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Source: Financial Post

Posted on May 9, 2011

Canada is becoming a new breeding ground for cyber criminals, according to a report obtained by the Financial Post.

The number of Canadian servers found to be hosting phishing sites - malicious websites designed to lure visitors to enter sensitive personal information - jumped 319% over the past year, says the report to be released Tuesday from cyber-security firm Websense Inc. The rise is second only to Egypt, said Patrik Runald, senior security research man-ager at Websense.

"And Egypt obviously came from pretty much nowhere, so it is easy [for it] to have a higher percentage increase," Mr. Runald said. "In all the other [western] countries like the U.S., France, the U.K. and Germany the number of servers are going down, whereas in Canada, for some reason, it is going up."

Canada now sits just behind the United States globally in the number of servers hosting phishing sites, ahead of Germany, U.K. and France. Canada also experienced a 53% increase in bot networks, or automated hacking networks, the only country that showed an increase in botnets over the past eight months. In terms of overall cyber crime, the San Diego-based software company ranked Canada as the world's sixth-most common source, up from 13th in 2010.

Websense began investigating the state of Canadian cyber crime after high-profile attacks were launched against two Canadian federal government departments in February. The full details of the report will be released on Tuesday.

Although many of the hackers taking remote control of Canadian servers are likely to be operating from countries well known as breeding grounds for such activities -such as the Ukraine, Russia and China -Websense has thus far failed to pinpoint the source of the digital puppet masters. "It seems to be from all over the place," said Mr. Runald.

Websense says hackers may be shying away from the United States due to a series of recent cyber crackdowns.

The most recent bust happened last month, when U.S. law enforcement officials seized data servers in five states believed to have been a part of the infamous "Coreflood" botnet. Before it was shut down, the automated computer hacking network infected as many as two million computers around the world, stealing passwords and other user information in order to commit fraud and theft ranging into the millions of dollars. "We haven't really seen the same amount of activities from the Canadian authorities," said Mr. Runald.

The RCMP, whose Integrated Technological Crime Unit (ITCU) is responsible for "investigating computer crimes of national and international scope," declined to comment.

Avner Levin, director of the Privacy and Cyber Crime Institute at Ryerson University in Toronto, has not seen any dramatic growth in Canadian-based cyber crime through his own research, which he places on par with most other Western countries.

However, he conceded the Websense report might have shed light on what would prove to be a disturbing new trend. "It may be that this report is showing us stuff that is ahead of the curve and we need to see whether this would really be the case," Prof. Levin said. But Canada is "underresourced" when it comes to investigating acts of computer crime, he argued.

Jennifer Stoddart, Canada's privacy commissioner, just last week called for increased powers for her office to levy fines against companies that allow data security breaches.

If Fiaaz Walji can find any silver lining in this report, the Canada country manager for Websense believes it lies in Canada's inability to ignore such threats. "A country like Canada is more apt to share this information and do something about it," he said. "Compare that to other countries that sweep it under the carpet."

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