Cybersquatting: The New Gateway Scam to Identity Theft?

Americans are falling victim to a growing Internet crime wave known as cybersquatting, according to legal and trademark experts.

Cybersquatters are individuals or companies that create Web addresses that are remarkably similar -- perhaps only one or two letters off -- from addresses for well-known companies or products. For example, known cybersquatting Web sites include instead of and instead of the correctly spelled

Cybersquatters' goal is to hijack Web traffic from legitimate Web sites to their counterfeit sites and turn a profit.

While some cybersquatters make money by filling their sites with typical pay-per-click (PPC) ads, others take a more devious approach.

"Cybersquatters are getting more sophisticated as they are trying to take advantage of consumers," Alan Drewsen, executive director of the International Trademark Association (INTA), told "As the number of domains increase, it just increases the possibility of this fraudulent behavior."

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Some "sophisticated" tactics include cybersquatter-controlled sites designed to look like bank Web sites that trick consumers into revealing sensitive personal information and phishing, the use of fraudulent e-mails to bring traffic to those fake sites.

These methods have serious ramifications for consumers. In 2006, 3.5 million adults admitted to revealing sensitive personal or financial information to a phisher, according to market analyst Gartner Inc. Of those, 2.3 million lost money, with each victim losing an average of $1,244.

"Cybersquatters are targeting well-known brand owners and consumers more and more," Drewsen said. "Consumers rely on genuine Web sites for a safe online experience, and we are working to protect that experience."

To bring the problem of cybersquatting to light, five Fortune 500 companies and INTA members, including Microsoft Corp., Dell Inc., Time Warner Inc., Wal-Mart Stores Inc. and Yahoo! Inc., filed legal actions in the last week against a total of 22 cybersquatting operations.

"The problem [of cybersquatting] is becoming so prevalent," Drewsen said of the group effort.

That's a fact not lost on Microsoft, Aaron Kornblum, a senior attorney on Microsoft's Internet safety enforcement team, said.

In the last year, Microsoft has launched 15 legal actions and recovered more than 2,000 domain names and more than $1.17 million in illegal profits.

"Billions of dollars are being made in this consumer diversion," Kornblum said, explaining that Microsoft is only one of many companies targeted by cybersquatters.

In their three lawsuits filed in the last week, aimed at operations in Bronx, N.Y., Indiana and Canada, Microsoft is working to win the rights to domain names, such as and Microsoft accuses the owners of these domain names and others of being cybersquatters who allegedly filled their pages with pay-per-click ads to turn a profit.   

"Consumers rely on trademarks and brands to know that they are dealing with a trusted entity [and getting] a good or service of the high quality that they demand and expect to receive from that brand, and [cybersquatters] are preying on that good will and preying on that promise," Kornblum said.

So how should consumers protect themselves from "preying" cybersquatters?

INTA says consumers should:

- Type the names of desired Web sites into a search engine, such as Google or Yahoo!, rather than directly into the browser.

- Bookmark frequently visited pages.

- Be aware of e-mails with generic greetings or that ask the recipient to update his account's username and password.

- Report suspicious Web sites both to the "company whose trademark is being abused" and to organizations, such as the Internet Crime Complaint Center.

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