Phishing is a method of stealing login info (usernames and passwords) by directing the victim to a clone (fake) login page, that logs the login info without the knowledge of the victim. Such clone website is known as a phisher. eBay, PayPal and other online banks are common targets. Phishing is an example of social engineering techniques used to fool users. Attempts to deal with the growing number of reported phishing incidents include legislation, user training, public awareness, and technical measures.
Recent phishing attempts have targeted the customers of banks and online payment services. Social networking sites such as Orkut are also a target of phishing.
Spoofed/Fraudulent e-mails are the most widely used tools to carry out the phishing attack. In most cases we get a fake e-mail that appears to have come from a Trusted Website . Here the hacker may request us to verify username & password by replaying to a given email address.
How to protect yourself against phishing?
Use your login info in the correct places only.
Don't ever put your login info anywhere else than the page you registered to, unless it's a trusted service, such as youtube or blogger, asking for your google account's info).
Make sure the website you're logging in isn't fake.
Whenever you login to a website, if you didn't type the URL (address) of the website yourself, i.e. if you clicked a link that led you to the login page (from message, website, search engine results), always check the url (address) to see if you're in the right place.
For instance, if you're logging in your facebook account, make sure the url appears as http://www.facebook.com/
Where a phisher page would look like http://www.facebook.freewebs.com/, or http://www.facebook.spam.com/, or any url whose part before the .com isn't exactly the same as the page you want to login to.
Make sure the links you're clicking aren't fake.
Whenever you're clicking a link, check where the link goes before clicking it. Links can be masked to appear as something else than the page they're leading to. For example, www.google.com leads to yahoo instead of google. Fortunately, in most browsers, whenever you point your mouse cursor over the link, the true location of the link is displayed on the bottom left part of the screen.
This is particularly important because it can protect you from another, rarer but more dangerous method called cookie stealing, which is basically automatically stealing your account if you're previously logged in the website.
Know that links to phishing pages are usually spread via email, and often represent impersonating trusted services and persons, such as making the email appear as it's sent from the website you've registered to, or a friend of yours whose account has been compromised.
What to do if you have spotted a phisher?
Report the phisher as soon as you can. Report the phisher's address here: http://www.google.com/safebrowsing/report_phish/
If the phishing attempt has been done via message, report the message in any of the following services:
http://www.reportphish.org/forwardphish.php
http://www.us-cert.gov/nav/report_phishing.html
If you received the message from a friend's compromised account, inform your friend, and other friends that might be in danger.
If possible, inform the admin of the website that the phisher is made for.
So the Bottom line to defend from phishing attack is
1. Never assume that an email is valid based on the sender’s email address.
2. A trusted bank/organization such as paypal will never ask you for your full name and password in a PayPal email.
3. An email from trusted organization will never contain attachments or software.
4. Clicking on a link in an email is the most insecure way to get to your account.
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