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Why Corporations Need to Worry About Phishing
by: Paul Judge, CTO, CipherTrust, Inc.
Phishing is a relatively new form of online fraud that focuses on fooling the victim into providing sensitive financial or personal information to a bogus website that bears a significant resemblance to a tried and true online brand. Typically, the victim provides information into a form on the imposter site, which then relays the information to the fraudster.

To view examples of phishing emails go to:
* Citibank: www.ciphertrust.com/images/example_citibank.gif
* US Bank: www.ciphertrust.com/images/example_usbank.gif

Although this form of fraud is relatively new, its prevalence is exploding. From November 2003 to May 2004, Phishing attacks increased by 4000%. Compounding the issue of increasing volume, response rates for phishing attacks are disturbingly high, sometimes as high as 5%, and are most effective against new internet users who are less sophisticated about spotting potential fraud in their inbox.

Corporations should be concerned with the following four issues:
* Protecting employees from fraud
* Reassuring and educating customers
* Protecting their brand
* Preventing network intrusions and dissemination of trade secrets

A failure to succeed in any of these areas could be catastrophic to a company’s ability to function in the marketplace. If employees are not protected, the company could be held accountable for not putting protections in place to prevent fraud. If a hacker impersonates a company, then the company’s reputation and brand may be tarnished or ruined because customers feel that they can no longer trust the organization with their sensitive information. And finally, the latest trend in phishing has been to socially engineer employees or business partners to divulge sensitive trade secrets to hackers. The implications of employee login information getting into the wrong hands could result in grave consequences once hackers are able to “log in” to an employee’s network account using VPN or PC Anywhere software.

Protecting Employees from Phishing
One of the best ways to protect employees from Phishing is to prevent spam from ever getting to the user’s inbox. Since most phishing attacks proliferate through unsolicited e-mail, spam filtering technologies can be very effective at preventing the majority of phishing attempts.

New technologies are also available to help prevent phishing. One such technology offered as a standard by Microsoft and supported by CipherTrust is the Sender ID Framework (SIDF), which prevents spammers from obfuscating their IP address by verifying the source of each email.

Of course, spam filtering and SIDF cannot solve the problem entirely. Many phishing attacks are actually sent on an individual basis to users not protected by cutting edge spam detection technologies. Other attacks are distributed through online email accounts such as Yahoo! Mail, Gmail, MSN, and others. In short, technology alone cannot solve the phishing problem. Employees must be educated about phishing and how to spot fraudulent emails and websites.

Reassuring and Educating Customers
Once a consumer receives a fraudulent email that appears to come from a trusted company, he or she may never trust that company’s email communications again. That is damage that is not easily undone. It is essential that organizations communicate openly and frequently about how customers can identify legitimate email communications, and the need to report fraudulent ones. For those organizations that frequently process consumer credit card transactions, it is recommended that a special section of the site be devoted to helping customers avoid fraud.

Companies that make efforts to educate their customers about phishing are much less attractive targets than those who make no efforts at all. Some examples of organizations that have developed extensive policies around this issue are:
* USBank
* Wells Fargo Bank
* Ebay and PayPal
* Citibank

Protecting the Company Brand
Each time a phishing attack is launched, a legitimate company’s trademark is tarnished and brand equity is eroded. The more attacks a company suffers, the less consumers feel they can trust the company’s legitimate email communications or websites. The value of this trust is difficult to quantify – at least until a company begins to lose customers. When customers no longer trust the company’s ability to protect their personal information, they often defect to competitors or opt to use more expensive commercial options such as telesales or retail locations.

Clearly, the goal is to convince the fraudsters that your customers will not fall for the scam. This is why having an obvious anti-phishing program that is public for all to see can be very effective. The fraudsters tend to follow the path of least resistance. Seeing that customers are well informed of how to avoid phishing attacks, the perpetrators simply turn their attention to other “softer” targets.

Preventing Network Intrusions and Dissemination of Trade Secrets
Employees must be educated not only about phishing generally, but also about how fraudsters might use social engineering and other methods to entice employees to divulge sensitive information to hackers outside the organization.

