Phishing Scams Taking a Bite out of E-Commerce

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The fear of phishing scams and online fraud is undermining people'strust in the Internet and it's taking a big bite out of e-commerce.

Insight Express recently conducted a survey for Symantec Corp., aninformation security company based in Cupertino, Calif. The survey showsthat 43.5 percent of all respondents receive unsolicited emailsrequesting personal information several times a day. And 44.2 percentsay they think they have visited a fraudulent Web site, but they're notsure.

And because of these high percentages, Bill Rosenkrantz, group productmanager for Symantec, says 74.3 percent of respondents only buy productsthrough secure sites. But a full 45 percent don't provide confidentialdata over the Internet at all. That means 45 percent don't shop onlinebecause that would require them to give out their credit card numbers,along with other personal information.

And that means Amazon.com isn't selling books to that 45 percent.They're not battling it out in eBay auctions, and they're not orderinghiking boots from L.L. Bean's Web site.

''When almost half the population says they're not going to provideinformation over the Internet, it says to me that consumers are notembracing the Internet and have a lack of trust of onlinetransactions,'' says Rosenkrantz. ''It is definitely underminingpeople's trust. It's impact on e-commerce is harder to gauge but if ithasn't already, it has the potential to stall growth.''

Phishing scams, which are dramatically increasing in frequency, are thelatest type of online fraud. Scammers send out spam, pretending to belegitimate businesses or financial institutions. Using socialengineering tactics, they try to convince the user that there is aproblem with their online account or that some information has beenlost. They then entreat the user to click on a link which takes them toa Web site that is set up to look like the legitimate Web site, but isonly mockup for the scammer. Once the user puts in his credit cardnumber, or password or bank account information, the scammer can rob himblind.

While phishing scams are only one form of online fraud, Rosenkrantz saidthey focused their survey on it because it has received so muchattention lately.

''We needed to know to what extent do phishing attacks impact people'soverall trust of the Internet,'' he explains.

Rosenkrantz also says the survey shows that 93.9 percent are somewhat orvery concerned about phishing attacks. It also shows that 31.5 percentdon't use the Internet for online banking.

And while the majority of respondents say they haven't been the victimof online fraud or identity theft, 86 percent of those who have not beenvictims have changed the way they use the Internet.

Rosenkrantz says businesses are suffering financially because of thefear and mistrust out there.

''Business people are saying they can't communicate with their consumersbecause the customers can't distinguish between legitimate emails andphishing scams.''

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