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updated 2/28/2005 10:55:06 PM ET 2005-03-01T03:55:06

Vietnam and Romania joined the United States at the top of the league of countries generating the largest amounts of Internet fraud over the recent Christmas holiday period, a study said on Monday.

The two countries are new entrants to the list, part of a quarterly report by VeriSign, the U.S.-based Internet security company and Web site registrar.

Hong Kong and Sweden were also identified for the first time as generating significant amounts of fraudulent Internet transactions. In contrast, Indonesia, Israel, India, Nigeria and Malaysia, which topped the league in December 2003, were absent this time.

The shift is thought to reflect the increasing penetration of high-speed Internet access in countries such as Vietnam and Romania.

In many cases the new Internet service providers in these countries are less well protected against abuses, creating opportunities that fraudsters can exploit.

The study also found that sites used in "phishing" attacks were increasingly being hosted outside the United States.

"Phishing" is a rising type of Internet fraud in which internet users are lured to a bogus website purporting to be the official website of their bank, for example and tricked into revealing account or credit card details.

In the first half of last year only 37 per cent of the "phishing" sites monitored by VeriSign were outside the United States, but this had grown to 58 per cent by December.

South Korea is the most popular location for these sites after the United States, accounting for 7.3 per cent of the total. Germany is third on the list, accounting for 5.8 per cent.

Fraudsters were increasingly moving to host their "phishing" sites in diverse countries, VeriSign said, as it was generally more difficult for authorities to shut down sites that were hosted outside their borders.

In response, several governments are concluding bilateral agreements to collaborate on Internet fraud.

The UK has a memorandum of understanding with Canada on consumer-related Internet scams and is understood to be close to signing similar accords with Japan, the US and South Korea.

Copyright The Financial Times Ltd. All rights reserved.

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