In Depth

Foiling Phishing

Companies on the front lines of the phishing wars share tactics for protecting customers and employees alike.

By Dragoon Alice

October 01, 2004 — CSO — On june 25, an e-mail that appeared to be from the PayPal Support Center asked members of the online payment service to update their account information to protect themselves from fraud. Failure to update records by July 15, the message read, would result in account suspension. Recipients who clicked on the embedded link encountered a familiar PayPal log-in screen.

Customers who dutifully filled in the online form that followedcoughing up their e-mail address and PayPal password, credit card number and expiration date, billing address and phone number, checking account number, ATM code, Social Security number, birth date and mother's maiden namewere greeted with an "updating your account" screen for a few seconds before landing on a replica of a general PayPal page.

Of course, anyone familiar with the rapidly growing phenomenon of phishing could guess that neither the e-mail nor the website was from PayPal. In this case, the data was actually on its way to a crook in Seoul.

That's phishing: an online method of identity theftusing spoofed e-mails, websites and now even instant messagesthat requires minimal effort and capital. "A lot of drug lords are getting into phishing," says Avivah Litan, a vice president and research director at Gartner. "It's easier and more lucrative than selling cocaine." In June, the Anti-Phishing Working Group (APWG), an industry group, counted 1,422 phishing attacks, more than 12 times the number of attacks reported in December. So far, these attacks have mostly targeted customers of large banks, credit card companies, online payment services, ISPs and online retailers. In June, Citibank alone was the target of 492 attacks, and eBay experienced 285 attacks. PayPal was targeted 42 times in February, 63 in March, 135 in April, 149 in May and 163 in June. But any company with a recognizable brand name could very well become the next target. Government agencies, including the IRS and the FBI, have been spoofed by phishers eager to capitalize on governmental authority to make an easy profit. In August, some phishing e-mails purported to solicit donations to John Kerry's presidential campaign. Even internal corporate data is becoming a target for phishers, as executives at Wyndham International discovered when a message claiming to be from the hotel chain's IT department asked employees to verify their corporate passwords.

"Spoofing is a threat to any company with a sizable customer base," says Ken Miller, vice president of risk management at PayPal. Dave Jevans, APWG chairman, says phishing has scared some consumers so badly that they say they're not going to bank online anymore.

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