Personal Tech Pipeline | e-commerce security woes | Data Worries Stunt E-commerce, Online Banking

White Papers

Sponsor Resources

Free Newsletter GlossaryContact UsAbout Us
Players & CamsPhones & PDAsHome & AutoOnline

June 23, 2005

Data Worries Stunt E-Commerce, Online Banking

Courtesy of TechWeb News

Increased phishing scams and a plague of data breaches that have exposed millions of consumers' financial information are making Americans more than jittery about e-commerce and online banking, a report released Thursday said.

"I think this is an inflection point," said Avivah Litan, the Gartner research director who led the May survey of 5,000 consumers. "It looks like the bonanza of e-commerce is going to stop."

According to Litan's report, 42 percent of online shoppers and 28 percent of those who bank online are changing their e-habits because of phishing and other attacks.

The bottom line, said Litan, is that security woes will pull down the expected growth of e-commerce and online financial dealings by 1 to 3 percent through the end of 2008. "That may not sound like a lot," said Litan, "but when you're talking billions in growth, it's serious." She declined to put a price tag on the impact, saying that Gartner had no refreshed its e-commerce financial data in some time.

The affect on banks and other financial institutions could be dramatic, since another report issued Thursday by Yahoo and OgilvyOne Worldwide noted that the majority of Americans now use the Internet for conducting financial chores and transactions.

"The biggest impact [of phishing] is a newfound and serious consumer distrust of e-mail," Litan wrote in her report. More than 80 percent of those polled say that their trust in e-mail is down, while 85 percent of those people just delete suspect e-mail without opening it, thinking it best to play it safe rather than worry about being sorry.

"This figure has serious implications for banks and other companies that want to use e-mail to communicate more cost-effectively with their customers," wrote Litan. It costs a company about half as much to send a bill electronically, for instance, than to send it through the U.S. mail.

While phishing continued to climb in the last 12 months -- something that took even Litan off-guard -- consumers are actually about twice as likely to be worried about unauthorized access to their personal credit or account data as they are about phishing.

And they want some help. Two-thirds, said Litan, want the government to pass laws that will let them "opt out" of releasing their personal data to a third party. That would give consumers the power to decide who did, and didn't, have the right to release their data without express consent.

"That'll never happen," said Litan. "The financial services companies will argue that opt-out would slow down the business of extending credit to consumers. And they spend millions on campaign contributions. The privacy groups, in comparison, have no money at all.

"It often comes down to who are the largest contributors to political campaigns," she added.

Nor are consumers happy with the one weapon now in their arsenal. By virtue of 2003's Fair and Accurate Transactions Act, Americans are allowed one free look annually at their credit report. (The mandated reports can be requested from, a site created by the three major U.S. credit bureaus -- Experian, Equifax, and Trans Union -- but 14 states in the Northeast won't get access until September.)

Only 14 percent of those polled by Gartner believed that the free reports were effective in protecting them from identity theft fraud.

"One of the themes of this report is that people feel they can't do anything about the problem," said Litan. And it might be a long time before things get better.

"There's just lot of inertia in the system," she said.

E-mail This Story
Print This Story
Reprint This Story

Get the latest Personal Tech news, product info, and trends every week.

Related Content

  Right-click and choose Copy to extract RSS Feed URL  Personal Tech Pipeline's Main RSS Feed
  Right-click and choose Copy to extract RSS Feed URL  Personal Tech Pipeline's Blog RSS Feed

Keeping Up To Date On Enterprise Server Tech?
Review our compilation of columns on server security, database software, and Linux issues.
How to Achieve High Performance Through IT
Learn to achieve high performance by aligning IT to
strategic objectives and solutions to unlock that value.
Using Current Performance to Shape
Future Results

Hear new strategies for improving business
performance and results.

Editor's Picks

Apple posted this week its first-ever full-length movie -- the made-for-TV Disney Channel original movie "High School Musical" -- on iTunes for the price of $9.99. What do you think of this pricing for downloadable movies?
Love it! The price is lower than I would expect.
Like it. The price is about right.
Dislike it. The price is is a little too high.
Hate it! The price is way, way too high.
Neutral. It depends on the movie.

In search of personal tech products? See our new Product Finder, where you'll find personal computing devices, communications solutions, security products, and more.

Transform your IT infrastructure with IBM
Successful CIOs see IT as a prime stimulus for business innovation-and themselves as key participants in a process that develops business and IT strategies in concert. Read an executive summary and register to download the full IBM paper.

Symantec Backup Solutions
Desktop to Data Center Protection. Explore the Official Symantec Site.

SEC & HIPAA IM Compliance
Satisfy regulatory and compliance requirements for instant messaging.

Secure & Easy Console Management with Digi CM
The Digi CM console server provides secure, intelligent & easy access to network devices with a serial console port. With Digi CM, you can securely monitor & control servers, routers, switches & other devices even when your network is down.

Learn how much you save with open source.
Find out how much of a financial impact open source can have on your enterprise. Get these tools now, compliments of JBoss. Go!

Buy a Link Now

Top ten search terms from the TechWeb TechEncyclopedia
Stellent eSeminar "Approaches to Metadata Design" on March 23
Mobilized Solutions Guide: Find and compare solutions for your business
Top Requested White Paper Categories from TechWeb White paper Library
Top ten search terms from the TechWeb TechEncyclopedia