What is Phishing?

Phishing is a type of cybercrime. In a phishing attack, criminals, known as phishers, try to trick people into giving out private information. They pretend to be a company or person you can trust. The word 'phishing' is a different way to spell 'fishing'. This is because the criminals 'fish' for victims by sending many messages. They do this through different digital ways, like text messages, social media, phone calls, and most often, through emails that lie to you.

The rise of the digital age has unfortunately seen a parallel increase in the prevalence and sophistication of phishing attacks. According to a report from Cybersecurity Ventures, it's predicted that a business will fall victim to a ransomware attack—often initiated via a phishing email—every 11 seconds by the year 2021. This frequency signifies a nearly twofold increase from 2019, highlighting the rapidly growing threat.

The impact of phishing can be devastating. Beyond financial loss, victims often suffer damage to their reputations, loss of customer trust, and potential legal consequences due to data breaches. In 2020 alone, the FBI's Internet Crime Complaint Center reported losses exceeding $4.2 billion from cybercrimes, ranking phishing as the most common type of crime. In 2022, over 48% of emails sent were spam. In 2022, the average cost of a data breach against an organization was more than $4 million.

The purpose of this blog post is to arm you with knowledge. We aim to demystify phishing, guiding you through its various forms, how to recognize them, and most importantly, how to protect yourself and your organization. As the adage goes, 'knowledge is power'. In this context, knowledge is your best defense against the evolving threat that phishing poses.

In the subsequent sections, we'll dive into the details of phishing, covering its history, how to identify phishing attempts, and strategies to safeguard yourself from falling victim to these attacks. Let's navigate these murky waters together and ensure you don't get reeled in by the phishers.

What is Phishing Attack?

The history of phishing traces back to the 1990s, when internet usage began to skyrocket. The term 'phishing' was coined around 1996 by hackers stealing AOL accounts and passwords. The early phishing attacks were relatively simple, often leveraging fear and curiosity to deceive victims into giving up their details.

With the evolution of technology and increased online activity, phishing scams have evolved significantly. Phishers have become more sophisticated in their approach, crafting believable scams that often mirror the communications of trusted entities such as banks, service providers, and even coworkers. It is this constant evolution that makes phishing an ever-present and growing threat.

Learn what is phishing and how phishing attacks works from the below YouTube video.

The Anatomy of a Typical Phishing Email

To understand how to combat phishing, it's significant to recognize the anatomy of a typical phishing email. These elements often include:

Sender Information

Phishing emails often appear to come from a legitimate source. The 'From' line may display a name you recognize, such as a financial institution, service provider, or even a person you know. However, a closer look might reveal discrepancies, such as a misspelled domain name or a foreign email extension.

Message Content

The body of a phishing email often instills a sense of urgency, fear, or curiosity in the recipient. The message might claim that your account has been compromised, you've won a prize, or an invoice is due. Grammar and spelling errors can also be a sign of a phishing email, as these messages often originate from non-native English speakers.

Links and Attachments

Phishing emails frequently contain malicious links or attachments that lead to fake websites or download malware. These links often appear legitimate but may contain subtle misspellings or a different domain when hovered over with the cursor.

Various Types of Phishing Scams

Phishing comes in various forms, each with its unique approach:

Deceptive Phishing

The most common type, deceptive phishing, involves emails impersonating legitimate companies to steal user data. The emails trick recipients into entering their credentials on a counterfeit website.

Spear Phishing

Spear phishing is a targeted form of phishing where the attackers customize their approach for each victim, using personal information to make the email seem more authentic.

Whaling

Whaling attacks target high-profile individuals like CEOs or CFOs. Attackers usually do thorough research and impersonate senior management to trick the recipient into revealing sensitive information or transferring funds.

MFA Phishing

Multi-Factor Authentication (MFA) phishing attacks deceive users into revealing their MFA credentials on a fake site, which attackers promptly use on the real site to gain unauthorized access. This real time, time-sensitive attack mimics the MFA process to trick the user, despite MFA being a well-regarded security measure. The FBI has issued warnings about the increase in such scams, emphasizing the importance of user education, hardware-based authentication devices, and more sophisticated security measures like biometric authentication or behavioral pattern recognition.

Clone Phishing

In clone phishing, a legitimate email with an attachment or link is replicated with changed content or replaced link, making it appear it came from the original sender.

