Most consumers are unaware that with just a click of their mouse they may be giving away more to online retailers than their money, a recent study found.
The study -- published by the Annenberg Public Policy Center -- reported large discrepancies between consumers' beliefs about their privacy and the online and offline marketplace reality.
The study tried to find out just how much consumers know about their vulnerability to abuse by online vendors.
In a world where Internet commerce has soared to astronomical heights -- expected to be valued at about $172 billion in 2005 -- many consumers are misled by online and offline stores, supermarkets and even their own bank, the findings showed.
Communication professor and leader of the study Joseph Turow believes that people sometimes will release information and not consider the consequences.
"What is really interesting is we find that people are really nervous about releasing their information online, and yet they do it all the time," Turow said.
Polling 1,500 adults, the study asked consumers about both their confidence in their ability to protect themselves from abuse by online retailers and their basic knowledge of general rules governing the online and offline marketplaces.
The results showed that while 65 percent of consumers claimed to know how to protect themselves from online retailers' abuse, on average they answered only 40 percent of the general knowledge questions correctly.
The general knowledge questions were "176 true-false questions about basic laws and practices of price discrimination and behavioral targeting," the survey said.
Basic questions included whether respondents believe a Web site is allowed to share information about the consumer without telling the consumer to whom the information was given. While 49 percent of consumers incorrectly asserted that this was false, this was not the most glaring statistic.
Three-fourths of consumers did not know that if a Web site has a privacy policy, it does not necessarily mean that the site will not share consumer information with other Web sites.
The Federal Trade Commission -- the government body that regulates commerce -- publishes many warnings about Internet retail security on its Web site. However, if the results of the survey are any indication, consumers are not reading them.
The FTC Web site encourages consumers to closely examine privacy policies, even those telling consumers that the retailer will disclose information.
"This policy should disclose what information is being collected on the Web site and how that information is being used," the FTC site said.
Turow believes that consumers are fooling themselves when it comes to online security and the privacy-policy statement.
"I think people are rushed," Turow said. "People like to believe that Web sites that have big names take care of their information properly, and when they see 'privacy policy' they assume that 'privacy policy' means [your information] stays private."
He believes that the consumer can simply be misinformed. "Its not that people don't care, but people don't know," Turow said.
Jen Liepin, a junior sociology and psychology major, also believes that much of consumer ignorance stems from laziness and unwillingness to investigate their own security.
"I don't think too many people think about it," Liepin said. "They're too busy talking on [AOL Instant Messenger] to notice it."
Liepin understands that companies practice deceptive policies, and she believes that there should be boundaries on Internet commerce.
"I think it is scary the way [Internet retailers] track us in so many different ways," Liepin said.
Co-author of the study and Communication doctoral candidate Lauren Feldman was shocked by the results but agrees that consumers could easily mistake a privacy policy to mean that information is kept private.
"I think they don't read it, and as Turow points out, the title is misleading," Feldman said.
The report also showed that consumers placed little faith in the government's ability to regulate Internet security.
Only 35 percent of consumers said that they trust the U.S. government to protect them from marketers who misuse consumers' information.
In addition, 64 percent of consumers did not know that it is legal for an online store to charge different people different prices at the same time of the day.
The study also found that most consumers were unaware that magazines to which they subscribe can sell their name and information to another company without their permission.
In the publication of the results, Turow and his fellow authors offered reforms that they believe will reduce the risk to consumers in the end.
He believes that the FTC should get rid of the privacy-policy label and replace it with a more accurate tag such as "using your information."
Turow also believes education for young people and government intervention to make retailers disclose what consumer information they have collected is the key to a more knowledgeable and security-savvy consumer.
