What Is Cybersquatting and How To Protect Your Brand From It [+ 5 Tools]

Taking your business online opens new avenues for growth. You can serve multiple locations and cater to a large audience. But becoming a well-known brand online also makes you vulnerable to many cybercrimes that threat actors perpetuate to generate money, leveraging your brand’s goodwill.

And one such crime is cybersquatting. It can cause a loss of web traffic/revenue, damage your online presence, and affect your brand’s overall reputation.

What is cybersquatting precisely, how can you detect it, and what should you do if your brand is a victim of cybersquatting? Let’s find out.

What Is Cybersquatting?

Cybersquatting is an unethical act of registering, using, or selling domain names similar or confusingly identical to famous persons and organizations with the intention of profiting from the goodwill of original trademark owners. Threat actors also employ this practice to deliver malware payloads.

Cybersquatting, also known as domain squatting, became hugely popular in the early days of the Internet. Cybercriminals bought domain names of organizations, thinking that original brand owners would buy domain names from them later. And this happened too in many cases.

Cybersquatting is illegal due to the bad faith intent of web squatters, and there are laws and regulations to protect organizations from incidents of cybersquatting.

How Does Cybersquatting Work?

In a cybersquatting attack, a cybercriminal searches online to find a business that doesn’t have a website. Once they find such an organization, they register a domain with the name of the organization.

Later, when the organization decides to go online, it discovers that the domain name is unavailable. It has already been purchased by someone else.

When the organization reaches out to the threat actor to buy the domain name, they offer it at an unreasonably high price.

Suppose the organization owns the exact domain name. In that case, the threat actor can register a similar domain with a different top-level domain, expecting the original brand owner to contact them later to buy it.

A top-level domain name is the last part of a domain name. Some popular top-level domain names are .org, .eu, etc. So if an organization owns xyz.com, the threat actors can go for xyz.org or xyz.eu.

Sometimes, the threat actor doesn’t wait for the original brand owner to contact them to purchase a cybersquatted domain name. Instead, they build a website using the registered domain name to fulfill various malicious purposes.

For example, they can create a malicious website to trick users into downloading malware or sharing login credentials with the threat actor.

Threat actors also register confusingly similar domains to popular brand names, hoping that users will stumble on these domain squatting sites by typing incorrect addresses of those brands in their browser address bars.

And when users are on these fake websites, threat actors can steal their login credentials, deliver malware payload, serve malicious ads, execute phishing attacks, or fulfill various other malicious purposes.

Types of Cybersquatting

The following are key types of cybersquatting you should know about.

#1. Typosquatting

It is one of the most common types of cybersquatting. In typosquatting or URL hijacking, cybercriminals register misspelled domain names of famous brands with the intention of receiving traffic to fake websites they create.

Threat actors stage a typosquatting attack to redirect traffic to a competitor’s website, generate ad revenue, run phishing campaigns, install malware, and sell those typosquatted domain names at exorbitant prices.

#2. Identity Theft

A threat actor uses specialized tools to check the expiry of some specific domains. And if any domain owner forgets to renew their domain, the threat actor registers it and creates a fake website similar to the previous website. This can mislead visitors into believing that they are on the original website of the previous owner.

#3. Name Jacking

In this type of cybersquatting, cybercriminals register domain names using the real names of famous personalities.

It is difficult to fight this kind of cybersquatting as it is challenging to prove name jacking was done on purpose.

However, people can trademark their personal names in the US, which can be used as evidence against a web squatter.

#4. Reverse Cybersquatting

Reverse cybersquatting is also known as reverse domain hijacking. In this illegal practice, a threat actor first picks a site to target.

Then, they will register a company name with the same name mentioned in the domain in question, often offering different services.

After that, they claim that the original trademark owner is web squatting using their business name. And they try to take control of the website in question legally.

If the threat actor successfully takes control of the website, they will use it to fulfill their malicious purposes, leveraging the goodwill of the original domain name owner.

For example, you own abcxyz.com, offering toys online. A cybercriminal can register a business named ABC XYZ, offering consulting services. Then, they will accuse you of trademark infringement and try to take the domain name from you.

#5. Gripe Sites

In this type of cybersquatting practice, cybercriminals create URL squatting sites to ruin a company’s reputation, take personal revenge, or spread their extremist beliefs.