CEO Fraud

CEO fraud is a form of spear phishing where attackers pose as the CEO or another high-level executive and send an email to an employee with the authority to transfer money or send sensitive information.

Impact and Risks Associated with Phishing

The impacts of phishing are far-reaching and can be severely damaging. For individuals, it can lead to identity theft, financial loss, and a sense of personal violation. Businesses face financial penalties, data breaches, loss of customer trust, damage to brand reputation, and potential legal ramifications.

To conclude, understanding the basics of phishing is key to defending against it. By being able to identify phishing emails and understand their potential impacts, you'll be better equipped to prevent falling victim to these threats.

Detecting Phishing Attempts

Navigating the cyber world requires a careful and discerning eye, especially when it comes to the threats posed by phishing attacks. The key to staying safe online is the ability to recognize phishing attempts when they occur.

Common Signs of Phishing Emails

Knowing the common signs of phishing emails can significantly improve your defense against cyber threats.

Here are some red flags to look out for:

1. Urgency: Phishing emails often use scare tactics and create a sense of urgency to prompt immediate action. Phrases like "your account will be closed," or "your payment is overdue" are common.
2. Generic greetings: Phishing emails often use generic greetings such as "Dear Customer" instead of personalized greetings.
3. Suspicious email addresses: Even if the name appears familiar, check the email address. Look out for random strings of characters or slight misspellings in the domain name.
4. Poor grammar and spelling: While not always the case, many phishing emails contain grammatical errors and spelling mistakes.
5. Request for personal information: Legitimate companies typically don't ask for sensitive information over email.
6. Mismatched URLs: Hover over any links without clicking to see if the actual URL matches the one in the email.

Add to what you're learning here by watching our video. Watch our YouTube video below and learn how to analyze Discord phishing emails in real life.

Examples of Phishing Scams

Understanding how phishing scams work in practice can give you valuable insights into recognizing them.

Here are some phishing examples:

1. Bank phishing emails: These appear to come from your bank and often ask you to verify your account details or warn you about a security threat.
2. Tax phishing emails: These may claim to be from the IRS or a tax software company and typically appear during tax season. They usually request personal and financial information.
3. Delivery phishing emails: These mimic communication from delivery services like UPS, FedEx, or DHL, claiming there is an issue with a delivery and prompting you to click a link or download an attachment.

1. Linkedin Phishing Sample

2. Bank Phishing

3. Tax Phishing

4. UPS Phishing Sample

5. Insurance Phishing

Real-Life Phishing Incidents

To better understand the dynamics of a phishing scam, let's dissect some real-life examples that occurred:

1. Australian Securities and Investments Commission (ASIC) Email Server Breach (2021): In January 2021, the Australian corporate regulator reported a breach involving one of its servers used to transfer files including credit license applications where some attachments may have been viewed. The breach was linked to the software provider Accellion’s file transfer application and started with a successful phishing attack.
2. Microsoft Exchange Server Hafnium Attacks (2021): In the early months of 2021, a state-sponsored group named Hafnium exploited zero-day vulnerabilities in Microsoft Exchange Server to gain unauthorized access to user emails and install malware. The attackers initially used stolen passwords or phishing attacks to gain access to an Exchange Server with administrator privileges, then used the server vulnerabilities to deploy a web shell for remote control. The incident led to at least 30,000 organizations being compromised in the U.S. alone.
3. Norwegian Parliament (Stortinget) Email Breach (2021): In March 2021, Norway's national assembly suffered a cyberattack where threat actors accessed email accounts of several elected members and employees. This attack was initiated by a phishing email. The impact of the attack in terms of financial loss is still unclear, but it has had substantial geopolitical implications.
4. Facebook Scam Targeting Palestinian Users (2021): A hacking group used Facebook to distribute malicious Android applications to Palestinian users, leading to significant data theft. The attackers used phishing messages to trick users into installing these malicious applications. The cost of this attack is difficult to quantify, but it resulted in substantial personal data loss.
5. Capcom Data Breach (2020):The popular game developer Capcom suffered a ransomware attack that led to the theft of sensitive data of about 350,000 customers, business partners, and employees. The breach began with a phishing attack and the ransomware was a new variant of the Ragnar Locker ransomware. The incident led to substantial reputational damage and potential regulatory penalties.

Understanding the Technology Behind Phishing

As we delve deeper into the world of phishing, it's important to understand the technology and techniques that enable these deceptive practices. This knowledge will help empower you to better defend against phishing attempts and minimize their potential impact.

