Digital Squatting: Why’s It Becoming a Big Issue

Guest Editorial by Vaidotas Juknys, Chief Commercial Officer, Decodo

In 2025, the World Intellectual Property Organization handled a record 6,200 domain name disputes, the highest total in its history. Cybersquatting cases have risen 68% since the pandemic began. For financial institutions serving various individuals and organizations, this trend represents far more than a trademark nuisance. It poses a direct threat to member trust, institutional reputation, and the security of the people who depend on us.

Domain squatters have evolved their tactics. They register website addresses that closely mimic legitimate companies, adding a hyphen, swapping a letter, or using alternative domain extensions like .org or .net instead of .com. These fraudulent sites often appear nearly identical to the real thing. Members searching for their credit union online may land on an impostor page without realizing it. From there, they enter login credentials, provide personal information, or even initiate transactions, all captured by criminals who have no intention of delivering any service.

The Credit Union Take

Credit unions face particular vulnerability here. Unlike large national banks with dedicated cybersecurity teams and substantial legal budgets, many credit unions operate with leaner resources. Yet their members place extraordinary trust in them, often more than they would in a faceless megabank. When a scammer exploits that trust through a lookalike domain, the damage extends beyond the immediate financial loss. It erodes the relationship that credit unions have spent decades building.

The techniques criminals use have grown sophisticated. Typosquatting exploits common keyboard mistakes, such as registering "credituniom.com" instead of "creditunion.com." Homograph attacks substitute visually identical characters from different alphabets, making fraudulent URLs nearly impossible to distinguish from legitimate ones. Combosquatting adds plausible keywords, creating domains like "firstcreditunion-login.com" or "memberservices-fcu.com" that appear official to unsuspecting members.

The financial stakes are substantial. Phishing attacks, often enabled by squatted domains, cost organizations millions per incident. For a credit union, a breach of that magnitude could threaten operational viability. Beyond direct costs, consider the regulatory scrutiny, the member churn, and the reputational repair that would follow.

Lessons Learned

At Decodo (formerly Smartproxy), we have experienced this problem firsthand. Impersonators registered domains mimicking our brand to deceive customers and collect payments for services they never delivered. Reviews from victims describe sending money to addresses that the scammers later claimed not to recognize, with no path to recovery. Every negative experience caused by these fraudulent sites damaged our legitimate reputation. Credit unions face the same dynamic, as members who fall victim to impostor sites often blame the institution they thought they were dealing with.

Protection requires proactive measures. Credit unions should register their name across major domain extensions, including .com, .org, .net, .bank, and relevant country-code domains. Common misspellings deserve attention as well. This defensive registration costs far less than recovering a domain through legal channels or repairing member relationships after a fraud incident.

Monitoring services can alert institutions when new domains resembling their brand appear. Early detection enables faster response, whether through dispute resolution processes like ICANN's Uniform Domain-Name Dispute Resolution Policy or direct negotiation with registrants. Legal frameworks exist to help trademark owners recover squatted domains, but success depends on acting quickly and documenting evidence thoroughly.

Smarter Members

Member education matters equally. Publishing official domains prominently on statements, in branches, and through member communications gives people a reference point for verification. When fraudulent sites are discovered, alerting members directly demonstrates commitment to their protection. Many institutions hesitate to discuss security threats publicly, fearing it might undermine confidence. In practice, transparent communication about risks and the steps being taken to address them strengthens member trust.

Technical defenses add additional layers of protection. Email authentication protocols like DMARC, SPF, and DKIM help prevent spoofing attacks. Clear SSL certificates and security indicators signal legitimacy to visitors. Training staff to recognize and report suspicious domains or phishing attempts creates an internal early warning system.

The credit union movement has always been built on trust and community. Digital squatters exploit exactly those qualities, relying on the assumption that a familiar name means a trustworthy source. Protecting your institution's digital presence requires the same attention that boards and executives give to physical security, lending practices, and regulatory compliance.

The squatters are counting on institutions to be reactive. The only way to stay ahead is to be proactive. Audit your domain portfolio today. Secure the obvious variations. Monitor for new threats. And make certain your members know exactly where to find you online. Their financial well-being and your institution's reputation depend on it.

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Vaidotas Juknys is Chief Commercial Officer at Decodo, where he oversees commercial strategy and business development. In his role, he focuses on aligning Decodo's web data infrastructure solutions with the evolving needs of customers, helping companies navigate the complexities of ethical data collection while maintaining competitive advantage in an increasingly data-driven industry.

Decodo (formerly Smartproxy) is a leading web data collection infrastructure provider. With a robust platform featuring over 125 million ethically sourced IPs from 195+ locations, supporting various proxy types, a powerful all-in-one Web Scraping API, and complimentary tools, users can stay confident about their web data collection and AI-powered projects.

Vaidotas can be reached online on LinkedIn and at our company website https://decodo.com