Cybersquatting: The New Gateway Scam to Identity Theft?

September 17, 2007 5:07 PM

Krista Kjellman Reports:

Cybersquatting_mn 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 dellcomputersystem.com instead of dell.com and samslcub.com instead of the correctly spelled samsclub.com.

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 ABCNews.com. "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 microsoftword2007.com and wwwxbox360.com. 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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September 17, 2007 | Permalink | User Comments (14)

User Comments

That's why I conduct 99% of my business face to face, and leave the internet as an information resource. There's no online shopping allowed at my house...and, imagine that, nobody had stolen MY identity!! Brilliantly simple, yet elegant.

Posted by: VeteranD | Sep 17, 2007 6:54:23 PM

To avoid being victim of cybersquatting ... enter the name of the site you want to go into google or yahoo instead of directly into the browser address bar? LOLLLL ... Thats nuts ... you *want* to type it in directly into browser address bar ... but spell it correctly! In other words, pay attention to what you're typing.

Posted by: Fernando | Sep 17, 2007 7:03:38 PM

I was robbed twice when doing business "face-to-face" so there is always a risk. I prefer the Internet and my ID has never been stolen.

Posted by: Jerry | Sep 17, 2007 7:18:11 PM

I've been shopping online for a decade now without difficulty. An attentive person can avoid these pitfalls. There is risk in everything.

Posted by: Lori | Sep 17, 2007 7:45:20 PM

Your identity can easily be stolen whether you are doing any online shopping/banking, or dealing with "face to face" transactions. To assume otherwise is both naive and dangerous. In all cases where information about myself has been (potentially) compromised, *none* of it had a thing to do with my online activities. As Jerry says, the risk is always there, so don't get comfortable in your bubble of "I do everything face-to-face, therefore I'm not at risk"!

Posted by: Ray | Sep 17, 2007 7:53:56 PM

I have to agree with Jerry and Lori on this one. When my personal information was stolen I was not on line. I had simply served my country and thus had medical information on file with the VA.

Posted by: Les | Sep 17, 2007 8:23:39 PM

Important article! I know plenty of people who can benefit from hearing about this.

People might consider saving Favorites links for sites where identity or financial information is involved. Then, click the favorite to ensure you arrive at the proper place every time.

The key to this approach, of course, is to have the correct site address saved in Favorites.

Good luck folks; it's a jungle out there!

Posted by: Rick | Sep 17, 2007 8:41:39 PM

i agree thats like saying

to not get raped you dont go outside

or to get mugged

or to get shot

or to get in a car accident for that matter

i shop online and have never had a problem

Posted by: mcnut | Sep 17, 2007 9:41:58 PM

This is all President Bush's fault.

Posted by: Robert NY | Sep 17, 2007 10:55:11 PM

If you make a wrong turn off the turnpike and end up in the wrong shopping mall, but find a grocery store & shop there, you've done the same thing. How is this fraud? If you're dumb enough to spell the name wrong, your an idiot. Some of these companies are legit and do business just like the recognizable company.. This sounds like another instance of big business trying to squeeze out all the little guys, once and for all. LAME story, lame problem, effecting lame people.

Posted by: Todd | Sep 17, 2007 11:12:28 PM

This is not new. There is the anti-cybersquating Act of 2000 that allows these big companies to take legal action and get the domain names.

The only problem is the Act only works for companies with $ since you must hire a lawyer and the cost is too great for the small guy... and the other problem is these large companies can use the ACT to get domains that they want that are not violating the law from the smaller web businesses and private persons who don't have the $ to fight in court. Really a law for the big guys.

My final comment is you can't protect everyone from eveything. People have to take personal responsibility!

Posted by: Paul | Sep 17, 2007 11:13:33 PM

There are so many offers on line when I looked for the spybot softwar..Can you please tell me specifically which one.or send the link..
I appreciate your help. Peace..Lynne

Posted by: Lynne | Sep 18, 2007 8:02:36 AM

I have accidentally run across many of these and it's confusing, frustrating, and hardly ever takes you to what you are looking for. More often than not they are search enjines or pages full of ads. They look profesional but aren't. Even if they are a company selling a similar thing, wouldn't you be ticked off if you though you were getting insurance from a certain company with known features that you wanted and you find out it was a different one because even though you spelled the name of the company right the website was at a different address?

Posted by: Vicki | Sep 19, 2007 4:38:50 PM

well, gee...then we must hire more government security workers to keep us safe from the internet now. not only are the children unsafe from predators, now the adults are unsafe as well. please big brother protect me!!! i can't think and act properly on my own. Gimme a break.

Posted by: more b.s. | Sep 27, 2007 5:58:28 PM

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