Security concerns to stunt e-commerce growth

But the security problem online consumers find the spookiest is unauthorized access to their personal and financial information that criminals can use to steal identities and inflict serious damage to their finances and credit, Litan said. Examples of this are recent incidents of lost, misplaced or unsecured data at companies such as CardSystems Solutions, ChoicePoint, Citibank and Wachovia that could potentially affect millions of consumers.

In a recent survey of 5,000 U.S. Internet users done by Gartner, 42 percent said concerns about online attacks have affected their online shopping behavior. Among this 42 percent, three-quarters are more cautious about where they shop online and one-third buy fewer items than they normally would, Litan said.

Online banking activities are also being affected. Among the 5,000 respondents, 28 percent have modified their online banking behavior because of security concerns. Within this 28 percent, three-quarters log into their accounts less frequently, 14 percent have stopped paying bills via online banking and about 4 percent have completely given up on online banking, Litan said.

A major victim of consumers' distrust is commercial e-mail, with a majority of survey respondents saying they delete e-mail from unknown companies or individuals without even opening the messages. This trend is seriously damaging the effectiveness of e-mail as a legitimate tool for bonafide companies to communicate with their clients.

Gartner's survey also found that consumers expect the companies they do business with over the Web to be much more effective than they are now at detecting and preventing fraud. The survey also found consumers are underwhelmed by government initiatives to address online security problems, with about 66 percent of respondents saying they want laws that would let consumers opt out of having their personal data shared with third parties without their consent.