ID theft fears slow Internet commerce

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ID theft fears slow Internet commerce

Sean Mussenden

Media General News Service

Thursday, October 27, 2005

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WASHINGTON -- Fear of identity theft is dramatically changing the way many Americans use the Internet.

 

A Consumer Reports poll released Wednesday found that one in four Web users say they have stopped shopping online because of perceived security risks, and more than half no longer give personal information like addresses or birthdates over the Internet.

 

"There seems to be a pretty major concern out there among the American public about identity theft," said Beau Brindler, director of Consumer Reports WebWatch, which conducted the survey. "But it surprised us ... that fear about identity theft is so strong that it seems to be turning some people away from the Web."

 

The online marketplace exploded over the last decade as consumers grew more comfortable shopping in virtual stores. Almost every imaginable product and service awaits purchase online -- airline tickets on Expedia, Britney Spears' bra on eBay and 99-cent songs through iTunes.

 

So far, industry officials said, identity theft fears have done little to slow online retail sales.

 

The pool of Internet users -- and online shoppers -- grows larger every year, said Bill McClellan, director of governmental affairs for the Electronic Retailing Association, an industry trade group. And, he said, consumers who continue to shop online are making more purchases.

 

He said these factors explain why online sales continue to rise.

 

"Online sales are booming, and there's no question that more people are using the Internet to buy things -- and the volume of what they're buying is increasing," he said.

 

Revenues from online retail businesses continue to increase at a steady clip, a May study by Forrester Research found. Last year, total online sales increased 24 percent, to $141 billion. The group expects a similar spike this year, especially during the lucrative holiday shopping season, as high gas prices give people an incentive to shop at home.

 

The Federal Trade Commission reports an increase in identity theft complaints over the last two years.

 

That suggests a growing awareness of the problem by the public, not necessarily an increase in identity theft crimes, agency spokeswoman Claudia Bourne Farrell said, citing government and private surveys.

 

Online shopping is not the most common method of identity theft, according to a February survey of identity theft victims by the Better Business Bureau. Nearly a third of victims said their troubles started with a lost or stolen wallet or credit card. One in 10 blamed a computer crime.

 

For its survey, "Leap of Faith: Using the Internet Despite the Dangers," a follow up to a 2002 poll, Consumer Reports WebWatch talked to 1,501 adult Internet users by telephone May 19 to June 21. The survey has a margin of error of plus or minus 2.7 percentage points.

 

Sean Mussenden is a national correspondent in Media General's Washington Bureau.