Before mid-2003, most phishing scams arrived in text-heavy e-mails. They were rife with spelling errors and poor grammar that tipped recipients off. But phishers are honing their writing and design skills, creating messages that are more difficult to discern as forgeries. Here is a brief timeline of the development of phishing:
E-mail fraudsters register dozens of lookalike domain names, such as yahoo-billing.com and ebay-fulfillment.com. They also create Web sites that contain the names of well-known companies and brands like microsoft.checkinfo.com.
Phishers embed Web site designs into their e-mails, complete with stolen logos from the targeted company and return addresses that are "spoofed" or faked so that they appear to come from the company.
Virus writers release "Mimail" e-mail worms targeting customers of the online payment service PayPal, an eBay subsidiary. The recipients are asked to update their credit card information via a Web page that closely mimics the design of PayPal's member services page. Later versions demand a Social Security number, date of birth and mother's maiden name -- three pieces of data that financial companies rely on most to verify their customers' identities.
New attacks include a link to a legitimate banking Web site in the background, but a fake "login" box placed in front of the real site. Experts say this method is particularly convincing because the legitimate site and the pop-up appear to be from the same source.
Reports of e-mail fraud and phishing attacks surge more than 400 percent over the holidays, according to the Anti-Phishing Working Group.