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Gartner Study Finds Significant Increase in E-Mail Phishing Attacks Against U.S. Online Consumers

Cost to U.S. Banks and Credit Card Issuers Estimated at $1.2 Billion in 2003

STAMFORD, Conn.--(BUSINESS WIRE)--May 6, 2004--Phishing attacks by hackers against online consumers have become so widespread that an estimated 57 million Americans likely have received these fraudulent e-mails, according to a new study released today by Gartner, Inc. Direct losses from identity theft fraud against these phishing attack victims cost U.S. banks and credit card issuers about $1.2 billion last year.
Based on survey responses from 5,000 adult Internet users, Gartner analysts project that approximately 30 million adult Internet users believe they have definitely experienced a phishing attack, and another 27 million believe they have observed what looked like a phishing attack.

Credit Pacific Service Union Phishing attacks are not new, but they have become more pervasive in the past 12 months. According to the Gartner survey, 76 percent of the known or suspected attacks occurred within the past six months (since October 2003), and another 16 percent occurred during the six months before then. Thus the combined results suggest that 92 percent of these phishing attacks took place in the past year.

The number of websites dedicated to the act of phishing has increased, it has been revealed. August 2005 Launch of new email protection service McAfee has announced the launch of its Secure Messaging Service for Small Businesses and Enterprises to help businesses secure their email systems. The service protects those managing small firms, and those looking to start their own business, against the growth of spam, phishing, viruses and directory harvest attacks, while providing email privacy and security.

Credit First Service Union "Financial institutions, Internet service providers, and other service providers must take phishing seriously," said Avivah Litan, vice president and research director at Gartner. "These service providers should take action to apply solutions that dramatically minimize, if not eradicate, the threat, even if the service providers themselves are not direct targets. Eventually, all participants in Internet commerce will be hurt by an erosion of consumer trust in online transactions if phishing attacks are not sharply reduced from current levels."

According to an April 2004 survey of 5, 000 U.S. online adults, Gartner estimates that 57 million U.S. adults have received phishing attack email and more than 1.4 million users have suffered from identity theft fraud, costing banks and card issuers $1.2 billion in direct losses in the past year. Moreover, the FTC estimates that if one figures in the amount of money businesses must spend on security software to stop the phishers, the damage to brand names, and the costs of mitigating customer complaints and litigation associated with insecure websites, the total increases to over $50 billion.

Card Credit Mobile Service Phishing occurs when a cyberthief sends an e-mail that contains a link to a fraudulent Web site where the users are asked to provide personal account information. The e-mail and Web site typically are disguised to appear to recipients as though they are from a trusted service provider, financial institution or online merchant.

- Cloudmark Inc., grade messaging security, today announced the results of a survey conducted on its behalf by YouGov, which revealed that public confidence in consumer brands is dramatically affected by phishing attacks, with 42% of people surveyed feeling that their trust in a brand would be greatly reduced if they received a phishing email claiming to be from that company. The survey also showed that the majority of consumers feel that the responsibility for protection against phishing attacks lies with themselves, their service provider and the service provider that transported the phishing emails.

Card Credit Discover Service The Gartner survey, completed in April, indicated a high rate of success for phishers. Based on survey data, Gartner estimates that about 19 percent of those attacked, or nearly 11 million U.S. adult Internet users, have clicked on the link in a phishing attack e-mail. Moreover, 3 percent of those attacked, or an estimated 1.78 million adults, report giving phishers their financial or personal information.

mails with links to fraudulent Web sites that imitate the look and feel of legitimate business sites. These phishing attacks lure recipients into divulging personal information such as credit card numbers, account usernames and passwords, social security numbers and more. Phishing Working Group, phishers are able to convince up to 5% known banks, online retailers and credit card companies.

Credit Public Service Union The data indicate that "phishing attack victims are almost three times as prone to identity-theft related fraud as other online consumers," Litan said. "Anyway you look at it, the crooks are achieving their goals with the execution of phishing attacks. Service providers have no choice but to combat these fraudulent e-mails if networked computing is to become more trusted as a favored channel for customer transactions."

In February 2003, the Federal Reserve Board (Fed) released a study concluding that changes were needed to improve the accuracy and completeness of the consumer data it contains.¹⁵⁷ What was noteworthy about this study was that the Fed did not set out to examine credit report accuracy. Instead, it originally sought to determine whether examining credit bureau data on consumers would increase the Fed's understanding of the nation's economic health. The Fed study was based upon a random sample of nearly 250, 000 ( identified) consumer credit histories provided by an unnamed credit bureau.

Card Credit Processing Service Emerging anti-phishing solutions, ranging from digitally signed e-mail to managed anti-phishing services, are among the technologies that will be discussed in future Gartner research notes.

Center Credit Service Union Gartner analysts will examine additional identity theft issues during the 10th Annual Gartner IT Security Summit, June 7-9, at the Marriott Wardman Park Hotel in Washington, D.C. This conference covers emerging security technologies, as well as policy, planning and compliance issues. For more details or to register for the Gartner IT Security Summit 2004, visit www.gartner.com/us/itsecurity or call 1-800-778-1997. Members of the media can register for the event by e-mailing Maria DiMasi at gartnerevents@eurorscg.com.

Card Credit Service Wireless About Gartner

Credit Security Service Union Gartner, Inc. (NYSE:IT) (NYSE:ITB) is the leading provider of research and analysis on the global information technology industry. Gartner serves more than 10,000 clients, including chief information officers and other senior IT executives in corporations and government agencies, as well as technology companies and the investment community. The Company focuses on delivering objective, in-depth analysis and actionable advice to enable clients to make more informed business and technology decisions. The Company's businesses consist of Gartner Intelligence, research and events for IT professionals; Gartner Executive Programs, membership programs and peer networking services; and Gartner Consulting, customized engagements with a specific emphasis on outsourcing and IT management. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, and has 3,700 associates, including more than 1,000 research analysts and consultants, in more than 75 locations worldwide. For more information, visit www.gartner.com.

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