TELECOM Digest OnLine - Sorted: Scams Could Alter Holiday Web Shopping - Analysts

Scams Could Alter Holiday Web Shopping - Analysts

Lisa Minter (
Tue, 14 Dec 2004 11:06:36 PST

SAN FRANCISCO (Reuters) - While holiday shoppers are purchasing more
presents on the Internet, fears of identity theft and online fraud are
making them more careful about using the Web, analysts said on Monday.

Online scammers are getting more sophisticated and aggressive, and
"It's starting to affect (consumer) behavior," said Jonathan Penn, an
analyst at technology research company Forrester. "People are less
willing to give out information.

"We are seeing a lot of them curb their behavior and scale back
purchases of good and services online," said Penn.

Some consumers are rejecting obscure sites with rock-bottom prices and
sticking with more established Web retailers they have used before, he
said, adding that the impact on online retailing is difficult to

In one survey, conducted by a unit of market research group TNS for
anti-fraud services company MarkMonitor, 10 percent of respondents
said fears of online fraud would lead them to do less online holiday
shopping than they had planned.

Nearly 25 percent of the 1,015 adults polled said they had no plans to
shop online this season.

The findings follow a survey of 1,071 people released in November by
TNS and online privacy watchdog TRUSTe, which showed that almost 6 in
10 consumers -- about 49 percent more than in 2003 -- said they
planned to cut their online shopping because of identity theft and
other privacy concerns.

Phishing attacks -- spam e-mails that attempt to lure people to spoof
Web sites that ask for personal or financial information that could be
used to drain bank balances or fraudulently open credit card accounts
-- are on the rise.

Phishers, who in the last year had posed almost exclusively as
financial services companies such as Citibank or PayPal, have begun
tailoring their attacks to the holiday season.

In recent incidents, phishers have pretended to be companies looking
to confirm online purchases or to verify shipping information, with
the aim of hitting people where they are susceptible.

"Our sense is that the bank kind of phishing is really the tip of the
iceberg," said Mark Shull, president and chief executive of
MarkMonitor, also a Web domain registrar.

While sellers of counterfeit or gray-market goods -- from luxury items
to prescription drugs -- fall into a different category than phishers,
they may use credit card information to steal money from unwitting
buyers or sell that information to groups that pass it on to
underground crime networks, analysts said.

Nevertheless, Shull said the MarkMonitor survey showed that some
consumers willingly do business with them anyway.

To that end, almost 28 percent of respondents said they would throw
caution to the wind and knowingly buy a low-priced, good fake of a
popular item on the Web for their own use.

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