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Survey Says: Some 'Net Users No Longer Shopping Online

A new survey from Consumer Reports contains some interesting findings about the level of trust that consumers place in Internet commerce, including evidence that roughly 25 percent of Internet users no longer shop online because of fears over identity theft and fraud.

The study, conducted for Consumer Reports Web Watch earlier this year by Princeton Survey Research Associates Intl., polled 1,501 adult Internet users about a wide range of consumer attitudes towards the Web. Nearly nine out of ten said they had made changes to their behavior online due to the fear of ID theft, and of those changes, 30 percent said they had reduced their overall use of the Internet. Among those surveyed who said they have shopped online (77 percent), 29 percent said they have cut back on how often they buy things over the Internet.

Identity theft is among the fastest growing form of online fraud, according to the Federal Trade Commission. So it should probably come as little surprise that consumers are growing more wary of giving away their personal and financial information online.

After reading this survey, I worry that many users are just getting scared away from the Internet by all the real stories of online fraud. Sure, it's important that users know the Internet can be a dangerous place.  But it's also true that computer users can empower themselves and take responsibility for practicing safe cyber-security. 

No doubt that a great many consumers become victims of identity theft and fraud through no fault of their own.  But I'm willing to bet that a fair percentage of those surveyed who said they were using the Internet less these days were burned by a bad experience online, one that may even have been due to their own negligence. I say this because I have done a fair amount of reporting over the past nine months where I've spoken with people who hack into computers for a living -- using viruses, worms and keylogger devices that record everything people type on their keyboards.

From those conversations, some scary realities came to light.  For example, it is not unusual for one individual armed with various hacking tools and a little know-how to gain control over thousands of credit card and bank account numbers and their owners' personal information in an awfully short period of time. More often than not, the attacker gets this data by using automated tools to scour the Internet for home PCs that are unguarded by essential lines of defense, such as software security patches and firewalls.

I've been writing about the threat from phishing for more than 18 months now, and it's tempting to think that public awareness of these scams is on the rise. Perhaps it is, but as recently as six months ago, I had the opportunity to peer into a database clearly set up to receive information sent in by phishing victims.  That particular phishing scam stole information on nearly a hundred victims.

In August, more than 5,200 unique phishing sites were spotted online, according to the Anti-Phishing Working Group. Not all phishing scams are created equal (many are completely lame and quite obviously fraudulent), but if only a fraction of phishing sites take in as many people as scam I saw, you start to get a feel for the sheer number of people who are still blithely handing over their most private information to fraudsters.

One figure I found a bit surprising about this study was the level of public trust placed in online auctions: More than 60 percent of those surveyed said they trust online auction sites "a lot" or "somewhat." I'm not sure exactly how representative of the overall Internet population the folks who answered this survey were.  But this finding is worrisome, given that auction fraud was by far the most frequent type of online fraud reported last year, according to the FBI's Internet Crime Complaint Center, comprising some 71.2 percent of complaints in 2004.

By Brian Krebs  |  October 26, 2005; 1:01 PM ET
Categories:  Fraud  
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Comments

I find myself buying more stuff online than anywhere else now. I'm more afraid of "blithely handing over" my credit card over to someone at a store or restaurant and have him walk away to run it through. I think that's more likely to lead to fraud than using it online.

That said, it's also scary how, as we grow more aware of identify theft, you have to actually show your card to fewer salesclerks. You just run it through the machine yourself and most likely don't even have to sign a slip.

And the PayPal phishing must really work because I get one or two a day now in my inbox. And a recent (I think) email from PayPal looked phishy to me, but after careful examination I think it was real. I guess it's real if they tell you where to log on instead of giving you a link to click.

(I also don't shop eBay anymore because the site has become too sluggish as it gets bogged down with "features." Give me a plain old text site like Craigslist, but that's another whole story.)

Posted by: TBG | October 26, 2005 2:03 PM | Report abuse

I'll bet if you polled people without mentioning identity theft, you'd "discover" that online buying
is still steadily increasing.

I think that a lot of this type of polling is self-fulfilling; people are responding with what they think they're supposed to say.

Posted by: Joe Admin | October 26, 2005 2:23 PM | Report abuse

I have no idea if the poll is scientifically valid, but I do know that as someone who was an early online buyer, I now avoid it. Yes, I think financial institutions do a terrible job when it comes to security in general, and nothing is actually as safe as it could be, but online risks seem to be the worst.

Posted by: PAA | October 26, 2005 7:46 PM | Report abuse

I continue to shop Big Name retailers online, without worry.

I have avoided eBay, because that sounds like a good place for dabblers to get cheated.

The thing that creeps me out the most is online banking. I'm not going there.

Posted by: John Johnson | October 26, 2005 8:03 PM | Report abuse

Notice that services offered are aimed at early detection, not prevention. Prevention is possible, but the credit industry would rather profit from your fears. The only pratical solution is to force them. For details see:
http://www.sinceslicedbread.com/node/3956

Posted by: RD | October 27, 2005 9:48 AM | Report abuse

I was totally oblivious to how vulnerable I was on my computer until I read the free ebook "4 steps to spy proofing your computer" from http://www.nospyzone.com They showed me what a hardware keylogger looked like and how I could protect myself from snoops of all kinds. I highly recommend it for any of you who are concerned with your privacy.

Posted by: Lisa Holmes | October 27, 2005 3:08 PM | Report abuse

With all the weekly critical fixes urgently needed for Windows or Internet Explorer I stopped using my PC for Internet.
I instead use a Mac and I have no virus and not one spyware to worry about. It is quite a feeling.

Posted by: Dan | October 27, 2005 3:49 PM | Report abuse

With all the weekly critical fixes urgently needed for Windows or Internet Explorer I stopped using my PC for Internet.
I instead use a Mac and I have no virus and not one spyware to worry about. It is quite a feeling.

Posted by: Dan | October 27, 2005 3:50 PM | Report abuse

Due to concerns about online fraud and the insecurity of third-party, back-end, credit card transaction processors (remember the recent Card Systems Solutions fiasco), I switched my credit card about a year ago to MBNA. MBNA offers users its ShopSafe mechanism, which allows users to generate a temporary credit card number, good for a limited number of months (up to 12) and a dollar amount the user specifies. The temporary number is linked to the user's real account, so that one can buy things online, but one's real credit card number is never exposed.

Even if one gets suckered by a fraudster, using ShopSafe limits the damage.

Posted by: Acohn | October 31, 2005 11:21 AM | Report abuse

It's all very well to say "I won't shop on the internet anymore," but that doesn't
resolve anything. Fact is, the ready retail availability of the most common household items (try cookware & small appliances, for openers) has gone the way of ye olde dependable family-owned dep't store--such as, in the DC area, Woodies, Garfinckels, Kanns, etc., not to mention the manufacturers of same going out of business (e.g., Revere Ware, Farberware, etc.), & closing their retail outlets in the process). One could go on, but I think the point is made; online is the only place nowadays where one has any kind of choice or selection in re. these & many other items. --I do, however, share the queasiness of other commenters re. using an internet auction site, as I have both read about & heard of too many instances of people getting ripped off on the quality and condition of the received item v.s. as described on the website, without credit or identity theft even entering the discussion.

Posted by: CBWhite | October 31, 2005 5:39 PM | Report abuse

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