MARKET SCAMS

[thepennyking]

U.S. shuts down Internet 'phishing' scam

WASHINGTON (Reuters) -- The U.S. government said Monday it had arrested a Texas man who crafted fake e-mail messages to trick hundreds of Internet users into providing credit card numbers and other sensitive information.

Zachary Hill of Houston pleaded guilty to charges related to a "phishing" operation, in which he sent false emails purportedly from online businesses to collect sensitive personal information from consumers, the Federal Trade Commission said.

According to the FTC, Hill sent out official-looking e-mail notices warning America Online and Paypal users to update their accounts to avoid cancellation.

Those who clicked on a link in the message were directed to a Web site Hill set up that asked for Social Security numbers, mothers' maiden names, bank account numbers and other sensitive information, the FTC said.

Phishing has emerged as a favorite tool of identity thieves over the past several years and experts say it is a serious threat to consumers.

Hill used the information he collected to set up credit-card accounts and change information on existing accounts, the FTC said. He duped 400 users out of at least $75,000 before his operation was shut down December 4, FTC attorneys said.

Hill will be sentenced on May 17, according to court documents.

A lawyer for Hill was not immediately available for comment.

Scam artists have posed as banks, online businesses and even the U.S. government to gather personal information, setting up Web pages that closely mirror official sites.

FTC officials said consumers should never respond to an e-mail asking for sensitive information by clicking on a link in the message. "If you think the company needs your financial information, it's best to contact them directly," FTC attorney Lisa Hone said.

Those who believe they may be victims of identity theft should visit the FTC's Web site (www.consumer.gov/idtheft), she said.

America Online is a division of Time Warner Inc., as is CNN. Paypal is owned by eBay Inc.

http://www.cnn.com/2004/TECH/internet/03/22/crime.phishing.reut/index.html