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Source: Inside ID

Posted on November 9, 2004

      Consumers aren't letting concerns about Internet fraud deter them from shopping online, according to new findings by ACNielsen International Research.

      Results from an ACNielsen International Research survey, commissioned by eBay and its PayPal subsidiary, indicate that online shoppers will actually increase their Ecommerce activities this year. That's due to a combination of improved Internet security, and their growing awareness of online frauds - and how to avoid them.

      According to the survey, conducted in March from data from about 1,000 recent online shoppers, 51 percent said the Internet became a safer place to shop in 2003, while 61 percent believe it will become even safer this year.

      Accordingly, the research found that 53 percent of online shoppers have plans to increase their purchasing on the Internet this year.

      Similarly, Ecommerce customers are becoming more savvy about the potential pitfalls of shopping online. The survey found that 75 percent of those polled were aware of potential fraud when shopping online, such as fake or "spoof" e-mails. That's good news for eBay and PayPal, and their users - who, of course, have been vexed by the problem for some time - since it means that faked e-mails might not be having a significantly harmful impact on their businesses.

      "The study confirms our belief that online shoppers are getting smarter about security and that the majority of people have had no problems shopping online," said Rob Chesnut, vice president of trust and safety for eBay and PayPal. "Online security is central to everything we do at eBay and PayPal. This study gives us some important insight as we continue to improve our advanced fraud-protection initiatives."

      In fact, the overall report could mean good things are in store for the entire Ecommerce sector, which has been plagued by frequent concerns about security.

      A Gartner Group report issued in May said "phishing" - another term for e-mail spoofing - attempts have grown significantly lately. The study, of about 5,000 Internet users - found that about 57 million Americans received a spoofed e-mail in the last year, with 76 percent of the attacks occurring during only the last 6 months. The total damages of e-mail frauds cost U.S. banks and credit card issuers $1.2 billion last year, Gartner said.

      Gartner also agreed that most consumers are savvy to attempted fraud. An estimated 19 percent of U.S adult Internet users were trusting enough to actually click on a link in a phishing e-mail, while only 3 percent reported actually entering sensitive personal or financial information.

      Still, online security firm Cyota also released a recent study, which suggests slightly different findings than the ACNielsen research. The Cyota study found waning confidence in the usefulness e-mail correspondence among consumers, due to phishing e-mail attacks. According to the firm, 74 percent of the 650 e-commerce purchasers it polled said they were less likely to shop online because of phishing.

      PayPal seized the opportunity of the ACNielsen report to highlight resources available on its site for safe online shopping. In its Security Center, PayPal recommends that shoppers research sellers via a variety of means before committing to a sale, understand each seller's refund policy, use a secure payment process, and avoid offers that sound suspicious or "too good to be true."

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