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07 Aug 2007
A million US victims lost "billions of dollars" to email phishing scams in the past two years, new research has warned.
According to Consumer Reports's latest State of the Net survey, American consumers lost more than $7 billion over the last two years to viruses, spyware, and phishing scams.
Additionally, the survey shows that consumers face a one in four chance of succumbing to an online threat, a number that has slightly decreased since last year.
The number of consumers responding to email phishing scams has remained constant at eight per cent. The research projects that one million US consumers lost billions of dollars over the past two years to such scams.
The study went on to warn that many underage youngsters are at risk on social networks such as MySpace and Facebook. In households surveyed with minors online, 13 per cent of the children registered on MySpace were younger than 14, the minimum age the site officially allows, and three per cent were under 10. And those were just the ones the parents knew about.
Based on the survey, Consumer Reports projects that problems caused by viruses and spyware resulted in damages of at least $5 billion over the past two years.
The poll was conducted by the Consumer Reports National Research Center among a nationally representative sample of more than US 2,000 households with internet access.
Based on survey projections, computer virus infections prompted an estimated 1.8 million households to replace their computers in the past two years and 850,000 households to replace computers due to spyware infections in the past six months.
Additionally, 33 per cent of survey respondents did not use software to block or remove spyware. And the study projects that 3.7 million US households with broadband remain unprotected by a firewall.
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These loss figures illustrate the sheer lack of awareness of internet users
A Wikipedia entry reported a 70% success rate in phishing experiments on social networks. This is hardly surprising given the amount of trust users of these networks have in the unknown individuals who inhabit these websites. The general public seem to be just as susceptible to the electronic fraudster as ever. The effects of phishing are amplified by the plethora of personal details people insist on putting on these websites, making any attacks on them targeted and personal, to a point where they are more likely to believe the phishing event, as it will hit on key personal triggers. Social websites also encourage the cloning of identities. One school of thought is ?If you are dumb enough to put your personal details in a public place, particularly after all the warnings, you should expect to be cloned?. However this approach is not good enough as the real issue for businesses is that it is they which bear the brunt of a footloose attitude to identity, not the person who advertised their personal details to all and sundry. As a result, banks and other institutions have to spend millions on anti-fraud activity, both electronic and physical. This is compounded by issues surrounding verifying ?is this person really who they claim to be? ? as the more information a fraudster has the harder this is. All is not lost, organisations are becoming more sophisticated in their approach, and not only are the avenues for fraud narrowing, but the size of the average loss is falling. Ultimately this reduction in fraud is all down to good software, intelligence and the diligence of the institutions who ultimately suffer the losses, not the fool who advertised their identity to everyone in the first place.
Posted by: Bart Patrick, Risk Strategy Manager, SAS UK 08 Aug 2007