Internet scams still snare U.S. consumers, survey indicates

By PAUL WENSKE
The Kansas City Star

http://www.kansascity.com/business/story/227322.html

U.S. consumers lost more than $7 billion in the last two years to viruses, spyware and phishing schemes, according to a new Consumer Reports survey.

The magazine’s “State of the Net” survey also projects that as many as 1 million U.S. consumers accounted for those billions in dollars lost to scams.

The survey showed that heightened awareness by consumers and more crackdowns by law enforcement have had positive effects in slightly reducing the number of people scammed.

Still, consumers face a 1 in 4 chance of becoming a cybervictim and the number of consumers who respond to e-mail phishing scams has remained constant at 8 percent.

“It would be too early to call off the dogs or say the coast is clear,” said Jeff Fox, technology editor for Consumer Reports, which is published by Consumers Union.

“The criminals are proliferating and they are outracing law enforcement,” said Fox, referring to an in-depth article accompanying the survey in the magazine’s September issue now at news stands.

The survey notes a growing concern for youngsters at risk on social networks such as MySpace and Facebook. In households with minors online, 13 percent of the children registered on MySpace were younger then 14, the minimum age the site officially allows. Three percent were younger than 10.

The survey was conducted by the magazine’s National Research Center among a nationally representative sample of more than 2,000 households with Internet access. The full survey can be accessed at www.consumerreports.org. The survey also includes tips related to online safety.

One area that has significantly increased, Fox said, is the number of phishing scams.

Despite widespread warnings, these scams, often in the form of a bogus e-mail from a bank warning of a security breach and asking for personal information, continue to proliferate.

“A lot of people are still falling for these things,” Fox said. “It’s an indication that we have to keep up with the education.

“You have to be direct, if you get any e-mail supposedly from a financial institution sending you to a Web site, don’t respond!” he said. “These are frauds.”

He said one of the more astounding net frauds involve rings that use spam to infiltrate and burrow deep into consumers’ home computers. Software is triggered when a consumer opens a phony attachment, which can look like a birthday greeting or a pdf file. The software takes control of the consumer’s computer.

This so-called “zombie” computer can be used by scam artists to send out thousands more pieces of spam. Virtual networks of these “zombie” computers have been formed that churn out spam while hiding the scam artists from detection. “They are shepherding thousands of computers,” Fox said.

According to the magazine’s research, spam increased by 161 percent from last September through June and now represents 94 percent of e-mail.

Fox said the survey’s findings illustrate the importance of anti-virus and anti-spyware software, which is fairly inexpensive.

At the same time, the survey found 33 percent of respondents did not use software to block or remove spyware. The September issue of the magazine rates software.