Ecommerce- boom or bust?

Essay by rahul_sharmaC+, December 2005

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Dotcom trading is enjoying a boom, but its future depends on maintaining consumer trust. Lindsay Nicolle reports on the threats to confidence in online security:

"Like the Wild West, the internet has been largely tamed. But it still has more than its fair share of bandits. And today, they not only want your money, but your identity too. Online internet identity theft could be the next major high-tech crime wave to hit the UK, and the backwash in falling consumer confidence could create problems for even major retailers and banks."

So where does that leave the long-term viability of online retailers? Are we facing a potential internet crisis where consumers withdraw to the point that online will always be a secondary channel for business?

By all accounts, the weather pattern looks stormy. UK internet users are recklessly giving away too much personal information, inviting the rapidly rising crime of online identity theft, according to a poll by Winmark Research.

As traditional identity theft, such as credit card fraud, becomes more difficult because of security initiatives such as chip and Pin, criminals are looking for new ways to conduct fraud.

Fraud-based and phishing websites are mushrooming roughly 50% month on month, according to the Anti-Phishing Working Group, whose members include financial institutions, online retailers and law enforcement agencies. The latest look like legitimate, unique online e-commerce sites. They trick both casual and corporate web users into being victims of identity theft, using highly creative and sophisticated techniques.

Identity theft could become the greatest threat to the future of the online business world. If users become disillusioned about internet security, consumers are likely to turn on the mechanism they feel has enabled the crime, along with any unfortunate business involved.

Crucially for online businesses, 57% of consumers already believe that the responsibility...