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10 years after birth of e-commerce, fear may curb growth

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After enjoying phenomenal growth in its first 10 years, Internet commerce faces new challenges amid growing fears of viruses, spyware and a range of fraud schemes.

The e-commerce revolution led by companies like eBay and, both created a decade ago, has made the Internet a permanent part of the world of commerce.

But even as more consumers join the rush, many are growing fearful about maintaining their privacy, protecting their personal data and the potential of falling victim to nefarious elements in cyberspace.

A survey of US Web users by the Pew Internet and American Life Project released this month shows 91 percent have changed the way they behave online as they try to avoid these problems.

Among the other findings of the survey: 81 percent said they stopped opening e-mail attachments unless they are sure these documents are safe; 48 percent have stopped visiting sites that they fear might deposit unwanted programs on their computers; and 25 percent have stopped downloading music or video files from peer-to-peer networks to avoid things like spyware.

A separate Conference Board survey last month showed more than half of online consumers say their level of concern has grown over the past year and many have changed the way they use the Internet, with some scaling back online purchases.

Nearly 70 percent of online users have installed additional security software on their PCs, and 54 percent now "opt out" of special offers; 41 percent are purchasing less online, the survey by the business research firm showed.

The research firm Gartner, in its poll of 5,000 US adults, showed growing concerns about "phishing," in which fake e-mails are disguised to look like legitimate requests from banks or credit cards firms, a technique used in identity theft schemes.

In the 12 months to May 2005, an estimated 73 million US adults who use the Internet said they received an average of more than 50 phishing e-mails in the past year, Gartner said. That was up 28 percent from a prior survey.

Also, some 2.4 million online consumers reported losing money directly because of the phishing attacks, although most said this was repaid by banks or credit card issuers, the Gartner survey indicated.

Online retail sales in the US market, the world's most developed, amounted to 141.4 billion dollars in 2004, according to the National Retail Federation. Some forecasts see that figure hitting 331 billion dollars by 2010.

Globally, eBay alone is expected to have sales of more than 40 billion dollars this year, up by a third over last year.

But Gartner estimates that US banks and credit card issuers lost about 1.2 billion dollars last year to phishing schemes. And analysts say the high-tech community needs some kind of system of authenticating e-mail to ensure that an e-mail actually comes from the person who's purporting to send it.

"Companies need to take steps quickly to beef up online security," said Avivah Litan, vice president and research director at Gartner.

"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."

Pew found 93 million US Internet users, or 68 percent, cited computer trouble in the past year that is consistent with problems caused by spyware and viruses, although 60 percent were not sure where the problem originated.

One in four said they found new programs on their computers that they did not install or new icons that seemed to come out of nowhere, with one in five saying their starting point, or home page, had inexplicably changed.

"These survey results show that as Internet users gain experience with spyware and adware, they are more likely to say they are changing their behavior," said Pew's Susannah Fox.

"But what is more alarming is the larger universe of people who have struggled with mysterious computer problems, but have no idea why. Internet users are increasingly frustrated and frightened that they are not in charge of their Internet experience."


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