Digital Squatting Is Becoming a Big Problem for Brands Worldwide

Understanding the digital squatting threat

Digital squatting refers to the practice of registering, trafficking, or using a domain name in bad faith to profit from another party's trademark. The practice has existed since the early days of the internet, but modern squatters have developed increasingly sophisticated methods to deceive consumers and evade detection.

The basic premise remains simple. A bad actor registers a domain name that closely resembles an established brand. They then use this domain to intercept traffic, collect payments for services they never deliver, harvest login credentials, or distribute malicious software. Victims often have no idea they have visited a fraudulent site until their money disappears or their accounts become compromised.

Several distinct types of domain squatting have appeared over the years:

• Typosquatting involves registering common misspellings of popular domains, such as gooogle.com instead of google.com.
• Combosquatting adds keywords to legitimate brand names, creating domains like amazon-deals.com or netflix-login.com.
• TLD (Top-Level Domain) squatting exploits different domain extensions, registering a brand name under .org, .net, .biz, or newer extensions like .io and .ai.
• Homograph attacks use visually similar characters from different alphabets, such as substituting a Cyrillic а for a Latin a to create nearly undetectable fakes.

The connection between domain squatting and cybercrime has grown increasingly clear. Research from SecPod found that a 19-fold increase in malicious campaigns using certain domain extensions occurred between late 2024 and mid-2025. Their analysis identified nearly 1.4K malicious subdomains across 450 base domains, with over 99% used for credential phishing or malware delivery. These campaigns spoofed major brands, including Microsoft, Adobe, Google, and government agencies.

Decodo case: When impersonators attack

Decodo, formerly known as Smartproxy, has built a reputation as one of the most trusted names in web data infrastructure. The company has been recognized as the Best Value Provider for 4 consecutive years by Proxyway, offering high-quality proxy services and data collection tools to a global customer base. Fortune 500 companies, data scientists, developers, and marketing professionals rely on Decodo's infrastructure for various business projects.

This success has made Decodo a target for impersonators. Bad actors in China have registered domains, including smartproxy.org and smartproxy.cn, creating fraudulent websites designed to deceive customers seeking the legitimate service. Due to these issues, before rebranding to Decodo, the official brand needed to operate under a different name, smartdaili.cn, in China, but customers searching for proxy services may encounter these impostor sites first.

“We’ve spent years earning our customers’ trust through reliable service and ethical practices,” said Vytautas Savickas, CEO of Decodo. “Impersonators don’t just steal money. They deliver low-quality services that fall far short of what real companies provide. Every fake site makes it harder for honest businesses to earn trust and for customers to know who to rely on.”

Reviews on Trustpilot paint a troubling picture of what happens when customers fall victim to these scams. One reviewer warned others directly: "Beware. This is a scam that has nothing to do with the original Smartproxy. As far as I could find out, it's a Chinese copy of the site." Another victim described the fraudulent operation as scammers and thieves, noting that the support team speaks poor English and provides minimal assistance.

Victims report sending payments to addresses that the scammers claim not to recognize, leaving customers without recourse to recover their funds. Unlike credit card transactions, cryptocurrency payments can't be reversed or disputed through traditional channels. And for those users who fall victim to digital squatting and have received the proxy services, have reported the poor quality IPs that bring zero to no value for their use cases.

The impact on Decodo extends beyond lost sales to these fraudulent competitors. Every negative experience a customer has with a fake site damages the legitimate company's reputation. Confused customers leave negative reviews on the wrong platforms, contact the real company's support team with complaints about services they never actually purchased, and warn others away from a brand that did nothing wrong.

High-profile cases across the tech industry

Decodo's experience reflects a broader pattern affecting technology companies worldwide. Even the largest and most well-resourced organizations have struggled to protect their domains from squatters.

Tesla operated under the domain teslamotors.com for years while a squatter controlled tesla.com. The electric vehicle manufacturer eventually acquired its preferred domain, reportedly through a multi-million-dollar settlement. During the years of domain limbo, Tesla faced constant challenges with brand consistency and customer confusion.

TikTok's parent company, ByteDance, encountered a different kind of domain dispute. Two individuals in Australia registered tiktoks.com for $2,000, anticipating the app's explosive growth. When ByteDance offered $145,000 to purchase the domain, the registrants refused. The company then filed a cybersquatting complaint with WIPO, which ruled in ByteDance's favor and ordered the transfer of all disputed domains.

Microsoft's battle with a Canadian teenager named Mike Rowe became one of the most publicized domain disputes in internet history. Rowe registered mikerowesoft.com for his small web design business, creating a phonetic match with the software giant's name. Microsoft initially pursued legal action but backed down after public opinion turned against the company. The case ended in a friendly settlement that included an Xbox gift for the teenage entrepreneur.

