Microsoft files 117 phishing lawsuits

It hopes to identify who is behind large-scale scam operations

Microsoft Corp. today filed 117 civil lawsuits against alleged phishers trying to scam Microsoft customers out of personal information such as credit card numbers.

The lawsuits, filed in U.S. District Court for the Western District of Washington, seek to identify large-scale scam operations and recover damages from so-called phishing operations. Phishers typically send out spam e-mail that's made to look like an official message from a real company asking recipients to click on a link and update their personal information. The link takes consumers to a Web page that looks like real company's site but actually collects personal information for identity thieves to use.

The new phishing lawsuits -- Microsoft had previously filed lawsuits targeting two other phishing schemes -- cite unnamed defendants who sent spam e-mail and created Web sites targeting Microsoft services such as MSN and Hotmail, Aaron Kornblum, Microsoft's Internet safety attorney, said at a Washington, D.C., news conference. Through the lawsuits, Microsoft will issue subpoenas and attempt to uncover the names of the scam artists, as well as identify support operations such as Web hosting services and mass e-mail services, he said.

Microsoft is using trademark law to target the phishers, who use the company's trademarks on their e-mail messages and Web sites, he said.

Asked if Microsoft expected to identify the creators of all 117 phishing schemes, Kornblum said the company hopes to find as many as possible. In a phishing lawsuit that the company filed in October 2003, it took several months to identify a suspect, but Microsoft eventually obtained a $3 million default judgment against an Iowa man.

"Will we catch all 117?" Kornblum said. "I don't know. It'll definitely be a learning experience."

Microsoft said it has taken action to shut down more than 1,700 phishing operations targeting its services since January 2004.

In addition to the phishing lawsuits, Microsoft joined forces with the U.S. Federal Trade Commission and the National Consumers League to educate consumers about phishing attacks. The groups showed examples of e-mail phishing attacks at the news conference, and Susan Grant, vice president and public policy director of the National Consumers League, noted that her organization has heard reports of telephone phishing schemes.

Gartner Inc. in 2004 estimated phishing cost consumers $2 billion a year, and the phenomenon seems to be growing, said Jacqueline Beauchere, business strategy manager at Microsoft. She called phishing the "international cybercrime of choice" in recent years.

In February, Sen. Patrick Leahy (D-Vt.) introduced the Anti-Phishing Act of 2005, which prohibits Web pages set up to look like the sites of legitimate businesses in an effort to induce victims to divulge personal information (see story). The bill would also outlaw the creation of an e-mail that does the same thing, with penalties of up to five years in prison, plus fines.

Kornblum called phishing legislation "critical" to helping law enforcement agencies go after scam artists. "Seeing a phisher in an orange [prison] jumpsuit is an image I'd very much like to see," he said.

Among the telltale signs of a phishing e-mail, according Beauchere:

  • Phishing e-mails ask people to provide personal information such as credit card numbers, but legitimate companies generally don't send e-mail messages asking their customers to do that.
  • Phishing e-mails often have spelling or grammatical errors.
  • Phishing e-mails often threaten recipients with immediate penalties such as a deactivation of their accounts if they don't respond. Legitimate businesses generally don't issue such urgent pleas.
  • Links in phishing e-mails often contain a legitimate Web address, such as, followed by an @ symbol and another Web address. Most browsers don't recognize the characters before the @ symbol, so a link that started with wouldn't go to

While technology companies such as Microsoft have a responsibility to protect consumers, individual Internet users also need to educate themselves about online risks, said Lydia Parnes, acting director of the FTC's Bureau of Consumer Protection. "Consumers actually need to be responsible," she said. "People don't leave their doors open when they leave the house."

The FTC has more tips for consumers about phishing online.

Copyright © 2005 IDG Communications, Inc.

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