Data breaches could take a toll on e-commerce

Customers are increasingly wary after losing data

Faced with security breaches and personal data hemorrhages from retailers and a variety of educational and medical facilities, consumers are now becoming more skittish about the potential dangers of e-commerce.

That was one of the findings of a new survey on consumer privacy conducted by the Ponemon Institute, an Elk Creek, Mich.-based research and educational organization that focuses on privacy issues. Also participating in the survey, which drew responses from 789 consumers last month, was Vontu Inc., a San Francisco based security software maker.

One of the most sobering statistics from the survey was that a whopping 62 percent of the participants had been notified by an organization holding their private data that some of their information had been breached. In addition, 84 percent of that group felt "anxiety" over the data loss, according to a statement from the Ponemon Institute. Full results from the survey are due for release on Monday.

Data breaches have the potential to negatively affect online consumer buying habits, making consumers less willing to share credit card information or their Social Security number online. For instance, 43 percent of those customers who have already suffered a data loss wouldn't use a debit or credit card to make a purchase with a new Web retailer. Only 32 percent of consumers who have not been affected by data loss were of that mind-set.

"Our research clearly shows that data breaches are affecting consumers' trust in the organizations with which they share their data and, ultimately, their buying behavior," said Larry Ponemon, chairman of the Ponemon Institute.

Of those surveyed, 62 percent said they'd be more upset with a company if data was lost due to negligence rather than if it had been stolen.

The five categories of private data that generated the most concern among consumers were medical records, pharmaceutical history, credit card and debit card information, and Social Security numbers. The majority of respondents also said they'd be most concerned if it was a health care provider, pharmacy or employer who lost their private information.

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