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HolidayBuyer's Guide
Security

Major brands see rise in online fraud

"Brandjacking" is becoming common on the Web, as cybersquatting, phishing and click fraud take off, study shows.

Corporate brands face multipronged assaults from fraudulent online attackers, according to a report published Monday that quantifies the scope of the most common threats.

MarkMonitor, which supplies Internet brand protection services to companies, said its new "Brandjacking Index" found cybersquatting--in which illicit sites usurp popular trademarks--false association, phishing and click fraud as major threats.

A four-week survey of public Web sites completed early in April found cybersquatting posed the greatest threat to brands. Phishing--the criminal use of e-mail to trick consumers into divulging passwords, credit cards and other personal details--and domain "kiting"--the rapid registering and dropping of similar-sounding Web site names--are on the rise.

The study tracked daily mentions on 134 million public Web records for the world's top 25 brands, along with major brands from eight industrial categories such as autos, apparel, food and high tech. The study ran from March 9 to April 6.

MarkMonitor found major brands suffered, on average, 286,000 examples of cybersquatting during over the four-week long survey, far and away the most common abuse detected.

Click fraud--or siphoning off consumers via fake pay-per-click ads--was identified 50,743 times, while e-commerce fraud occurred 21,093 times and kiting 11,015. These figures represent the four-week average for each brand.

Frederick Felman, MarkMonitor's chief marketing officer, said in an interview that cybersquatting is a starting point for other forms of abuse, including search marketing tricks designed to pull traffic away from reputable Web sites.

"Brand holders face a double whammy: The volume of these abuses is significant, while abusers are becoming alarmingly savvy marketers," Felman said.

MarkMonitor said media and Internet companies are the biggest targets of cybersquatting, while banks and other financial services are the mostly likely victims of kiting and phishing.

That media and Internet brands are the most attractive targets--drawing 31 percent of what MarkMonitor collectively terms "brand abuse"--reflects the fact that 10 of the top 15 sites on the Web fall in this category.

The number of phishing attacks grew 104 percent during the month of March from the same month in 2006, the survey found, with more than 229 brand name companies, mostly financial services firms, coming under assault.

Financial services made up 41 percent of all phishing attacks in the first quarter of 2007, up from 29 percent in the first quarter of 2006. The latest quarter was the first time banks had outpaced online auctions such as eBay as targets. Auctions suffered 36 percent of phishing attacks.