Growing numbers are buying less online

Online consumers are expressing growing worries about identity theft, and this is not good news for retailers, reports The Conference Board, New York. More than 13% of all Internet users say they or a member of their household already has been a victim of identity theft.

"Misplaced or stolen data from major financial service institutions such as Citigroup, Bank of America, and Wachovia, and [the] admitted mishandling of data by credit card processing company CardSystems Solutions, have increased consumers' concerns about online security," notes Lynn Franco, director of The Conference Board's Consumer Research Center. "Consumers have taken steps to be more cautious, which is a good thing. The downside is the negative impact to online retailers that may slow the growth of e-commerce."

Survey data show that more people are buying less online. Nearly 70% of online users have installed additional security software on their PCs; 54% now "opt-out" of special offers; and 41% are purchasing less online. Some 27% say they have read online privacy statements and 21% are using multiple e-mail addresses.

The majority of online consumers state they are more concerned today about the security of their personal information on the Internet than a year ago. Nearly two-thirds of Internet users age 55 and over claim they are more apprehensive. "Identity theft is the fastest growing crime in the nation, according to the Federal Trade Commission," cautions David Stark of TNS, a custom research company. "Behind phishing attacks and malicious spyware are criminals whose goal is to get people's names, credit card numbers, and account information for fraudulent purposes."

Close to three out of every five Internet users claim they are extremely concerned about the security of their information when conducting financial transactions online. Nearly half are just as anxious when purchasing products over the Internet. However, when communicating online or using search engines, less than 30% of online consumers expressed a heightened level of concern.

The younger the online consumer, the less apprehensive he or she usually is, regardless of the online activity. "Younger consumers tend to be among the early adopters of technology and the Internet is no exception," notes Stark. "This group is familiar and comfortable with the Web, and many feel that they know how to protect themselves online. Additionally, consumers who are 55 and older have accumulated more wealth than their younger counterparts. There is a lot more money at stake for this group if their personal information ever got into the hands of cyber criminals."

COPYRIGHT 2006 Society for the Advancement of Education
COPYRIGHT 2008 Gale, Cengage Learning