As perpetrators’ abilities grow, the sophistication and scale of the frauds and identity thefts are also increasing. The recent spate of so-called “phishing attacks” on U.K. banks and their online customers have opened peoples’ eyes to the increasing dangers of corporate identity theft(1). In those cases, the banks’ identities were usurped with “spoofed” emails that use HyperText Markup Language (HTML) to re-create the corporate identity and forge the sender’s address to look as if the message emanated from its own domain. The emails direct customers to bogus websites with URLs similar to official sites, where they are then encouraged to “re-register” their personal and financial information—enabling the perpetrators to collect vital data that can be used for fraud.
The tangible financial cost of these attacks is significant, with a Gartner Research survey of U.S. banks putting the average value of a fraudulent transaction at $6,795. Over time, however, the intangible costs of lost customer trust and damage to a business’s brand is likely far greater. With many people still sceptical of the security of online financial transactions, fragile confidence in an online business can be destroyed by the latest tactics of identity thieves. Identity theft is by no means an online-only phenomenon, however. The irony is that with the right technology in place, the online world offers one of the most secure environments for any financial transaction.
The efficiency of email and online communications, which makes them so attractive for legitimate e-business, makes them equally as attractive to spammers and cyber criminals. The victims who respond to phishing emails may be equally likely to respond to a fraudulent telephone call or letter. For cyber criminals, email offers the least-expensive way to bombard the target group and isolate those individuals who can be fooled.
If businesses wish to preserve the efficiency and value of email communications with customers, they need to look at ways to secure these communications channels from criminals attracted to the financial potential of the online world. The answer must lie in the use of secure messaging: using encryption and digital signatures to protect information and prove the authenticity of the message as well as the sender.
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