Microsoft Warns Of Scams Exploiting Economic Fears

e-mail phishing

Microsoft researchers warn that there are already indications that fraudsters are ramping up their tactics.

Tim Cranton, associate general counsel for Worldwide Internet Safety Programs at Microsoft, said in an e-mail interview that the trend was especially alarming in light of the current financial crisis. "In troubled financial times, there is the potential for increased risk as promises of easy money may become more alluring to some victims," he said.

In an attempt to capitalize on the credit crisis and people's growing financial insecurity, scammers have inundated users with fraudulent offers that range from mortgage refinancing and low interest loans to credit cards approvals.

That is—for a small fee.

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Some of the most common attacks include variations on the age old 411 scams, such as requests to move money out of a developing country. Victims are offered a cut of the alleged fortune if they agree to pay a release fee.

Or they are told they are the winners of a lottery jackpot, or are bequeathed a fortune from a dying person, and need only to pay a shipping or administration fee.

"Approximately 109 million people in the United States have received a phishing e-mail, with an estimated 3.6 million adults losing money to phishing attacks in the 12 months ending August 2007," Cranton said. "In these same 12 months, financial losses stemming from phishing attacks reached $3.2 billion (U.S.) in the United States alone."

In an effort to reduce the prevalence of these kinds of scams across the globe, Microsoft formed a coalition with Yahoo, Western Union and the African Development Bank to get the word out about hoax e-mails and lottery scams. Experts say that Internet "lottery scams" are among the most common form of advance fee fraud, in which the victim is deceived into paying money up front to receive a fictitious gift or cash prize.

"However, it is important to remember that lottery scams are only one form of phishing attacks," Cranton added.

In a recent poll, Microsoft found that more than a quarter of online users thought it was likely that they would become the victim of Internet fraud that would cost them money. And half said that the fear of Internet fraud made them wary when shopping online or conducing online transactions with financially sensitive information.

Cranton told Reuters that Microsoft has seen an increase in mortgage type scams, and expects those attacks to evolve in sophistication as the crisis worsens.

However, users are less likely to fall prey to e-mail attacks than they might think. Of the 5,000 people surveyed across Europe, only 113 -- or about one out of 44 -- had lost money to a cyber scam last year.