FTC issues report on Malicious Spam and Phishing

The Federal Trade Commission just released it's report on the current state of malicious spam and phishing in today's electronic world.

Interestingly enough, it points out that spammers are criminals.

While this isn't a new revelation, the report seems to want to drive that point home. Maybe this is part of the education process referred to at the bottom of this post?

Here is what the press release had to say:

During the workshop, panelists confirmed that spam has increasingly become a significant global vector for the dissemination of malware and the propagation of financial crimes. Panelists opined that, in most instances, the acts of malicious spammers are inherently criminal, and criminal law enforcement agencies are best suited to shut down their criminal operations.

The report discusses the problem of botnets at length and refers to a 2006 report stating that an estimated 12 million bot infected computers are being used to send spam. The report also states that most of these computers are physically located outside the United States.

Going deeper into the problem the report discusses a phenomenon called fast flux:

With fast flux, infected bot computers serve as proxies or hosts for malicious websites. The IP addresses for these sites are rotated regularly to evade discovery. For example, a phisher can deploy numerous and different IP addresses for a single phishing campaign, foiling the efforts of ISPs and law enforcement seeking to stop these campaigns by dismantling a single web site. Despite these challenges, the record reflects that at least one ISP does take proactive measures to detect and disconnect “fast flux” web sites from a portion of its network.

The report also acknowledges that DIY (do it yourself) crimeware kits are making it easy for just about anyone to mount a phishing campaign. One kit described sells for as little as $17.

Also cited are some statements from jailed bot-herders that botnets are being rented by the hour for $300-$700 an hour.

The report also give some statistical information on what this is costing all of us:

A survey by Consumer Reports reveals that viruses, phishing, and spyware resulted in over $7 billion in costs to U.S. consumers in 2007. The survey revealed further that computer infections prompted 850,000 U.S. households to replace their computers. The costs to businesses also are high. One panelist reported that 80 percent of 639 businesses it studied experienced cybercrime-related losses, totaling $130 million.

Also included in the report is information on Operation Bot Roast conducted by the FBI and Department of Justice.

Besides going after the criminal element, the report states that e-mail authentication is crucial in detecting spam at the ISP level so that it can be filtered out by existing spam filters.

Of greatest importance (call me a socialist) is that the report calls that a broader effort needs to be made to educate the public on the dangers of spam:

Consumer and business education can have a significant impact in the fight against spam and phishing. Because spam is an ever-evolving problem, stakeholders should revitalize efforts to educate consumers about how to protect their computers from online threats and improve methods for disseminating educational materials to consumers and businesses. In addition, the Summit identified consumer-interfacing tools such as spam reporting buttons as valuable tools for ISPs and reputation service providers. Accordingly, staff will encourage industry to continue to develop and fine-tune such tools.

In keeping with this theory, the FTC has three sites listed on the right side of the press release to educate the public about spam, FTC Spam site, OnGuard Online: Spam Scams and OnGuard Online: Phishing.

The full report can be viewed, here.