For example, you own xyz.com. A cybercriminal may create xyzsucks.com and publish content full of lies and propaganda to show you in a bad light.

It is legal to voice one’s opinion, but gripe sites often operate to run vicious propaganda.

Real-World Examples of Cybersquatting

Here are cybersquatting examples that made headlines.

• Dan Parisi, a New York businessman, registered madonna.com. After a legal battle, Dan Parisi had to transfer madonna.com to the pop star Madonna.
• Google won a case of cybersquatting against Jing Ren, who registered android.co.in. Android is owned by Google.
• People for the Ethical Treatment of Animals (PETA) won a case against Michael Doughney, who created a parody site-peta.com.
• Bytedance, the creator of the popular video-sharing platform Tiktok, won a case against two Australian friends who registered tiktok.com.
• Mr. Al Fayed, the owner of the Harrods department store, won control of 60 Harrods-related internet addresses.

Cybersquatting is on the rise. In 2022, the World Intellectual Property Organization (WIPO) received 7000 cases. So you should proactively check if your business is a victim of cybersquatting.

How To Detect Cybersquatting

It can be frustrating to see the domain you want to register to build your business website is not available. Even though you’re a trademark owner, the domain registrar says the domain in question is already taken. What would you do next?

First, fret not! Not all “domain taken” cases attribute to cybersquatting. Some can be genuine mistakes. The following is how you can figure out if your business is a victim of cybersquatting.

Check Where Domain Name Takes You

If the domain registrar returns your domain registration request with ‘this domain is taken,’ the next step is to check where the domain name takes you when you type the URL in your web browser.

In case you stumble upon the ‘this domain is for sale’ or ‘the site is under construction’ page, chances are a cybersquatter has taken the domain name.

However, the absence of a fully-functional website doesn’t always mean cybersquatting. The domain owner may have bought the domain in good faith and have a plan to build the website in the future.

If the URL opens a website that shows the ads of your products or the URL redirects you to your competitor’s website, it is likely to be a case of cybersquatting.

And if the URL opens a website active in another sector entirely different from yours, it can be a case of copyright infringement, not cybersquatting.

Cybersquatting also means someone can register a domain that is confusingly similar to your existing domain name. So, conduct online research to find out if your business has identical domains. You can use a tool like dnstwister to find such domains.

Reach Out to the Domain Name Registrant

When you suspect some domains have been registered in bad faith to profit from your business’s goodwill, you should contact those domain owners to find out if such domains are cybersquatting cases.

You will likely to find the domain owners’ names and email addresses on Who.is or Whois.com. Contact them to hear what they have to say about your objection.

How To Deal With Cybersquatting

If you’re a victim of cybersquatting, the following are your options to fight cybersquatting issues.

#1. Anticybersquatting Consumer Protection Act (ACPA)

Enacted in 1999, Anticybersquatting Consumer Protection Act empowers trademark owners to fight against cybersquatters who practice registering domain names in bad faith to profit from the goodwill of original trademark owners.

If you believe you have a cybersquatting case, you can take legal action against the alleged cybersquatter under this anti-cybersquatting legislation.

#2. Internet Corporation for Assigned Names and Numbers

Internet Corporation for Assigned Names and Numbers (ICANN) is a non-profit organization that coordinates the management of technical elements of the domain name system (DNS) to ensure universal resolvability. As a result, Internet users are able to find all valid addresses.

In a nutshell, ICANN is responsible for assigning domain names and ensuring domain name registrations are not abused.

You can appeal under its Uniform Domain-Name Dispute-Resolution Policy (often referred to as UDRP) if someone has registered a domain name in bad faith to profit from your goodwill.

If you win, the domain in question will be canceled or transferred to you.

Of these two methods to fight cybersquatting, UDRP proceedings are quicker, and you don’t need to hire a lawyer or attorney to initiate a UDRP complaint.

However, UDRP doesn’t offer any financial remedies. So if your brand has suffered a significant financial loss due to cybersquatting, taking legal action under Anticybersquatting Consumer Protection Act (ACPA) can be the right choice.

How Brands Can Prevent Cybersquatting

The following are some proven ways to protect your brand from various forms of cybersquatting.

