Cyber-squatters reaping rich rewards

But brand holders are fighting back

Ian Williams, vnunet.com 25 Feb 2008

Cyber-squatting continues to be the most prevalent form of online brand abuse after a 33 per cent jump in the past year, new research reveals.

The latest Brandjacking Index from MarkMonitor found significant drops in domain kiting and related pay-per-click fraud.

MarkMonitor attributed this trend to aggressive legal action by brand holders as well as increased scrutiny by domain registrar Icann.

However, phishing techniques and targets continued to evolve in 2007, and the report highlighted a 533 per cent increase in phishing attacks against the retail and services sector.

"Brand-jackers continue to sharpen their techniques to reap greater profits, as demonstrated by this quarter's accelerated threats to mainstream industries and their customers," said Irfan Salim, president and chief executive at MarkMonitor.

"But brand holders have proven that they can fight back, and we have witnessed an incredible turnaround in domain kiting and pay-per-click abuse."

Cyber-squatting rose 33 per cent over 2007, making it the most perpetrated form of abuse and highlighting the increased use of brand names and trademarks to drive traffic to illegitimate, unauthorised or offensive sites.

Instances of domain kiting, which involves deleting a domain name during the five-day grace period and immediately re-registering it for another five-day period, declined 14 per cent in 2007.

MarkMonitor believes that this decline is closely linked with successful lawsuits filed by large brand holders against enabling registrars, along with a greater application of laws against cyber-squatting and counterfeiting.

Instances of pay-per-click fraud, an abuse closely associated with domain kiting, also dropped to a yearly low in the fourth quarter.

MarkMonitor found that brand-jackers are increasingly shifting their focus to mainstream industry targets, including automotive, food and beverage and consumer packaged goods.

Abuses of automotive brands increased by 83 per cent in 2007. Similarly, food and beverage brand abuse increased 63 per cent, consumer packaged goods increased 62 per cent and apparel increased 49 per cent.

The only industry segment to decline in 2007 was high technology which shrank slightly by 10 per cent over the course of the year.

The report also found that phishers are targeting more organisations and shifting their focus to new industries.

MarkMonitor reported that 412 organisations were targeted in the fourth quarter of 2007, an increase of 38 per cent from the previous quarter and 37 per cent over the year.

"Criminals and fraudsters around the world continue to develop new and adaptive ways to take advantage of brands," said Frederick Felman, chief marketing officer at MarkMonitor.

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