Study: Cybersquatting Still Lucrative in Bad Economy

CSO — Unlike many economies around the globe, the criminal industry of cybersquatting and brand abuse saw no downturn in 2008.

A report released this month by MarkMonitor, a security software firm focused on enterprise brand protection, found online abuse of many of the world's most recognizable brands rose in 2008. The report also found that 80 percent of abusive sites identified in 2007 were still active today (See the story on last year's results in Battling Brandjackers).

According to the latest MarkMonitor Brandjacking Index, cybersquatting grew by 18 percent in 2008, proving that it continues to be a lucrative mode of exploitation, according to MarkMonitor officials. Cybersquatting is the practice of registering, trafficking in or using a domain name with bad faith intent to profit from the goodwill of a trademark belonging to someone else. MarkMonitor's research found a total of 440,584 instances of cybersquatting were identified in Q4, followed by 86,837 instances of false association and 33, 614 instances of pay-per-click abuse.

"Consistent and notable quarter-over-quarter growth in cybersquatting for two years demonstrates that brandjackers are increasingly leveraging trademarks as they make use of best practices in search engine optimization to divert traffic to illegitimate or unauthorized sites," said MarkMonitor officials in a statement on the findings.

Brandjackers are also combining cybersquatting with other abuses, a practice called "blended abuse," to attack brand reputations. Communication platforms and social networking sites like Twitter and Habbo are increasingly becoming vehicles for abuse, according to a company spokesperson. (Read about common scams in Dirty Tricks: Social Engineers' Favorite Pick Up Lines)

The report also found brand abuse grew overall across mainstream industry brands including apparel, automotive, high technology and media. In addition, phishers expanded their targets in 2008, with 444 organizations phished for the first time.

"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 officer of MarkMonitor, in a statement.

The United States, Germany and the United Kingdom continue to host the majority of brandjacking websites. According to the research, 68 percent of websites that host brand abuse are hosted in the United States. Germany hosts 9 percent followed by the United Kingdom at 4 percent. Canada hosts 4 percent.

English speaking countries account for 80 percent of the top 15 countries hosting brandjacking websites.

"Brandjackers are honing their techniques as they continue building their revenue on the good names of leading brands globally," said Frederick Felman, chief marketing officer of MarkMonitor, in a statement. "That 80 percent of abuse sites identified in our study last year remain active today confirms that abuse is economically sustainable for fraudsters. We expect attacks to grow both internationally and in complexity, further increasing the threat to organizations' reputations and revenues."