Existing online shoppers will increase their Internet purchasing activity in 2004 despite the growth of ‘phishing’ or spoofing scams, according to a recent AC Nielsen study commissioned by eBay and PayPal. Of 1,000 consumers profiled in the survey in March 2004, 53 per cent planned to increase their Internet spending in 2004, with 51 per cent believing the Internet became a safer place to shop in 2003, and 61 per cent predicting additional security mechanisms in 2004. Security was the biggest incentive for Internet consumers to increase their eCommerce activities, with 75 per cent being aware of the risk of ‘spoofing’.

Since most online businesses or US retailers still do not encrypt credit card databases at the back-end of a Web site, online thieves are most likely to target this repository as a source of ‘new’ data for counterfeit cards. Internet consumers are well aware of the risk, but most do not realize the databases at both ends of an online transaction, at the financial institution, and on the consumer’s PC, are most vulnerable to compromise. In light that many sites retain customers’ payment data without notification, which increases the risk of compromise, Gomez analyst, Chris Musto, emphasizes the need to review privacy policies.

Online security breaches like that at BJ’s Wholesale Clubs in March 2004, incidents at Experian, Data Processors International, and the leak of customer data by e-tailers, all prove the risk of online business storing customers’ personal data. Similarly, consumers using a user ID and a password at an online bank leave their data open to compromise by a keystroke-recording program that hackers plant on a PC. A further problem, however, is that credit card and other financial details are so easily gleaned from offline sources that in the event of a breach, it is not always obvious where the data was actually stolen from.

(Business Wire)