With little knowledge of an organization’s business methods, hackers can easily distribute hundreds or even thousands of spoofed messages to an organization’s employees. The messages may ask for network passwords and usernames, or may attempt to fool employees into providing sensitive information to competitors.

It is important to properly train employees about what information is appropriate to share through email, and specifically what steps employees should take if they are unsure about the authenticity of a request for information.

Information gleaned by fraudsters from corporate networks can be used in a variety of nefarious ways. In the financial services industry, criminals can use credit cards to deduct money straight from accounts of unsuspecting victims. Many other organizations hold private healthcare information, or personal financial information that could be used by criminals to extort payoffs from corporations wishing to avoid the bad publicity of a security breach becoming public knowledge.

Though deflecting this attack does involve a significant amount of education, providing content filtering on outbound e-mail traffic can flag suspicious communications. Looking for these regular expressions, like social security numbers and account numbers, can prevent a simple deception from becoming a major liability issue.

What to Do If You Are the Victim of a Phishing Scam
If you become aware of fraudsters imitating your organization to commit phishing fraud, you should:

* Immediately educate your customers on how they can correctly identify the phish
* Notify the authorities of your situation. Phishing Fraudsters may have violated all or some of the following Federal Laws:
-- 18 U.S.C. 1028(a)(7) – Identity Theft
-- 18 U.S.C. 1343 – Wire Fraud
-- 18 U.S.C. 1029 – Credit-card Fraud
-- 18 U.S.C. 1344 – Bank Fraud
-- 18 U.S.C. 1030 (a)(4) – Computer Fraud
-- 18 U.S.C. 1037 – CAN-SPAM Act
-- 18 U.S.C. 1028(a)(5) – Damage to computer systems and files
* Prosecute the criminals – when Spammers use your trademarks to commit fraud, they are violating U.S. Trademark laws as well as anti-fraud laws. Your organization has the right to defend its mark in court.

If you find that you are personally the victim of a phishing scam, then you should identify what information was compromised and then:

* If the fraudster obtained your Bank Account, Credit, ATM or Debit Card information:
-- Report the theft to your card issuer, and cancel the account
-- Check your statements for any unauthorized charges and follow up with your financial institution regarding their procedures for minimizing your liability to the charges

* If the fraudster has obtained your personal identification information
-- Contact the credit reporting agencies:
* Experian
* Equifax
* Trans Union
-- Request that a fraud alert be placed on your record
-- Request a copy of your credit report and follow up on any unauthorized credit inquiries
-- Request that unauthorized credit inquiries be erased from your record
-- Notify your bank of potential fraud
-- File a police report with your local police department
-- File a report with the Social Security Administration
-- Notify the Department of Motor Vehicles and determine if an unauthorized driver’s license number has been issued in your name
-- Notify the Federal Trade Commission (www.ftc.gov)
-- File a complaint with the Internet Fraud Complaint Center (www.ifccfbi.gov/index.asp). Additional Internet Fraud Sites:
* www.cybercrime.gov
* www.consumer.gov/idtheft/
* www.identity-theft-help.us/
* www.identitytheft.org/
* www.usdoj.gov/criminal/fraud/idtheft.html
* www.usdoj.gov/criminal/fraud/idquiz.html
* www.ifccfbi.gov/index.asp



About the author:

Dr. Paul Judge is a noted scholar and entrepreneur. He is Chief Technology Officer at CipherTrust, the industry's largest provider of enterprise email security. The company’s flagship product, IronMail provides a best of breed defense against phishing attacks and other email-based threats. Learn more by visiting www.ciphertrust.com today.

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Tips to Build Your Email Address Database

WHY BUILD YOUR EMAIL ADDRESS DATABASE?

Gaining your customers' email addresses will:

  • Provide an additional channel for reaching your customers
  • Increase the ROI of your marketing investments
  • Significantly reduce your customer acquisition and marketing costs
  • Allow you to easily measure the impact of your marketing campaigns
  • Increase your customer participation and retention rates

With ongoing postal and telemarketing pressures impacting marketing budgets for many organizations this year, email marketing could become the "silver lining " for many marketers.   But how do you create a successful email marketing campaign if you do not have a substantial email database?  That question may be one of the largest Internet related challenges facing companies this year.

