"They told me someone tried to use my card in a northern Illinois discount store, a place I have never been," said Williams. "The bank believed my number was stolen from a retailer I visited in Seattle weeks before, so even though I never used the credit card online, it was stolen from the retail store and then sold online. The thief tried to use my number and her name. I'm vulnerable whether or not I shop online."

Williams is one of 13 victims -- a minute -- of identity theft. Figures from the San Diego-based Identity Theft Resource Center show more than 19,000 people a day, or 13 a minute, fall prey to these kinds of attacks. Between January and December 2004, according to the Federal Trade Commission, consumers reported losses from fraud of more than US$547 million.

Security Breaches and ID Theft

Credit card fraud is the most common form of reported identity theft, with bank fraud close behind. Recently, Visa USA dropped Atlanta-based credit card processing company CardSystems Solutions following a security breach that exposed more than 40 million payment cards of all brands to fraud.

Earlier this summer, Citigroup, the world's largest bank, began notifying millions of customers about a security breach after the company lost the personal information of millions of customers, making them potential targets of identity theft. In the past six months, there have been other well-publicized incidents of misplaced consumer files and security breaches involving ChoicePoint, Lexis-Nexus, Bank of America and Wachovia.

With security breaches and identity theft fears on the rise, consumers are expressing concerns about online shopping. According to a recent study by the research group The Conference Board, growing security concerns are causing Internet users to alter their online behavior. The study found that more than 13 percent of all Internet users say they or members of their households have been victims of identity theft.

Concerned About Trust

According to the study, 41 percent of consumers are purchasing less merchandise online. A major reason for this decline is the fear that financial institutions are not protecting consumer information adequately.

"Trust has been broken on more than one level," said Lynn Franco, director of The Conference Board's Consumer Research Center. "It's not only the transaction; it is the storing and transporting of personal information that is making people afraid to shop online." (continued...)

1  |  2  |  3  |  Next Page >