Cyber attacks hindering growth of ecommerce, Ecommerce in Action –

Phishing and other cyber attacks are undermining consumer confidence in online commerce, according to a recent Gartner report. These cyber attacks may also have a direct effect on the growth of ecommerce.

Three out of every four online shoppers surveyed said they are more cautious about where they buy goods online, and one out of three reports buying fewer items than they otherwise would, because of security concerns.

"Companies need to take steps quickly to beef up online security," states Gartner's Avivah Litan. "Businesses cannot rely on the Internet to lower costs and improve marketing efforts indefinitely if consumer trust continues to decline."

Cyber Attacks on the Rise

For many users, the Internet is an increasingly hostile environment. Pew Internet reports that nine out of ten Internet users have changed their behavior online to avoid falling victim to spyware. A 2004 study found that, while 53% of those surveyed said that they had experienced spyware or adware on their computers, a scan of their computers revealed that 80% actually had such programs installed.

In addition to adware and spyware, phishing attacks are on the rise. Phishing is the use of email messages that look like they are from trusted sources, like banks or popular ecommerce sites, to request private account information.

Phishing attacks grew at double-digit rates last year in the United States. 73 million U.S. adults who use the Internet said they had received more than 50 phishing emails in the past year. This is a 28% increase over the previous year.

According to Gartner: * 2.4 million online consumers have lost money because of phishing.

* About 1.2 million consumers lost close to a billion dollars in the last year.

* Most of the money stolen was repaid by banks and credit cards.

Attacks Limit Growth of Ecommerce

These threats are having a direct effect on consumer behavior.

Cyber attacks have undermined consumer confidence in email. At least 80 percent of U.S. online consumers said that online attacks have affected their trust in email. Of these consumers, more than 85 percent delete suspect e-mail without opening 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," Ms. Litan said. "For example, a bill sent electronically costs about half of what a bill costs when sent through regular mail."

"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."


Gartner Survey Shows Frequent Data Security Lapses and Increased Cyber Attacks Damage Consumer Trust in Online Commerce

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