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Consumer Security Fears Cost E-Commerce $2 Billion

About $913 million was lost because consumers scaled back online buying over security worries, and another $1 billion in lost revenue was "credited" to shoppers who refused to shop online

Consumer jitters over security cost online retailers nearly $2 billion in lost sales so far this year, according to survey results released Monday by research firm Gartner.

The Web-based poll of 5,000 U.S. adults pegged the losses at just over $1.9 billion, said Gartner analyst Avivah Litan. About $913 million of that total was lost because of security worries by current online shoppers, who scaled back their spending; $1 billion in lost revenue was "credited" to shoppers who completely refused to shop online because of the same security concerns.

Just over 46% of the 155 million U.S. adults who go online, said Litan, admitted that misgivings about information theft, data breaches, or Web-based attacks have affected their purchasing, online transaction, or e-mail behavior. Of all online consumer behaviors, e-commerce -- which includes online banking, online payments, and online shopping -- suffered the most in 2006.

Not that it makes a lot of sense, said Litan. "People are a little irrational about e-commerce. If you look at the data breaches, for example, four out of five card data breaches are at point-of-sale, not online," she said. "But people take out all the security problems on online. It's not irrational to worry about security, but it is lopsided toward online."

By Gartner's estimates, security concerns have kept about 33 million Americans from banking online; 9 million were consumers who once banked online but stopped the practice in 2006 because of security anxiety.

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