How to Create Phishing Emails

Phishers use various techniques to forge emails and make them appear as though they're from legitimate sources. The two primary methods are email spoofing and website cloning.

1. Email spoofing: This involves altering the email header so the message appears to come from somewhere other than the actual source. While email systems typically verify if a message is from the server it claims to be, phishers can get around these checks through a technique called SMTP (Simple Mail Transfer Protocol) relay, tricking the system into delivering the email.
2. Website cloning: Phishers often clone legitimate websites to fool victims into entering their credentials. The cloned sites look virtually identical to the real ones but are hosted on different servers. Any information entered on these clone sites is directly captured by the phishers.

Discussion of Malware Used in Phishing

Phishing isn't just about deceptive emails; it often involves malicious software, or malware, designed to infiltrate and damage computers without the user's consent. There are various types of malware used in phishing attacks:

1. Keyloggers: These record every keystroke you make on your keyboard, including usernames, passwords, and credit card numbers, which are then sent back to the phisher.
2. Trojans: These appear as legitimate software but perform hidden functions, such as compromising your system's security or transmitting your data to the phisher.
3. Ransomware: This malware encrypts the victim's files and demands a ransom to decrypt them. The initial infection often occurs via a phishing email.

Tracking and Capturing Data: The Profit-Making Mechanisms of Phishing Scams

The principal aim of phishing scams is to illicitly procure sensitive data to derive profits. To this end, phishers adopt numerous data tracking and capturing methodologies:

1. Cloned Site Data Capturing: As previously delineated, phishers mirror authentic websites to hoodwink victims into revealing their login details. Once these credentials are keyed in, the scammers capture this data and redirect it to themselves.
2. Deployment of Spyware: This category of malware camouflages itself on a user's computer, monitoring their activity and capturing data such as browsing patterns, keystrokes, and private information. This gathered data is then transmitted back to the phisher.
3. Data Trafficking: Frequently, the filched data, especially personal information, is sold in the dark web's underground markets, rendering the venture lucrative for phishers.
4. Financial Fraud: Often, phishers' ultimate objective is monetary gain. This is achieved through fraudulent transactions leveraging purloined credit card data or manipulating victims into effecting direct payments, as evidenced by CEO fraud and ransomware attacks.
5. Ransomware Attacks: In this sinister scheme, malware is used to encrypt a victim's data or block access to their system. The attackers then demand a ransom, typically in cryptocurrency, to restore access. The encryption is typically robust, leaving victims with few options but to pay, often resulting in significant financial losses. It's worth noting that even after payment, there's no guarantee that the attackers will honor their word and decrypt the data. Ransomware has been particularly prevalent in attacks against businesses and public institutions, causing not just financial losses, but significant disruption to operations and services.

Comprehending the technology that undergirds phishing is vital to detecting and thwarting these threats. Bear in mind that awareness and education form your foremost defense against phishing incursions. By staying abreast of phishers' tactics, you can always be one step ahead in safeguarding your invaluable information.

Protecting Yourself and Your Organization from Phishing

Information alone isn't enough to shield us from the insidious threat of phishing. We must encourage active participation and instill strong security behavior. So, what do we recommend for fortifying your defenses against these cyber attacks? Let's explore the proactive measures you can take to substantially diminish the odds of becoming a victim.

Building Security Culture

Building a security culture is vital in defending against phishing attacks. This entails leadership commitment, comprehensive training programs, engaging awareness campaigns, continuous education, encouraging reporting culture, simulated phishing exercises, and continuous evaluation and improvement. By fostering a security-oriented culture, organizations empower employees to be proactive in detecting and responding to phishing threats, bolstering overall cybersecurity defenses.

Steps to Take When You Receive a Potential Phishing Email

If you suspect an email might be a phishing attempt, follow these steps:

1. Don't panic: Phishers often rely on inducing fear or a sense of urgency. Stay calm and think clearly.
2. Don't click on links or download attachments: They could lead to harmful sites or contain malware.
3. Check the sender's details: Look for inconsistencies in the email address.
4. Report the email: Notify your IT department if you're at work, or report it to your email provider if you're at home.

Importance of Regular Software and System Updates

Regularly updating your software and system is important as many updates contain security patches that fix vulnerabilities that phishers and other cybercriminals could exploit.