#1. Trademark Your Business Name and Domain Name

Trademarking your business name and domain is the best strategy to protect from cybersquatting. Doing so will empower you to take the help of the Uniform Domain-Name Dispute-Resolution Policy (UDRP) or Anticybersquatting Consumer Protection Act (ACPA) to fight against cybersquatters.

Having your business name and domain name trademarked can also entitle you to receive compensation from cybersquatters if your business has suffered financially due to cybersquatting.

#2. Register Variations of Your Website Address

Purchasing domains with popular top-level domain variations and commonly misspelled spellings can prevent cyber criminals from buying these domains.

And if you redirect those domains to your original domain, users will reach your website if they type the wrong domain names you already own.

For example, you run xyz.com. You can also register xyz.org, xyz.net, and xyg.com and redirect these domains to xyz.com. As a result, users will reach xyz.com even if they type xyz.org or xyg.com accidentally. 

Indeed, buying multiple domains is not a cost-effective method. But if cybersquatting can damage your brand severely, it can be the right move to tackle cybersquatting.

You can do online research to buy cheap domain names.

#3. Set Your Domain on Auto-Renewal Mode

Cybersquatters search for domain names whose owners have forgotten to renew domain names. And then, they register such domains and steal the online identities of those brands.

So you must set your domain on auto-renewal mode to ensure your domain name is renewed timely before expiration.

#4. Invest in Anti-Cybersquatting Software

Domain-based cyberattacks are increasing day by day. So investing in the right security solution goes a long way towards protecting your business from bad actors.

Anti-Cybersquatting Tools

Here are a few tools that offer proven security:

#1. ZeroFox

ZeroFox offers you complete visibility and control over your domains. With ZeroFox, you can continuously monitor your domains, create alerts for threats like domain spoofing or cybersquatting, automate takedown disruptions actions, and much more.

#2. Custom Domain Protection for Cloudflare Registrar

Those who register domains with Cloudflare Registrar under the Enterprise Plan get custom domain protection that prevents domain hijacking.

Cloudflare Custom Domain Protection offers:

• Offline confirmation for all change requests
• Consistent use of locks for registrar and registry
• 2F authentication is enforced for all registrant accounts
• Plausibility check

These features ensure that threat actors cannot change your nameservers or registration data, protecting your business from domain hijacking.

#3. Red Points

If you want a specialized tool to fight brand impersonation, Red Points impersonation Protection software is a dependable solution. It allows you to detect impersonation in seconds with a bot-powered search and initiate takedown automatically. It also helps you monitor social media to discover brands that are impersonating your business.

#4. DomainTools Iris Detect

DomainTools Iris Detect allows you to discover and monitor lookalike domains to protect your brand.

With DomainTools Iris Detect, you can rapidly discover infringing domains, enforce actions for dangerous domains, monitor evolving infrastructure continuously, and much more.

#5. GreyMatter Digital Risk Protection (DRP) from ReliaQuest

If you want comprehensive protection for your business, GreyMatter Digital Risk Protection (DRP) is the right option. When someone imitates your brand, it gives you actionable insights with clear response steps, including mitigation recommendations.

How Website Visitors Can Avoid Cybersquatting

Here are some tips to avoid falling victim to cybersquatting:

• Check the URL in the browser address bar carefully to ensure you’re on a legitimate website.
• Official websites have a padlock sign. Be wary of staying on a website whose SSL certificate is expired.
• Websites having abundant pop-ups, ads, automatic downloads, and frequent—unnecessary—redirects tend to be malicious websites.
• If something seems too good to be true, high chances are it is not true. So don’t fall prey to irresistible offers/discounts. Never open suspicious email links, which often take users to phishing sites.
• Keep your operating system and software up-to-date to prevent malware on cybersquatting sites from exploiting vulnerabilities in old programs.

Last but not least, you should install a premium antivirus program on your device. An antivirus program can block malicious websites before they can do any harm to your device.

Conclusion

Cybersquatting is a serious cybersecurity issue. If you’re not careful about your online presence, cybersquatting websites can steal your web traffic and sales.

What’s worse, such websites create a negative perception of your brand in your customers’ minds. So take the necessary steps to prevent cybersquatting and protect your online identity.

To enhance security in your company, you can check these best online security software for small to medium businesses.