Consumers Losing to Phishing More in 2007 than 2005-06

In the United States, around 3.5 Million adults lost their money due to phishing attacks and identity theft over the Internet during a period of 12 months ending August 2007, with an increase of 57% over 2006, a Fraud Analyst at Gartner said on December 17, 2007.

A survey involving 4,500 online adults in the US in August 2007 revealed that phishing scams were far more successful during the current year than in 2005-06. According to consumers who responded to phishing e-mails in 2007, 3.3% lost money due to such attacks compared to 2.3% in 2006 and 2.9% in 2005, as revealed in similar Gartner surveys in those years.

Vice President and prominent analyst, Avivah Litan, at Gartner said that phishing is not a thing of deep past. Even now consumers who are aware of the concept, which is a minority, might be vulnerable to the scams. Litan argued that phishing is much stealthier and more devious. She said phishers are capturing information from MySpace and Facebook and using that information to send e-mail pretending to be a friend. Also, fraud with greeting cards and charities are dramatically rising, Litan said.

The survey further shows that the average loss in dollar per phishing incident has declined to $886 in 2007 from an average of $1,244 in 2006. However, since victims were more in 2007, people lost $3.2 Billion to phishing. Still there is some good news that consumers managed to recover a greater amount of the lost sums than before. In 2007, about 1.6 Million adults regained nearly 64% of their lost funds compared to 1.5 Million adults who could recover 54% in 2006.

Gartner's yearly survey also revealed other developments in ID theft. There was a predominance of debit card account and bank check information on phishers' target list. In 2007, of the people whose money were stolen, 47% said it happened through a bank check or a debit card while 32% attributed it to credit card frauds. In 2006, credit and debit card frauds occurred in almost equal numbers.

Gartner predicts that malware and phishing attacks would continue to grow through 2009.

Related article: Consumer NZ Website Encounters Hack

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