Despite reports suggesting that phishing activity declined earlier this year, one company’s research – checking millions of websites – claims levels have not been this high since 2007 and online drug brand abuse in particular is rising.

Enterprise brand protection company MarkMonitor, releasing its international summer ‘brandjacking’ index, says the online pharmaceutical market has been growing rapidly this year – but so have the scams.

Frederick Felman, chief marketing officer at MarkMonitor, said: “Scammers are opportunists and by targeting the supply chain they’re positioning themselves to move the greatest amount of fake products they can. This maximises their return on the scam but it also poses a potential danger to peoples’ health and safety, not to mention brand reputation.”

As more people try to save money when purchasing medication and lifestyle drugs and companies look to streamline operations, especially in the current economy, the cost savings and efficiencies of e-commerce become even more attractive, presenting an opportunity for online fraud and brand abuse on both the supply and demand side of the equation.

According to MarkMonitor, online pharmacies have increased their market footprint, growing to an estimated $11 billion in sales in 2009, up from an estimated $4 billion in 2007.

The online supply chain – listings on B2B exchange sites – shows strong signs of growth for bulk quantities of pills and active pharmaceutical ingredients in powder form, increasing 23 per cent in 2009 from 2008. Listings for pharmaceuticals have grown 67 per cent on B2B exchange sites since 2007, when MarkMonitor completed its first study of pharmaceutical brandjacking online.

To complete the study, MarkMonitor chose six leading prescription drug brands and examined nearly 20,000 instances of cybersquatting – the practice of abusing trademarks within the domain name system – 3,000 online pharmacies and 652 B2B exchange listings for those brands during July 2009.

The Brandjacking Index also examined phishing trends for Q2 2009, revealing record levels of phishing attacks and attacks per organisation. Payment services continue to be a popular target, representing 49 per cent of the total number of phishing attacks in Q2 2009, up from 42 per cent in Q1 2009. Social networks have also showed substantial increases in phishing attacks, increasing 168 per cent from Q2 2008 to Q2 2009.

The report’s findings include:
 
Pharmaceutical brandjacking continues to grow

• B2B exchange listings for bulk quantities of pills and active pharmaceutical ingredients (APIs) grew by 23 per cent in 2009 compared to 2008. The 652 listings that MarkMonitor identified represented an increase of 67 per cent from the first study conducted in 2007.
• The number of B2B exchange listings selling APIs in powdered form grew by 81 per cent from the previous year, to 416 listings. This indicates a thriving trade in bulk quantities of ingredients as well as in pills.
• Ninety per cent of the exchange listings indicated a country of origin for their products. China led the list at 49 per cent, followed by India at 17 per cent.
• Of the 2,930 online pharmacies MarkMonitor found in this study, only four were certified in the VIPPS programme by the National Association of Boards of Pharmacy, the governing body for US pharmacies.
• Thirty-six per cent of online pharmacies are hosted in the United States, the largest number in the world, while Germany is the second largest hosting country with 13 per cent. The UK’s share of hosted pharmacies dropped to seven per cent in 2009, from 12 per cent in the previous year.
• The number of websites cybersquatting on the six pharmaceutical brands used in the study reached an all-time high with 19,163 domains, up nine per cent from the previous year. Seventy-five per cent of the cybersquatted pharmaceutical brands were lifestyle drugs.

Phishing attacks reach record levels

• During Q2 2009, phishing attacks reached record levels with more than 151,000 unique attacks.
• The average number of phishing attacks per organisation also increased to record levels, with 351 attacks per organisation, on average, in Q2 2009.
• Social networking attacks continued to rise significantly, recording a 168 per cent increase from the same period in 2008.
• Brands in the financial and payment services industries are the most heavily-targeted industry categories for phishers, constituting 80 per cent of all phish attacks in Q2 2009.
• The United States hosts the largest number of phishing attacks with 50 per cent of the total recorded in Q2 2009.