"Companies need to take steps quickly to beef up on-line security," said Avivah Litan, vice president and research director at Gartner. "We are seeing unprecedented levels in consumer transactions on-line. Yet businesses cannot rely on the internet to lower costs and improve marketing efforts indefinitely if consumer trust continues to decline."
The survey of 5,000 US adults reveals that an estimated 73 million US adults received an average of more than 50 phishing e-mails in the last year – an increase of 28% on the previous year. Around 2.4 million on-line consumers reported losing money directly because of the attacks.
The effect of this on consumer confidence is now being felt: according to Gartner analysts, most on-line consumers do not open e-mail from companies or individuals they do not know from prior experience. Three of every four on-line shoppers are more cautious about where they buy goods on-line, and one third report buying fewer items than they otherwise would because of security concerns.
More than 80% of US on-line consumers said their concerns about on-line attacks have affected their trust in e-mail from companies or individuals they don't know personally, says the report. Of these consumers, more than 85% 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."
"In general, consumers expect companies they do business with to provide secure on-line communications and to protect consumer data from thieves at no additional cost to consumers," she added. "They want guarantees – authentication – from merchants and other businesses that their web sites are genuine. Consumers want this reaffirmed every time they go on-line."
The trend is supported by a report released last week by non-profit business group The Conference Board, and research group TNS NFO.
According to their Consumer Internet Barometer, growing security concerns have caused internet users to alter their on-line behaviour. Nearly 70% have installed additional security software on their PCs, 54% now “opt-out” of special offers, and 41% are purchasing less on-line.
Fifty-four percent say they are more concerned today about the security of their personal information on the internet than a year ago.
According to Lynn Franco, Director of The Conference Board’s Consumer Research Center:
“Misplaced or stolen data from major financial service institutions such as Citigroup, Bank of America and Wachovia, and this week’s admitted mishandling of data by the credit card processing company CardSystems Solutions, have increased consumers’ concerns about on-line security. Consumers have taken steps to be more cautious, which is a good thing. The downside is the negative impact to on-line retailers that may slow the growth of e-commerce.”
