentially prevent unauthorized account access.
• Authentication apps. Apps like Google Authenticator and Authy store user account data and deliver secure OTPs for each login request. They do not rely on SMS messages, eliminating a critical vector for bot attacks.
• IP allowlisting. Allowlisting tools keep registers of authorized IP addresses. This blocks access for attackers without the right digital address.
• Device Posture Security (DPS). DPS tools go further than IP addresses, assessing the signatures of devices accessing the network. They keep logs of approved user devices and block access if device profiles don't match.
• Anti-fraud tools. These tools track network activity to detect evidence of fraud before a suspicious transaction occurs.
• Adaptive authentication. Flexible tools apply step-up authentication in unsafe contexts. For example, employees may access central networks from public Wi-Fi services. Or they could request access to extremely sensitive information. In those circumstances, adaptive tools request additional login credentials like biometric factors or hardware tokens.
• Dark Web monitoring. NordStellar’s platform monitors Dark Web forums, seeking mentions of companies. Meanwhile, data breach monitoring checks various types of exposed data, such as login credentials, email addresses, and personally identifiable information (PII). This way, security teams gain early insights into emerging OTP threats.

Should businesses still use OTP for authentication?

OTPs are not going away and companies need authentication systems to safeguard sensitive information. However, the spread of OTP bots is challenging the use of OTPs, especially those delivered via SMS.

One thing is certain: Companies using SMS-based authentication should consider alternatives. Criminals are highly skilled at using text messages to trick users and steal OTPs, making SMS passwords extremely vulnerable.

Other forms of authentication (tokens, authentication apps, and biometrics) are safe, provided companies use secure OTP delivery systems.

To strengthen your defense against OTP bot attacks:

• Monitor access requests for unusual or high-risk activity.
• Train employees to recognize social engineering and OTP phishing.
• Use encryption to protect OTPs at rest and in transit.
• Apply threat intelligence to detect OTP bot patterns early.

The key takeaway is that authentication remains essential for network security. However, if you let your guard down, OTP bots will bypass weak authentication processes.