Brands at risk as fraudsters step up cyber squatting

The registering of misleading domain names can have serious repercussions on a company's brand

Incidents of cyber squatting, the practice of registering misleading domain names to ensnare surfers or sell them to the relevant company, are on the rise, according to a new study by brand protection firm MarkMonitor.

The number of incidents rose by 18 per cent last year to a whopping 1,722,133, and MarkMonitor said that the situation is further confused by the fact that many sites already identified as abusing a brand name are still in existence. Some 80 per cent of the cyber squatted sites identified as relating to genuine firms in 2007 were still online in 2008.

"Online brand abuse has reached a critical phase during which new exploits are accelerating while older threats endure, causing real and tangible harm to corporate reputations, intellectual property, customer relations and revenue streams," said Irfan Salim, president and chief executive of MarkMonitor.

Although brand abuse is common throughout the world, companies in the US, the UK and Germany are most often targeted, according to the study. The people setting up the sites are equally close to home, according to the firm, which found that 68 per cent of brand-abusing sites are hosted in the US, nine per cent in Germany, four per cent in the UK and four per cent in Canada.

"Brand-jackers are honing their techniques as they continue building revenue on the good names of leading brands globally," said Frederick Felman, chief marketing officer of MarkMonitor.

"That 80 per cent of abuse sites identified in our study last year remain active today confirms that it is economically sustainable for fraudsters. We expect attacks to grow internationally and in complexity, further increasing the threat to organisations' reputations and revenues."