6 June, 2007 - 2:14pm

Today's report by analysts eMarketer finds that the undermining of consumer confidence in online security has resulted in a substantial decrease in e-commerce activity. American internet users are adjusting their online behavior to avoid identity theft by visiting fewer sites, ceasing to bank online and purchasing less online. The study claims that approximately 3/4 of Americans are concerned about identity theft and 1/4 are now limiting their e-commerce use. Ben Macklin author of the study states, "not even counting the actual losses to fraud and theft suffered by internet users and businesses, which are not insubstantial, the loss of potential online revenue is enormous."

They cite Gartner research statistics of $1.91 billion in lost e-commerce revenue last year due to online security concerns. The concerns are not without merit, as earlier this spring Gartner came out with a disturbing identity theft study, finding that the number of ID thefts has increased by over 50% since 2003.