Editorial: Overcoming the Fear Factor

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One-third of U.S. Internet users 14 and older don't buy online because they're afraid of security issues and the privacy of their personal data. That statistic is from research aggregator eMarketer's new report, "Online Privacy and Security: The Fear Factor." Quite a scary number, and it could be a real one. If this keeps up, it could crimp e-commerce growth. Fueling those fears are endless scams, big-name data breaches, even Google being asked to release search data on users to the government - the list is long.

The Federal Trade Commission said in its latest annual report on consumer complaints that credit card fraud is the most commonly reported type of fraud resulting from identity theft. According to Forrester Research, people who won't buy online tend to have a lower household income and are less likely to have a college degree. Also of concern is how much data is collected and what's done with it. Thirty-five percent of online shoppers don't think it's worth providing personal information in exchange for a personalized shopping experience.

Who's hit hardest in all this uncertainty? Small e-tailers, eMarketer says. "As larger retailers improve their fraud prevention capabilities, criminals shift their attention to smaller merchants who lack the resources to combat fraud with the same vigor as their bigger peers," the report said.

I have a few friends - young and old - who won't shop online. They're uncomfortable entering their credit card numbers and watching the information disappear into the Internet. They say they'd rather call a company's toll-free number or go to the store. Even DM News' privacy columnist Bob Gellman worries about it. In his column earlier this month, Bob said he used to buy items on the Internet all the time, "but I have grown so wary in the past three years that I am now reluctant to do business with anyone new." Now, Bob is not your typical shopper, and he's very thorough in his research of a company before he makes a purchase. For more details on that, you'll have to read his column.

In this week's issue, copywriter Peter Fogel mentions security concerns as a reason people don't buy. He offers some solutions, too, including using constant reminders telling people that they are ordering through a secure server and that their information will be kept confidential. Bob and eMarketer reached similar conclusions, as well as suggesting to have a security seal and a clearly written privacy policy. E-tailers need to do something to stop the fear before it spreads more.

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