By George Anderson
An increase in phishing attacks and breaches of security of online sites has made consumers increasingly wary about conducting personal business online.
According to the results of a survey of 5,000 adult users on the Internet conducted by Gartner, phishing email attacks were up 28 percent in the last year and most say the frequency with which they receive these email scams has picked up of late.
According to the Gartner report, Increased Phishing and Online Attacks Cause Dip in Consumer Confidence, 2.4 million consumers lost money in phishing scams over the past year.
Gartner analysts said concerns about becoming a victim of a phishing attack has meant that even legitimate email is not being read. Eighty-five percent of consumers delete email they are suspicious of before reading it.
"This figure has serious implications for banks and other companies that want to use the e-mail channel to communicate more cost-effectively with their customer base," said Avivah Litan, vice president and research director at Gartner. "For example, a bill sent electronically costs about half of what a bill costs when sent through regular mail."
According to Gartner, left unchecked, the erosion of consumer confidence in online security will inhibit e-commerce growth rates by one to three percent over the next three years.
"In general, consumers expect companies they do business with to provide secure online communications and to protect consumer data from thieves at no additional cost to consumers," Ms. Litan said. "They want guarantees - authentication - from merchants and other businesses that their Web sites are genuine. Consumers want this reaffirmed every time they go online."
Moderator's Comment: Are phishing attacks and security breaches beginning to have a negative impact on e-commerce activity? How can legitimate merchants fend off the crooks? - George Anderson - Moderator