MarkMonitor Reports Recalled Toys Continue to Be Sold Online and Gift Card Scams Threaten Identities

SAN FRANCISCO--(BUSINESS WIRE)--MarkMonitor®, the global leader in enterprise brand protection, today released the Autumn 2007 Brandjacking Index™, exposing online holiday shopping risks that endanger consumers including the online sale of recalled toys and sophisticated gift card and phishing scams.

“As the holidays approach, buyers should be wary of online scammers and irresponsible vendors who are abusing reputable brands to make a profit”

The findings show that recalled toys continue to be available for sale on online auction sites and questionable e-commerce sites, as well as through business-to-business exchange sites that sell in bulk to online and brick-and-mortar retailers. Gift card scams demonstrate an ever-increasing level of sophistication in luring consumers to reveal identity information. Phishing attacks against retail and services brands jumped 1,100 percent since last quarter now representing 40 percent of all attacks.

“As the holidays approach, buyers should be wary of online scammers and irresponsible vendors who are abusing reputable brands to make a profit,” said Irfan Salim, president and chief executive officer of MarkMonitor. “The Internet has introduced a boundless, multi-jurisdictional playing field that regulatory and industry bodies cannot fully control. Ultimately, brandholders are responsible for protecting the consumers who trust their brands and their supply chains from fraudulent and questionable Internet practices.”

The quarterly MarkMonitor Brandjacking Index is an independent report that measures the effect of online threats to brands and investigates trends, including drilled-down analysis of how the most popular brands are abused online and the industries in which abuse is causing the most damage. In addition to ongoing tracking of 30 leading brands as identified by Interbrand, the autumn report includes a research focus on the online holiday shopping risks consumers face including the sale of recalled toys, abuse of top online retail brands and gift card scams.

The report’s analysis of online toy sales is based on nine popular toy brands including four toys recalled for lead paint or loose small parts. Retail brand and gift card abuse is based on four leading online retailers.

Following are select findings from the MarkMonitor Autumn 2007 Brandjacking Index:

Recalled toys, risky online channels, misdirecting e-commerce sites and questionable gift card offers put consumers’ safety and identities at risk while shopping online

30% of online auctions for toy brands that have experienced recalls continue to sell products after they have been recalled for lead paint or loose small parts.
83% of auction listings selling recalled toys ship from the U.S., more than all other countries combined. The United Kingdom is the second largest at 6%.
8% of business-to-business exchange site listings for toy brands that have experienced recalls continue to sell products after they have been recalled. Over one million toys are available on exchange sites on a given day.
Spam offers for retail gift cards lures consumers into providing sensitive personal information; Deep price discounts suggest stolen or counterfeit gift cards.
33% of paid search listings for the four major online retailers misdirect consumers to un-related, questionable sites.

Phishers are organizing into networks and using increasingly sophisticated tactics

Phish attacks against retail/services targets jumped 1,100 percent since last quarter; retail and auction sectors combined now make up 39 percent of all phishing attacks.
U.S. leads phish hosting countries with 25% of phishing web sites.
Phishers are using more automation, including rock phishing kits, to deploy and manage phishing sites.
Phish sites are becoming more resilient thanks to the increasing use of fast flux networks.
Phishing infrastructure-for-hire is on the rise, including botnet rentals and ISPs that target illicit activity.

Cybersquatting, domain kiting and pay-per-click abuse continue to exploit brands, evidence suggests seasonal brandjacking trends

On average 484,251 accounts of brand abuse were measured each week including 342,512 instances of cybersquatting, the registration of domain names containing a brand, slogan or trademark to which the registrant has no right. Instances of cybersquatting rose 19% for the year-to-date to 940,363.
Instances of domain kiting were down 48 percent in Q3 but still up 78 percent for 2007; with the recent decline likely related to increased litigation by brand holders.
Pay-per-click abuse declined 57 percent in Q3 and is down 37percent for 2007.

“The toy recall and gift card findings vividly demonstrate the contrast between how brands are protected in the Internet world vs. the physical,” said Frederick Felman, chief marketing officer for MarkMonitor. “Brand holders need to develop comprehensive and aggressive strategies to protect consumers who not only trust their names in stores, but in online venues as well. They also need to recognize the Internet has the potential to contaminate supply chains to brick and mortar vendors. If brand holders don’t move aggressively, they put their customers, reputations and revenues at risk.”

The cornerstone of the Brandjacking Index is the volume of public data analyzed by MarkMonitor using the company’s proprietary algorithms. The MarkMonitor Autumn 2007 Brandjacking Index searched approximately 134 million public domain records daily for abuse findings for Interbrand-ranked brands between July and September, 2007. Trends for recalled toys and gift card scams are based on analysis of billions of Web pages and 60 million e-mail solicitations (spam) captured over a four-week period in September including tens of thousands of unique landing pages and over 1,000 active domains daily. No customer data or proprietary customer information was used to create the Brandjacking Index.

Note to Editors

For complete Brandjacking Index results or more information concerning methodology, contact Te Smith at 831-818-1267 / te.smith@markmonitor.com or Jonathan Jordan at 202-370-6187 / jjordan@ar-edelman.com.

About MarkMonitor

MarkMonitor, the global leader in enterprise brand protection, offers comprehensive solutions and services that safeguard brands, reputation and revenue from online risks. With end-to-end solutions that address the growing threats of online fraud, brand abuse and unauthorized channels, MarkMonitor enables a secure Internet for businesses and their customers. The company’s exclusive access to data combined with its real-time prevention, detection and response capabilities provide wide-ranging protection to the ever-changing online risks faced by brands today. For more information, visit www.markmonitor.com.

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