Firms Join Up to Combat Web Fraud
IBM, Other Heavyweights
Seek Standards to Block
Filching of Personal Data
By KEVIN J. DELANEY
Staff Reporter of THE WALL STREET JOURNAL
June 15, 2004; Page D5
Over a dozen corporate heavyweights are teaming up to fight "phishing," the use of the Internet by crooks to filch personal data such as bank-account numbers and user passwords.
The companies, which include International Business Machines Corp., Fidelity Investments and Tenet Healthcare Corp., tomorrow plan to announce the formation of the Trusted Electronic Communications Forum, a trade group that is expected to research and promote technical standards to combat phishing.
Research firm Gartner Group estimates that 57 million U.S. Internet users have received e-mail linked to phishing scams and about 1.8 million may have divulged personal information as a result. And the problem is increasing: In research conducted in April, Gartner found that 76% of all known or suspected phishing attacks had taken place in the previous six months.
In a typical phishing attack, a consumer receives an e-mail purporting to be from a bank, telecom company, or other institution. The fraudulent e-mails are designed to resemble actual messages from the company, usually by lifting its design and corporate logos. They often direct consumers to a similarly counterfeit Web site and ask them to enter personal information, such as a bank-account number and online-banking password. Crooks use that information to defraud the consumer. Their success at mimicking legitimate e-mails and Web sites has made such scams increasingly effective.
Citigroup Inc.'s Citibank unit, eBay Inc. and its PayPal unit were the three organizations targeted most often by phishing scams in April, according to the Anti-Phishing Working Group, another industry association, with 400 members from over 250 organizations. Financial-services institutions represented 15 of the 20 most-targeted organizations in April, according to the group.
"The epidemic as a whole has increased so much in size and success rates in the past several months," says Shawn Eldridge, TECF's chairman and director of product and market strategy at PostX Corp. "The problem is very large and no one is immune."
Corporations are concerned about phishing because of its potential negative impact on electronic commerce and online services they offer. The TECF aims to promote standard technologies and business practices to combat phishing and assist in prosecuting offenders.
Its other founding members include ABN AMRO Bank NV, AT&T Wireless Services Inc., Best Buy Co., Charles Schwab Corp., E*Trade Financial Corp., HSBC Holdings PLC, Royal Bank of Scotland Group PLC, Siebel Systems Inc. and Target Corp.
Avivah Litan, a senior analyst at Gartner, Stamford, Conn., says the involvement of many different organizations is important. "They're coming up with solutions that really need to be widespread if they're going to be used and effective," says Ms. Litan, who was briefed ahead of the TECF announcement.
