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Gangs flooding the Web for prey, analysts say

By Kevin Voigt
For CNN

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(CNN) -- On December 8, Australia suffered a sneak-attack from malevolent forces based in the former Soviet states. The weaponry was a multi-million fusillade of bogus e-mail touts targeting customers of iiNet, owner of Ozemail, one of the most popular Internet providers in the country.

The barrage overwhelmed company servers, which saw e-mail traffic spike from a daily average of 12 million messages to nearly 20 million -- 98 percent of which were spam -- and caused a 10-minute delay for users.

"We're seeing a lot of spam coming from China and Eastern Europe," says Greg Bader, chief information officer of iiNet. "They are organizations that are obviously very well set up and funded in order to release the volume of email they're pumping out."

Cybercrime is big business. The FBI estimates that computer-related crimes -- such as virus attacks and identity theft -- have cost companies and consumers $400 billion in the United States alone, according to a September report.

Disappearing are the days of high-profile attacks by teenage hackers motivated less by monetary gain than creating mayhem. Organized gangs now use "KGB-style tactics" to recruit programmers in universities to write software for high-tech crimes, according to a recent study by IT security firm McAfee.

As the talent pool grows, so do the tactics employed for computer crimes. The localized e-mail assault in Australia this month shows how cyber criminals now favor targeted attacks rather than widespread releases of malicious software, or "malware," such as the MyDoom computer worm which struck around the world in 2004.

In the past year, digital threats grew 163 percent, according a report by IT security company Trend Micro.

The company found a 15 percent increase this year in "botnet" attacks: a scheme where users unwittingly download software that turns their computer into a foot soldier of a zombie army, remotely controlled by criminals to deploy spam and virus attacks. Botnets are increasingly used in extortion threats to Internet operators -- often providers of pornographic and gambling Web sites -- to pay a ransom or face a server-crippling e-mail bombardment.

Experts predict that computers crimes involving mobile phones, instant messaging and trolling of community Web sites such as MySpace will be fast-growing threats in the new year.

"The growing number and the complexity of digital devices and pervasive connectivity is upping the ante," says Thomas Parenty, a Hong Kong-based information security consultant and author of the book, "Digital Fortress."

Parenty, a former programmer for the U.S. National Security Agency who worked to protect the American nuclear missile arsenal from hacker attack, says the best defense for computer users is a firewall and regularly updated anti-virus software.

"And there is no reason why anyone should be a victim of 'phishing,'" he says, referring to e-mails that masquerade as originating from a trustworthy business, such as a bank, to dupe recipients into sending passwords or other personal information.

"Think of it this way: if some guy in a business suit, claiming to be from Citibank, approached you on the street and said, 'There's a problem with your account, can I verify your ATM number and password?' I doubt you would give it to him," he says. "Apply that same judgment when you're on the Internet."

The real threat, Parenty says, is the growing number of cases of personal data stolen en masse from computer records of companies and public institutions. According to the Privacy Rights Clearinghouse, personal details of more than 100 million people have been publicly exposed -- either by accident or hacker attack -- in the past two years.

For example, hackers cracked into UCLA computers earlier this month and swiped records of 800,000 people.

"Once (personal information) leaves your hands, you never know how well it's going to be protected by others," Parenty says.

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