[Infowarrior] - Consumer Reports: Viruses, Spyware Cost Users $7.8 Billion

[Richard Forno]

Viruses, Spyware Cost Users $7.8 Billion
Losses From Phishing Scams Up Fivefold Since the Previous Survey

By Kim Hart
Washington Post Staff Writer
Tuesday, August 8, 2006; Page D05
http://www.washingtonpost.com/wp-dyn/content/article/2006/08/07/AR2006080701
202.html

Consumers paid as much $7.8 billion over two years to repair or replace
computers that got infected with viruses and spyware, a Consumer Reports
survey found.

That figure was down from a similar survey a year ago. Still, it suggests
that people are paying large sums to cope with the flood of malicious
viruses and other programs that can slow computers or render them
inoperable.
 
"There is a very high national cost to this," said Jeff Fox, technology
editor of the consumer magazine. "People think they're invincible, even when
this kind of money is involved."

In a nationwide survey, the magazine found that unwanted commercial e-mail,
known as spam, is the biggest computer-security problem. But viruses are the
most expensive, with people paying $5.2 billion in 2004 and 2005 to repair
or replace afflicted machines, the survey found.

Infections of spyware, a type of software that can track computer users'
habits or collect sensitive information about them, declined slightly in the
past six months, the survey found. But such infections caused almost 1
million U.S. households to replace their computers, the survey found.

Losses from phishing scams, which are fake e-mails and Web pages that
request sensitive data such as bank-account passwords, increased five-fold
from the previous survey, with people telling the magazine that such scams
cost them $630 million in 2004 and 2005. That's an average loss of $850 per
incident.

"Phishing scams are worse than they've ever been," Fox said. "The bad guys
are getting very sophisticated."

Some experts caution, however, that surveys in which people are asked about
financial losses can produce overestimates.

"The numbers could possibly be inflated by the way the questions are
phrased, especially in an area in which most people aren't very articulate,"
said Robert Lichter, who runs a statistical center at George Mason
University. "The people surveyed may have a very vague sense of what these
things are."

Other organizations that monitor Internet fraud complaints also point to
growth in cybercrime. Internet-related complaints made up nearly half of all
fraud complaints received by the Federal Trade Commission in 2005, with
people claiming losses of $335 million.

And financial losses reported to the Internet Crime Complaint Center, a
joint effort of the FBI and the National White Collar Crime Center, tripled
in 2005, to $183 million, compared with the previous year.

"It's hard to tell who's losing the money -- the insurance company, the
credit card company or the consumer -- but it's coming out of someone's
pockets," said Dan Hubbard, vice president of security and research for
Websense Inc.

While attacks used to be mostly nuisances, they have become more
threatening, said Dave Cole, director of security response at Symantec
Corp., a leading computer security company. Many of today's spam and
phishing attacks target consumers' personal information with the intention
of stealing money or in some cases, identities.

"There's a level of invasiveness a lot of people wouldn't expect," he said.

The Consumer Reports survey of 2,000 households found that 20 percent of
respondents didn't have antivirus software and that 35 percent didn't use
spyware-blocking software. As the Internet gains more users, it's important
to educate them on the security risks, Cole said.

The survey results are to be published in the September issue of Consumer
Reports.