Online abuse of top brands was a growth industry for fraudsters

Online abuse of top brands was a growth industry for fraudsters
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First Published: Tue, Mar 10 2009. 12 56 AM IST

Updated: Tue, Mar 10 2009. 12 56 AM IST
Mumbai: Online abuse of many of the world’s leading brands rose in 2008, a year the global economy went into a tailspin, according to the latest Brandjacking Index compiled by MarkMonitor Inc., a US-based firm that specializes in Internet fraud prevention and brand protection.
Also See Brandjacking: A Rising Threat (Graphic)
For the second year in a row, cybersquatting—using a domain name with the intent of profiting from the goodwill of someone else’s trademark—ranked as the brandjacker’s tool of choice, with such cases posting an 18% increase in 2008.
Phishing attacks—attempting to acquire information such as usernames, passwords and credit card details by masquerading as a trustworthy entity—against financial services brands increased 51% in the second half of last year, a rise MarkMonitor attributes to the financial market tumult.
The report also discloses that 80% of abusive sites identified in 2007 are still active today, a signal for brandholders to take a stronger stance against fraudsters, say MarkMonitor officials.
“Brandjackers are honing their techniques as they continue building their revenue on the good names of leading brands globally,” Frederick Felman, chief marketing officer of MarkMonitor, said in a statement. “We expect attacks to grow both internationally and in complexity, further increasing the threat to organizations’ reputations and revenues.”
And while the issue is still nascent here, brandjacking is a potential threat to India.
“As more and more Indian brands reach the global stage, they, too, will be subjected to these abuses. Well-known brands drive traffic...and brand abuse like cybersquatting relies on traffic,” Te Smith, vice-president at Mark Monitor, said in an email reply to queries from Mint.
Given the potential threat, Smith says Indian brandholders and brand management professionals need to put aholistic strategy in place to protect their brands from abuse.
Action should include monitoring online channels—auction sites, B2B (business-to-business) exchanges, e-commerce sites—for unauthorized distribution (counterfeits and gray market goods), being on the lookout for trademark abuse on the Internet and watching for email-borne threats such as phishing attacks or even malware attacks.
“Remember, technology may have enabled the problem, but technology can also solve the problem,” Smith says.
Mahesh Murty, co-founder of digital agency Pinstorm, says some big online advertisers in India are squatting on keywords that happen to be their rivals’ brand names.
So, someone Google-searching for brand X could find an ad for rival Y served next to brand X’s website. This could take potential customers and business away from companies.
The reason companies do this is simple—consumers trust brands and look for them, especially when they’re in a mood to buy, he says.
“The highest conversion rates in online sales—especially hotel and flight bookings—happen off brand keywords.” It’s simple to protect trademark on Google or other search engines, and every brand ought do so right away, Murty adds.
The Brandjacking Index is an independent report produced by MarkMonitor that tracks and analyses abuses of 30 brands from the Best Global Brands study by consultancy Interbrand Corp.
The report examines how brandjacking tactics—such as cybersquatting, false association, pay-per-click abuse, objectionable content, unauthorized sales channels and phishing—have changed over the past year.
MarkMonitor searches about 134 million public records daily for brand abuse in domain data as well as in the US and international patent and trademark office data.
The phishing data analysed is based on feeds from leading international Internet service providers, email providers and other partners. The firm processes up to 16 million unique suspected phishing emails daily.
Brand abuse grew overall across mainstream industry brands, including apparel, automotive, high technology and media markets.
‘Blended abuse’
Consistent and notable quarter-on-quarter growth in cybersquatting for two years demonstrates that brandjackers are increasingly leveraging trademarks as they divert traffic to illegitimate or unauthorized sites, said the report. Brandjackers are also seen to be combining cybersquatting with other forms of abuse, a practice called “blended abuse”, to attack brand reputations.
A total of 440,584 instances of cybersquatting were identified in the fourth quarter of 2008. Also, phishers expanded their targets in 2008, with 444 organizations phished for the first time. Additionally, 422 organizations were phished in th fourth quarter of 2008, an increase of 8% from the preceding quarter.
“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,” says Irfan Salim, president and chief executive officer of MarkMonitor. “The good news is that brandholders have resources available to them to take action. The companies who are most successful in fighting abuse are those that make defending their brand a priority at the highest levels of management.”
While brand abuse has spread worldwide, the US, Germany and the UK continue to host the majority of brandjacking websites. About 69% of websites that host brand abusers are in the US. Germany hosts 9%, followed by the UK at 4%.
By category, abuses of apparel brands rose 28% in 2008. Other industries experienced notable growth in brand attacks in 2008, including automotive at 21%, high technology at 21%, and food and beverages at 17%. Abuse of media brands reached a yearly high of 43,832 instances, signifying an 11%increase in 2008.
The top brand-related problem for financial institutions remains phishing due to increasingly sophisticated methods and technology. MarkMonitor findings disclose that phishers moved into new verticals, became more targeted and continue to scale operations.
Phish attacks against “other” industries (payment services, retail/service or financial brands) reached 11,000in 2008, a 135% increase.
Attacks against payment services brands increased 122% in the second half of the year, when the financial turmoil in the US and other advanced economies deepened.
Graphics by Paras Jain / Mint
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First Published: Tue, Mar 10 2009. 12 56 AM IST