Google has fought numerous battles against typosquatters registering domains like googkle.com, ghoogle.com, and gooigle.com. These misspelled domains have been linked to malware distribution campaigns targeting users who make simple typing errors.

India's largest dairy brand, Amul, discovered that cybersquatters had registered domains including amuldistributor.com and amulboard.com. The fraudsters used these sites to run elaborate scams, collecting fees from job seekers applying for fake positions and charging payments from entrepreneurs seeking franchise opportunities that didn’t exist. The scam operated from 2018 to 2020 before legal action shut it down.

The cybercrime connection

Domain squatting has become deeply intertwined with broader cybercrime operations. The Anti-Phishing Working Group (APWG) tracked over a million phishing attacks in the first quarter of 2025 alone, the highest quarterly total since late 2023. Many of these attacks rely on squatted domains to create convincing fake websites.

According to Keepnet Labs research, 68% of phishing websites in 2021 used typosquatting or compromised brand domains. This percentage has likely increased as attackers have become more sophisticated. The FBI's Internet Crime Complaint Center recorded over 193K phishing or spoofing complaints in 2024, with Business Email Compromise alone logging over 21K complaints and $2.77B in losses.

The financial impact continues to escalate. The IBM Cost of a Data Breach Report found that phishing attacks cost organizations an average of $4.8M per breach in 2025, making it the third costliest initial threat vector. On average, phishing attacks take 254 days to detect and contain, the third longest of all attack vectors behind only supply chain attacks and malicious insiders.

How domain squatters operate

Understanding the tactics squatters use can help businesses and consumers identify and avoid fraudulent sites. Modern domain squatting operations have become increasingly sophisticated, employing multiple strategies to maximize their success.

The Chinese domain registration scam has targeted businesses for over a decade. Scammers pose as representatives of domain registration companies, contacting businesses via email to warn that a third party is about to register their brand name under Chinese domain extensions. The scammers offer to secure these domains on the victim's behalf, charging inflated prices for registrations that may never actually occur. This scheme exploits fear and urgency to extract payments from business owners unfamiliar with domain registration processes.

Clone and deceive operations create nearly perfect copies of legitimate websites. Scammers replicate the design, content, and branding of established companies, sometimes copying entire product catalogs and checkout processes. Customers who land on these sites cannot easily distinguish them from the real thing. They complete purchases, provide payment information, and receive nothing in return. Some clone sites go further, harvesting login credentials that victims reuse across multiple services.

Domain parking monetization takes a less directly harmful but still problematic approach. Squatters register trademark-similar domains and fill them with pay-per-click advertisements. Every visitor who arrives at these parked pages, usually through typing errors or search engine results, generates revenue for the squatter while creating confusion about the legitimate brand.

Phishing infrastructure represents the most dangerous category of domain squatting. Criminal organizations register convincing domains to host fake login pages for banks, email providers, and popular services. These pages capture credentials that enable account takeovers, identity theft, and financial fraud. Some squatted domains serve as command-and-control servers for malware operations or as distribution points for ransomware and other malicious software.

Consumers should watch for several warning signs when visiting unfamiliar websites. Slight misspellings in URLs often indicate fraudulent sites. The absence of HTTPS encryption suggests a lack of legitimate security investment. Requests for unusual payment methods, particularly cryptocurrency or gift cards, should raise immediate red flags. Poor grammar and unprofessional communication indicate operations run from overseas without native language speakers. Pricing that seems too good to be true usually signals a scam designed to collect payments without delivering products or services.

Legal protections and recourse

Several legal frameworks exist to help trademark owners recover squatted domains and pursue damages against bad actors. The effectiveness of these protections depends on the specific circumstances of each case and the jurisdiction involved.

The Uniform Domain-Name Dispute Resolution Policy (UDRP) provides an ICANN-approved arbitration process for domain disputes. According to Domain Name Wire, UDRP.Tools counted over 8K cases, resulting in a decision in 2025. At WIPO, only 5% of disputes were denied, and 15% of cases were settled before decisions were rendered. The remaining cases resulted in a transfer or cancellation. Trademark owners must demonstrate that the disputed domain is identical or confusingly similar to their mark, that the registrant has no legitimate interest in the domain, and that the domain was registered and used in bad faith.

The Anticybersquatting Consumer Protection Act (ACPA) provides legal recourse for trademark owners in the United States. This federal law allows businesses to sue domain squatters in court, seeking both damages and forced transfer of infringing domains. ACPA cases require proving bad faith intent, which can involve demonstrating that the registrant sought to profit from the trademark owner's goodwill or intended to divert consumers for commercial gain.

