Firms Join Up to Combat Web Fraud

R. A. Hettinga rah at
Tue Jun 15 09:59:53 PDT 2004


The Wall Street Journal

 June 15, 2004

Firms Join Up to Combat Web Fraud
IBM, Other Heavyweights
 Seek Standards to Block
 Filching of Personal Data

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

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

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

R. A. Hettinga <mailto: rah at>
The Internet Bearer Underwriting Corporation <>
44 Farquhar Street, Boston, MA 02131 USA
"... however it may deserve respect for its usefulness and antiquity,
[predicting the end of the world] has not been found agreeable to
experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'

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