Data breaches hurting online trade

The onslaught of data breaches and online fraud is putting people off buying and banking on the internet, according to a new Gartner report.

The survey of 5,000 people in the U.S. found that three-quarters of online shoppers have had their confidence rocked in buying on the internet or using online banking services because of phishing attacks and concerns over identity theft.

The number of respondents who said they received a phishing email rose by 28 percent in the year to May 2005, while 30 percent of online bank customers said these attacks have influenced making internet transactions.

Avivah Litan, research director at Gartner urged companies to "beef up online security".

"We are seeing unprecedented levels in consumer transactions online. Yet businesses cannot rely on the internet to lower costs and improve marketing efforts indefinitely, if consumer trust continues to decline," she said.

85 percent of respondents said they now delete suspect emails without opening them. Litan said this could have serious implications for companies and banks who use emails to communicate with customers.

Jon Giffard, technical director at LANDesk Software said the damage caused by phishing and other attacks is not just restricted to home computer users. Many businesses allowed staff to use work computers to conduct online banking and shopping.

"Businesses will leave themselves open to attack unless adequate security measures are in place. Organizations should make sure that computers are policed for spyware and patches on a regular basis not only to avoid such phishing expeditions but also to avoid sensitive data reaching the outside world," he said.

As reported in SC Magazine, BJ's Wholesale Club reached a settlement with the Federal Trade Commission over charges that it failed to protect sensitive customer data, which led to millions in fradulent purchases.

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