Consumer confidence in doing business via the Web is heading for shaky ground as a rash of online security glitches and privacy breaches tarnishes the image of Internet commerce.
The latest examples of e-commerce security lapses include America Online's admission that hackers gained access to member accounts through an e-mail virus targeted at its employees. In a separate development, AOL's Netscape Communications division was hit with a lawsuit accusing it of breaking federal privacy laws by tracking customer downloads. And last month, a handful of failed consumer-oriented dotcoms confessed to selling customers' personal information to the highest bidder.
Public perceptions of lax security or disregard of privacy can alienate customers, who are increasingly aware of privacy issues online, said Richard Dean, an analyst at IDC.
"I think consumers in general are a very sceptical group," Dean said. "If consumers feel as though there's some vulnerability of someone stealing their credit card number or stealing information about their buying habits, they're very concerned."
Although consumers can be their own worst enemies by not understanding or taking advantage of online security measures, e-commerce sites are often responsible for suspect information protection practices.
While accessing a TWA frequent-flyer page online, Layla Hirr, an engineering services manager, said she was shocked to discover that by simply entering an account number, the airline displayed a record of her name, the city she was from, and every flight she has flown on TWA.
"I do feel there is private information there. It's nobody's business where I'm travelling. Internally is one thing, but for them to be posting my travel patterns on the Web, I feel it is much more sensitive information," Hirr said. "They're trying to accommodate access to information, but they don't seem to understand the issues of security."
Hirr said that even if TWA had the lowest airfares available, she would not be inclined to travel with them any more. TWA did not return calls for comment.
The recent passage of the Electronic Signatures in Global and National Commerce Act, which will give online documents the same legal status as signed printed documents, poses new security traps for consumers, analysts said.