Cyber security intelligence provider VeriSign company iDefense, has released data indicating that hackers are on pace to unleash a record setting 6,191 keyloggers in 2005, a 65% increase on 2004.

Keyloggers are silently installed programs that record a victim’s keystrokes and sends them to hackers, putting tens of millions of Internet users’ finances, personal data and account information at risk.  Largely distributed by organised cyber theft groups, they are typically packaged with phishing emails or spyware, often eluding traditional security defenses like anti-virus software and firewalls.

“Keylogging is very effective method for hackers,” said Joe Payne, vice president, VeriSign iDefense security intelligence services.  “Fraudsters can launch hundreds of keylogging attacks around the world in seconds, gathering sensitive data to conduct large scale monetary transfers for their illegal activities.”

Once a keylogging program is activated, it provides hackers with personal data such as address, account numbers, mother’s maiden names or passwords – any strings of text a person might enter online.  Using this information to assume another’s identity, hackers run up charges averaging US$3,968 per victim, according to a Nationwide Mutual Insurance Co. survey.  16% of victims were required to pay for at least some of this fraud, and spent an average of 81 hours to resolve their cases, reported the survey.

Hackers rely on a variety of techniques, including internet relay chat and backdoor access to systems, to gather and filter logged keystrokes.  Some groups create and sell keylogging programs to identity thieves, while others sell the stolen data. Still, others obtain the data and execute the fraudulent transactions. 

“There are so many victims because so few know the risk or the early warning signs; you simply can’t stop what you can’t see,” said Payne.  “In addition to basic protection like up-to-date anti-virus programs and well configured firewalls, the best defense for keylogging is to carefully track the organisations and hackers who promulgate these programs.”