Study: Online Privacy Concerns Increase

Privacy concerns stemming from online shopping rose in 2007, a new study finds, as the loss or theft of credit card information and other personal data soared to unprecedented levels.

Sixty-one percent of adult Americans said they were very or extremely concerned about the privacy of personal information when buying online, an increase from 47 percent in 2006. Before last year, that figure had largely been dropping since 2001.

People who do not shop online tend to be more worried, as are newer Internet users, regardless of whether they buy things on the Internet, according to the survey from the University of Southern California's Center for the Digital Future.

The study, to be released Thursday, comes as privacy and security groups report that an increasing number of personal records are being compromised because of data breaches at online retailers, banks, government agencies and corporations.

The Identity Theft Resource Center, for instance, listed more than 125 million records reported compromised in the United States last year. That's a sixfold increase from the nearly 20 million records reported in 2006.

Data breaches often result from lost or stolen computer equipment such as laptops, though the single largest breach was a case of online hacking. Early last year, TJX Cos. disclosed that a data theft had exposed tens of millions of credit and debit cards to potential fraud.

The card numbers were typically collected during brick-and-mortar retail transactions at T.J. Maxx, Marshalls and other TJX chains. The breach is believed to have started when hackers intercepted wireless transfers of customer information at two Marshalls stores in Miami -- an entry point that led the hackers to eventually break into TJX's central databases.

Nonetheless, concerns about credit card security have largely stabilized, with 57 percent very or extremely concerned last year. It was 53 percent in 2006, a difference within the survey's margin of sampling error of 3 percentage points in either direction.

As of 2007, two-thirds of adult Internet users shop online, compared with just half a year earlier. Most spend $100 or less a month, and two-thirds of online shoppers have reduced buying at brick-and-mortar stores.

"You'd think the logical attitude would be to look at this level of concern and say I'm not going to shop on the Web, but it's not happening," said Jeff Cole, director of the Center for the Digital Future. "The advantages, the conveniences are so extraordinary."

With credit card fraud, a customer's liability is capped at $50, and even that amount is often waived. Customers often know of fraudulent charges quickly if they check their accounts online or are notified by their banks, which have security measures in place to flag suspicious transactions.

Identity theft, on the other hand, can take months and sometimes years to find out about and resolve, Cole said, possibly explaining the greater concern over privacy.

Among other findings in the annual survey, online parents are more likely than ever to withhold Internet use as punishment -- 62 percent in 2007, compared with 47 percent a year earlier and 32 percent in 2000. For the first time, denying Internet access is on par with banning television for bad behavior.

"What we've seen over those seven years is parents really now seeing that the Internet has lots of great stuff on it and can be really important, but also can be a time waster," Cole said. "They view it much closer to the way they see television."

Nearly two-thirds of parents, meanwhile, worry about kids participating in online communities and about half believe online predators to be a threat, notwithstanding other research showing fewer youths receiving sexual solicitations over the Internet as they become smarter about where they hang out and with whom they communicate online.

"The perception is higher than reality, but the perception is significant and leads to how much access you give your kids and whether you let them [surf] unsupervised," Cole said.

Internet penetration continues to show signs of plateauing. The percentage of former users who say they have no intention of going back online continues to increase, and less than half of those who have never used the Internet plan to log on in the coming year.

Newer users are more likely than veterans to access the Internet through a dial-up connection, and newer users tend to spend an average of 1.2 hours a week more than veterans playing online games. Veterans are more likely to read a newspaper or listen to the radio over the Internet.

Twenty-one percent of Internet users have stopped a newspaper or magazine subscription because they could get it online, while half of the Americans who read a print edition of the paper said they would miss it if it were to go away.

The study of 2,021 Americans was conducted Feb. 28 to Aug. 6, with participants selected randomly by telephone.


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