Research shows that the majority of organizations have email addresses for less than 10% of their postal files.  So how do you level the playing field and start to add quality permission - based email addresses to your database?

Here are some tips that you can use to cost effectively build your email address database and increase your customer participation and retention rates: 


START TO ASK FOR IT!  

Every communication or touch point with a customer should start or end with a request for an email address.   By utilizing the four points below, you should be able to add email addresses for 5% to 10% of your postal file over the course of one year.

1.  Direct Mail Collection

Think about how much time and money you spent for copy and design on your last new direct mail piece.  Most companies have started to ask their customers for their email address information within these mailings.  This is a great step forward. However, companies need to look at one major improvement if they want to increase their email address collection rates. 

To date, most requests for email address information have been pushed, shoved or jammed into whatever white space remains.  It should be no surprise that the success rate has been less than stellar.

To improve on these efforts, you need to provide your members with a reason to release their email addresses to you.  E-newsletters, purchase confirmations, petitions, and special discounts and offers are but a few of the benefits that will encourage your members to come on board.

2.  Web Page Collection

Many companies have an email address collection function in place via the web.  To improve your sign-up rates, add text below the email request box that informs your visitors of the special email benefits that they will receive (i.e. e-newsletters, purchase confirmations, delivery updates, etc.) upon registering.  You can also utilize a pop-up link to inform users of these special benefits.

Finally, your email address request function should be available on your home page. Don't make your users go and look for it.  Every click away from your home page reduces the chances of your users taking an action and providing you with their email address information.

3.  Existing Email Database Collection

Don't forget to ask the members of your existing customer base for email addresses of their friends, family and associates.  Viral marketing is a powerful tool to use and is extremely cost effective!  You could ask them either to provide you with additional addresses or simply to pass on your newsletter, email specific offers, or other information to others they feel have similar interests.

4.  Telemarketing Collection

Don't assume that your telemarketing agents are asking for email addresses from potential customers.  Ensure that your agents have an updated script, which outlines the previously described benefits to potential customers of providing their email addresses.

The suggestions above are a great start!  Yet they really should be viewed as a secondary plan for building your email database.  To exponentially and expeditiously grow your email database, please read on!


EMAIL APPENDING  

Utilizing an email appending service enables you to add email addresses for up to 25% of your postal file, all within 3-4 weeks.

Email Appending - is the process of adding an individual's email address to that individual's postal record in side your existing database.  This is accomplished by matching the postal database against a third party, permission based database of postal and email address information.

Best Practices - Email Appending is not a prospecting tool. The DMA (Direct Marketing Association) and its interactive arm AIM (Association of Interactive Marketing) have guidelines in place that dictate that email appending only be used to append email addresses to your existing opt-in postal record house file.

The Process - Your opt-in postal file is securely transferred to an email appending provider, who will do an initial gross email address match of your file against its opt-in database of postal and email address records.  Your appending provider will then send these matches a permission-based message prepared by you.  All bounces and opt-out requests will be removed from the list.  At that point a valid permission-based email address file of your customers will be delivered back to you. 

Cost - Less than the price of a postal stamp!


IN SUMMARY

The first step of any successful email marketing effort is to build a permission-based email address list of your customers.  The simplest, quickest and most cost-effective way to do this is through email appending, which will enable you to add email addresses for up to 25% of your postal file.  Secondary efforts of email address collection via focused direct mail, web, viral and telemarketing practices are also important and will enable you to add email addresses for an additional 5% to 10% of your base on an annual basis.

Best of luck in building your email address database.  As many companies have already learned, the ROI and cost savings to be achieved will far exceed your expectations.

Bill Kaplan
CEO
FreshAddress, Inc.

FreshAddress, Inc., The Email Address ExpertsTM, provides a comprehensive suite of industry leading database and email deliverability services to help companies increase their e-commerce revenues.  For more information on how we can help "Build and Update" your email list, visit http://freshaddress.com/biz or email biz@freshaddress.com.



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