Consumer Loss from Phishing Fraud to Reach $500 Million

A recent national study conducted by Ponemon Institute and sponsored by TRUSTe, an online privacy nonprofit organization and NACHA, an electronic payments association, revealed that 76 percent of consumers are experiencing an increase in spoofing and phishing incidents and that 35 percent receive fake e-mails at least once a week. The report estimates the nation's total monetary loss to victims of these incidents at approximately $500 million.

Based on a national sample of 1,335 Internet users across the United States, seven out of ten respondents revealed that they have unintentionally visited a spoofed Web site and more than 15 percent of spoofed respondents admit to being phished, providing sensitive private information including credit card numbers, checking account information and Social Security number.

In total, a little more than two percent of all respondents believe that they experienced a direct monetary loss resulting from a phishing attack. Most people recognized this loss within the first two weeks after being phished.

Online consumers have become more skeptical about e-mail and Web sites as a result of their unpleasant experiences with phishing and want to see action taken to address the problem. Sixty-four percent of respondents surveyed believe that it is unacceptable for organizations to do nothing about spoofing and phishing, and 96 percent want companies to consider new technologies to help authenticate e-mail and online sites. Internet users are also interested in having organizations work with law enforcement to shut down the spoofers before they strike.

Ponemon Institute and TRUSTe will present today's survey findings and issue a call to action before the Anti-Phishing Working Group in Washington, D.C. The organization will advocate the creation of a consumer education campaign to reduce website and e-mail fraud.

"Consumers should be cautious when disclosing sensitive information unless they have proactively initiated the online transaction," said Fran Maier, president and executive director of TRUSTe. "This simple consumer protection message needs to be conveyed through a broader consumer education campaign."

"This is the first study to objectively estimate the impact of phishing and spoofing on American consumers," said Dr. Larry Ponemon, founder and chairman of Ponemon Institute. "As we become more educated on the problem, organizations will be better equipped to develop strategies to address these issues."

To file an online privacy complaint, visit the TRUSTe's consumer Watchdog site at www.truste.org. For more information about the survey, please contact Ponemon Institute at research@ponemon.org.

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