- The Washington Times - Friday, June 18, 2004

The Federal Trade Commission has settled civil charges with two men accused of stealing consumers’ personal information by setting up fake Web sites designed to look like those of legitimate companies.

The commission said it accepted a $125,000 settlement with a teenager in New York and Zachary Keith Hill of Houston, who last month was sentenced to 46 months in jail for the common Internet scam known as “phishing.” The teenager was not named because he was under 18 when the complaint was filed in May.

In both cases, the FTC agreed to stay the financial judgments because the defendants said they were unable to pay.

Mr. Hill and the teenager were accused of sending e-mail messages pretending to come from America Online or PayPal. They directed consumers to Web sites that asked for information such as credit-card, Social Security and personal-identification numbers.

In some instances, the defendants were able to collect enough information to steal the consumers’ identity or make illegal purchases, according to the charges.

The settlements are the first for the FTC related to phishing scams, which rose from 402 in March to 1,125 in April, according to the nonprofit Anti-Phishing Working Group. The FTC announced this week it will work with Visa, the Better Business Bureau and consumer group Call for Action on a campaign to educate consumers about phishing scams and how to avoid them.

Visa said it would work with its member banks to insert educational brochures in credit-card statements, and the Better Business Bureau said it would publish articles in local newsletters and encourage merchants to link to antiphishing resources on their Web sites.

Call for Action said it would maintain a toll-free hot line, 866/ID-THEFT, with volunteers trained to help victims of identity theft.

All four organizations will publish information about phishing online, and advised consumers to protect their identities by never trusting an e-mail message that requests personal information. If a consumer is not clear about whether a message or Web site is legitimate, officials suggested they contact that company directly by phone.

“Many consumers are confused and perplexed by the e-mail they receive,” said Shirley Rooker, president of Call for Action. “What we’re seeing now are phishing scams that are very sophisticated.”

Government officials said the people who carry out phishing scams are hard to find because the phony Web sites are often only online for a short time. Furthermore, the e-mail directing people to the sites is sent in such a way that the origin is tough to discern.

The FTC said it will hold a summit this fall to discuss ways to authenticate where e-mail is originating.

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