Importance of Strong, Unique Passwords

Using strong, unique passwords for all your accounts is a vital step in securing your online presence. Consider using a password manager to keep track of them all. Also, change your passwords regularly, and immediately if you suspect they have been compromised.

Utilizing Multi-Factor Authentication

Multi-factor authentication (MFA) adds an extra layer of security by requiring additional verification beyond just a username and password. MFA could involve something you know (like a password), something you have (like a physical token or a phone), or something you are (like a fingerprint). Implementing MFA significantly reduces the risk of unauthorized access.

Phishing Awareness and Training

Even the best security measures can fail if users aren't aware of the risks and tactics associated with phishing. That's where Keepnet Labs' Phishing Simulator comes in. It offers comprehensive phishing awareness training, teaching users to recognize and report phishing attempts through interactive scenarios and real-world simulations. Try for free the Phishing Simulator, Awareness Educator or other email security products of Keepnet Labs or book a demo and see how this proactive approach significantly boosts your organization's cybersecurity posture.

Role of Spam Filters and Antivirus Software in Preventing Phishing

Spam filters can stop many phishing emails from reaching your inbox. Similarly, antivirus software can often detect and neutralize malicious attachments before they cause damage. Keep these systems up to date for maximum protection.

Incident Response Plan for Businesses

Despite all precautions, phishing attacks can still succeed. It's important for businesses to have an incident response plan in place. This plan should outline how to isolate affected systems, investigate the incident, notify affected parties, and recover data.

At Keepnet Labs, we understand that cybersecurity is a journey, not a destination. With our Phishing Simulator, Incident Responder along other email security products, we aim to help organizations navigate that journey, making the digital world a safer place for everyone.

Reporting and Recovering from a Phishing Attack

Encouraging employees to be an effective final line of defense for security and compliance is significant. Surprisingly, Gartner reports that nearly 60% of observed workplace misconduct goes unreported, despite the well-known principle that early reporting lowers risks.

This persistently low reporting rate remains a challenge for compliance officers and security leaders. Recognizing the prevalence of phishing as a top cybersecurity threat, many organizations deploy simulated phishing attacks to evaluate both click rates and incident reporting using established procedures. Results from a 2022 study by F-Secure involving four multinational companies and over 82,000 workers revealed that companies lacking user-friendly reporting mechanisms had an average reporting rate of less than 15%, while those equipped with a phishing reporting button achieved a 45% reporting rate.

Although tools like our Phishing Reporting can improve reporting percentages, there remains significant room for improvement in incident reporting, especially if an actual attack were to occur.

How and Where to Report Phishing Attempts

If you've identified a phishing attempt, it's important to report it. Here are some ways to do so:

1. Your workplace: If you're part of an organization and you received the phishing email at work, report it to your IT department.
2. Email provider:Most email providers have a 'report phishing' option.
3. Anti-Phishing Working Group (APWG): You can report phishing to the APWG by emailing reportphishing@apwg.org.
4. Federal Trade Commission (FTC): In the U.S., you can report phishing to the FTC at ftc.gov/complaint.
5. Phishing Reporter Add-in: Keepnet Labs offers organizations Phishing Reporter add-in to report suspicious emails to your IT team or Incident Responder product to analyze the Sender IP, Links, Attachments in the email within a minute with integrated security solutions.

Steps to Take if You've Fallen for a Phishing Scam

If you've fallen for a phishing scam:

1. Change your passwords: Do this immediately, starting with your email and any accounts that share the same password.
2. Monitor your accounts: Keep an eye on your financial accounts for unusual activity.
3. Contact the right people: Report the incident to your IT department if at work, or to your bank and credit card companies if personal information was involved.

Recovery Process and Damage Control

Post-incident recovery is about mitigating damage and preventing future attacks. Here's how to approach it:

1. Identify the scope: Understand what information was compromised and what the potential impacts could be.
2. Secure your systems: Update your software, run antivirus scans, and secure your accounts with new passwords.
3. Inform stakeholders: If customer data was compromised, inform those affected, advising them on steps to protect themselves.
4. Learn from the incident: Use the experience as a learning opportunity to strengthen your defenses.
5. Incident Responder: When a data breach occurs, minutes matter! Place a tool such as the Incident Responder product of Keepnet Labs where you can start an investigation on all user’s inboxes to find phishing emails and delete them from the user's inbox in minutes before other email users fall to the phishing email and damage the organization further.