The Uniform Rapid Suspension (URS) system offers a streamlined process for clear-cut cases of cybersquatting. Trademark owners can file complaints and potentially suspend infringing domains within 24 hours. The URS process costs approximately $200 plus any legal fees, making it accessible for businesses of various sizes. However, URS only suspends domains rather than transferring them, limiting its usefulness for brands seeking to acquire and control problematic domains.

Success in any legal proceeding depends on proper preparation. Trademark registration significantly strengthens a complainant's position, providing clear evidence of ownership and rights. Documentation of the squatter's bad faith activities, including screenshots, transaction records, and victim complaints, helps establish the case for transfer or damages. Acting quickly matters, as delays can allow squatters to profit from their schemes or transfer domains to new owners.

Legitimate trademark owners have to invest a lot of time and money to defend themselves against attacks targeting their Intellectual property. In addition to UDRP and URS, disputes may also be resolved through national courts or country-code top-level domain (ccTLD) dispute procedures, which vary by jurisdiction.

Protecting your brand from domain squatters

Prevention offers the most cost-effective approach to the domain squatting problem. Businesses that proactively secure their digital presence face fewer disputes and suffer less damage when squatters do strike.

Domain registration should extend beyond your primary .com address. Securing your brand across major TLDs, including .org, .net, .io, and .ai, prevents opportunistic registrations. Common misspellings of your brand name deserve attention, as typosquatters specifically target these variations. Country-code TLDs matter for businesses operating internationally, with extensions like .co.uk, .de, and .cn requiring consideration based on your market presence.

Trademark registration provides the legal foundation for enforcing your rights. Registered trademarks carry weight in UDRP proceedings, ACPA litigation, and negotiations with squatters. Businesses should register their marks in key jurisdictions where they operate or plan to expand.

Monitoring services can alert you to new domain registrations that resemble your brand. These tools scan registration databases and flag potential infringements for review. Early detection allows for faster response, whether through legal channels or direct negotiation with registrants. Some services also monitor review platforms and social media for mentions of your brand in connection with fraudulent activities.

Technical defenses add layers of protection for your legitimate operations. Email authentication protocols, including DMARC, SPF, and DKIM, help prevent spoofing attacks that use your domain name. SSL certificates and trust badges signal legitimacy to visitors. Clear communication with customers about your official domains helps them identify and avoid impostor sites.

Response planning ensures your team can act quickly when squatting incidents occur. Documenting incidents thoroughly, including screenshots and WHOIS records, preserves evidence for legal proceedings. Having legal counsel familiar with domain disputes on retainer reduces response time. Established relationships with registrars and hosting providers can expedite takedown requests for clearly fraudulent sites.

Educating customers and building trust

Customer education represents an often-overlooked component of brand protection. Informed customers can identify and avoid fraudulent sites, reducing the damage squatters can inflict on your reputation.

Publishing a clear list of official domains on your website gives customers a reference point for verification. This list should include all legitimate web properties, social media accounts, and email domains. Prominent placement ensures customers can find this information when they have questions about a site's authenticity.

Warning customers about known impostor sites demonstrates your commitment to their protection. When you discover fraudulent domains, communicating this information through email newsletters, social media posts, and website announcements helps prevent victimization. Customers appreciate brands that actively work to protect them from scams.

Easy reporting channels encourage customers to alert you about suspicious sites. A dedicated email address or web form for reporting potential fraud creates a feedback loop that improves your monitoring efforts. Customers who encounter questionable sites may not know how to report them without clear guidance from the legitimate brand.

Bottom line

Digital squatting will remain a persistent threat as long as domain registration remains accessible and affordable. The economics favor squatters, who can register hundreds of potentially valuable domains for minimal cost while legitimate businesses must invest significant resources to recover each one.

The Decodo case illustrates both the challenges and the importance of addressing this threat. A company that has invested years in building trust and delivering quality service can see its reputation damaged by impersonators operating from the other side of the world. Customers who fall victim to these scams lose money and lose faith in online commerce generally.

"Digital squatting has evolved from a nuisance into a serious business risk that demands executive attention," said Vaidotas Juknys, Chief Commercial Officer at Decodo. "We urge every company to audit its domain portfolio today, not tomorrow. Register the obvious variations, monitor for new threats, and educate your customers about how to find you safely. The squatters are counting on businesses to be reactive. The only way to win is to be proactive."

The domain represents the front door to your digital presence. Ensuring that squatters cannot pick that lock requires ongoing attention, investment, and commitment. The alternative, ceding this territory to criminals, carries costs that no business can afford.