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Home » Hacking News » Security concerns will cause fall in e-commerce

Security concerns will cause fall in e-commerce

by Nikola Strahija on June 27th, 2005 Security concerns are troubling Internet users' confidence and slowing online sales, Gartner has warned.

Alarmed with rise in phishing attacks, spyware intrusions, virus infections and compromise of personal data, Internet users are limiting their e-commerce activities and this will slow down business-to-consumer sales growth between one and three percent in the coming years in the US, the research company claimed.

-This concern is affecting online consumers' behaviour and dampening their willingness to use the Internet to transact, said Avivah Litan, author of the study named “Increased Phishing and Online Attacks Cause Dip in Consumer Confidence”. -Consequently, ISPs, financial institutions, online retailers and other companies selling goods and services to consumers via the Internet must address these concerns and put safeguards in place to protect their clients, Litan said.

Gartner also warned that the total dollar value of business-to-consumer online sales could grow at a slower pace than the company previously predicted. Online consumers are frightened over the rising rates of a variety of security threats. A big one is phishing, between May 2004 and May 2005, phishing e-mail grew 28 percent and about 1.2 million US consumers suffered losses totalling about $929 million, according to Litan.

Another security problem frightening consumers is spyware, but the security problem online consumers find the scariest is unauthorized access to their personal and financial information that criminals can use to steal identities and inflict serious damage to their finances and credit, Litan said. Examples of this are recent incidents of lost, misplaced or unsecured data at companies such as CardSystems, ChoicePoint, Citibank and Wachovia that could potentially affect millions of consumers.

Gartner found that consumers expect the e-business companies to be much more effective than they are now at detecting and preventing fraud. The survey also found consumers are underwhelmed by government initiatives to address online security problems, with 66 percent of respondents saying they want laws that would let consumers opt out of having their personal data shared with third parties without their consent.

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