At Keepnet Labs, our Phishing Simulator not only helps train your team to avoid phishing attacks but also provides detailed metrics to assess your organization's susceptibility, helping you make necessary adjustments.

Role of Cyber Insurance

Cyber insurance is becoming increasingly significant in 2024. It provides a financial safety net in the aftermath of cyberattacks, including phishing, covering costs like business disruption, data recovery, and crisis public relations.

Phishing threats are evolving, but with proper awareness, robust security measures, and the right tools like Keepnet Labs' Phishing Simulator, you can significantly enhance your defense against these cyber threats.

The Future of Phishing

As technology evolves, so do phishing strategies. Staying ahead requires not only understanding these emerging trends but also adapting and preparing for future threats.

Emerging Trends in Phishing Scams

Here are a few emerging trends in the world of phishing:

1. AI-powered phishing: Cybercriminals are starting to use artificial intelligence to create more convincing phishing attempts. For example, machine learning can be used to study the patterns in a person's writing style and mimic it convincingly.
2. Social media phishing: Phishing isn't limited to emails anymore. Cybercriminals are using social media platforms to launch phishing attacks, often disguised as messages from friends or familiar brands.
3. Smishing (SMS Phishing): This is another form of phishing where cybercriminals send deceptive text messages. The message often appears to come from a reputable source and encourages the recipient to share sensitive information or click on a link that leads to a malicious website. As the usage of smartphones continues to grow, the prevalence of smishing is expected to increase.
4. Voice Phishing: Voice phishing, also known as vishing, is a deceptive technique where cybercriminals make phone calls to extract sensitive information. Impersonating trusted entities, such as financial institutions or government agencies, attackers manipulate victims into revealing confidential data. These calls exploit social engineering tactics, leveraging voice manipulation techniques and playing on the victim's trust and compliance with perceived authority figures. To protect against voice phishing, individuals and organizations must educate themselves about warning signs during phone conversations. They should be cautious about unsolicited calls, verify caller identities independently, and refrain from sharing sensitive information unless absolutely necessary.
5. Toad (Telephone-Oriented Attack Delivery): Toad, or Telephone-Oriented Attack Delivery, refers to a social engineering attack that specifically targets individuals or organizations over the phone. In a Toad attack, the perpetrator poses as a legitimate representative, exploiting vulnerabilities and employing persuasive tactics to deceive victims. By impersonating trusted sources like banks or service providers, they manipulate victims into revealing sensitive information or performing actions that serve the attacker's interests. To protect against Toad attacks, individuals and organizations should adopt a skeptical mindset during phone conversations. They should question the caller's authenticity, avoid sharing sensitive information without verifying the purpose of the call, and educate themselves regularly to recognize and thwart these manipulative tactics.
6. Quishing: Quishing combines the tactics of voice communication with phishing, targeting individuals and organizations through deceptive phone calls. Attackers impersonate trusted sources, exploiting trust to manipulate victims into divulging sensitive information. Being cautious is important when sharing information over the phone, verifying the caller's identity independently, and recognizing that reputable organizations seldom request sensitive details via unsolicited calls. By staying cautious and informed, the risk of falling victim to quishing attacks can be significantly reduced.

Empower Your Organization with Keepnet Comprehensive Phishing Defense Solutions

Phishing attacks are one of the most persistent threats organizations face today. Keepnet offers a comprehensive suite of tools designed to help you take a proactive approach to these evolving challenges. Our Phishing, Smishing, and Vishing Simulators provide a practical, controlled environment to test your organization's resilience against email, SMS, and voice-based phishing attacks, helping you identify vulnerabilities before they become costly issues.

Alongside these simulators, our Security Awareness Training delivers ongoing, interactive training to ensure your employees are equipped to recognize and respond to these threats. By integrating simulations with consistent training, you foster a security-conscious culture that actively safeguards your organization.

To enhance your incident response capabilities, Keepnet's Incident Responder streamlines the process of reporting, analyzing, and containing phishing threats. With real-time alerts and in-depth analytics, your team can track incidents, detect patterns, and take preventive measures to minimize risks.

Keepnet’s solutions are designed to help you build a resilient defense against phishing attacks—without disrupting your workflow. If you're looking to strengthen your organization’s cybersecurity posture, we’re here to support you with tools and insights you can trust.

Watch the video below to learn more about Keepnet Human Risk Management Platform.

This blog post was updated in October 2024.