New site spoofs PayPal to get billing information

The fake site is the latest of several "brand spoofing" scams

A new Web site spoofs the PayPal Inc. online payment site and attempts to trick PayPal customers into divulging sensitive account and billing information. The fake Web site is the latest example in what security experts say is a rising trend of "brand-spoofing" scams.

PayPal customers are directed to the site, www.paypal-billingnetwork.net, by an e-mail message that appears to come from the Mountain View, Calif., company. The message claims that due to a "recent system flush," the customer's billing and personal information is "temporaly unavailable" (sic).

Customers need to verify their identity by visiting the site or risk having their account canceled, according to the message, which is signed by "Jhon Krepp" from the "PayPal Billing Department." The actual site is almost identical to PayPal's real site, with the same graphics, layout and wording. In fact, many of the links on the site point back to the actual PayPal Web site.

PayPal couldn't be reached for comment about the scam site.

Adding to the ruse, visitors to the fake site are greeted with an authentic-sounding pop-up message. "We've worked hard to help make PayPal even better! However, we have to ask you to re-enter your Billing Information," the message reads in part. Visitors are asked to have their latest PayPal billing statement and credit cards handy before entering the site. PayPal members who don't enter their billing information will have their PayPal accounts canceled, according to the message.

After acknowledging this message, users are presented with a form that asks for a wide range of personal and financial information, including Social Security and driver's license numbers, date of birth, and credit card information.

Unlike much of the site, however, the form doesn't reside on PayPal's Web site, but on a server at a different IP address.

Paypal-billingnetwork.net is registered through Vancouver, Wash.-based Web hosting company Dotster Inc. Dotster didn't immediately respond to requests for comment.

The PayPal scam is just the latest example of brand spoofing, which security experts say is a growing problem.

Yesterday, e-mail filtering company SurfControl PLC in Scotts Valley, Calif., issued a warning about brand spoofing, saying it has noticed a jump since March in unsolicited e-mail messages tied to brand-spoofing scams. Like the most recent PayPal scam, the fraudulent e-mail messages pretend to be from customer service or security officials at well-known companies and direct the spam recipient to phony Web sites that harvest their confidential information, SurfControl said.

Because of its role as an online payments clearinghouse with a large user base, PayPal has long been the target of online criminals.

Recently, however, other high-profile companies have been the targets of brand spoofing, including Best Buy Co. (see story) and Discover Financial Services Inc.'s DiscoverCard (see story). Sony Electronics Inc., United Parcel Services Inc. and Bank of America Corp. have also been the targets of brand spoofing in the last few months, SurfControl said.

SurfControl didn't receive any brand-spoofing e-mail before March but has received more than five new examples each month since then, the company said. The proliferation of open proxy servers is largely responsible for the problem, SurfControl said.

Lists of the loosely managed or insecure proxy servers are freely available online, as are tools for locating open proxies, according to Susan Larson, vice president of global product content at SurfControl.

Spammers use the servers to forward large volumes of e-mail messages to recipients. An open proxy server will not only forward the e-mail messages, but will also insert its own Internet address in place of the original source information, effectively covering the spammer's tracks.

Working from lists of harvested e-mail addresses, spammers target high-profile companies, counting on the fact that a certain percentage of recipients will have a relationship with those companies, Larson said. Because of the low cost of sending spam and the huge sums that can be reaped by stealing someone's identity, only a small number of recipients need to fall for the ruse in order for the spammers to turn a profit.

Consumers' growing comfort with online retail is also partially to blame for the increase in brand-spoofing scams, according to Larson. "So many more people are trusting the Internet to do financial business, we're not as skeptical as we used to be about going out on the Internet and giving passwords or credit card numbers or bank account numbers," she said.

The Federal Trade Commission recently warned Internet users about the problem on its Web page.

The FTC recommends checking for "sloppy copy" such as spelling mistakes or grammatical errors in questionable solicitations. Consumers should also check with the company in question before providing any personal information on a Web site, the FTC said.

Copyright © 2003 IDG Communications, Inc.

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