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Protect your privacy online

Facebook, phishing, ID theft, and more threaten your peace of mind

Consumer Reports magazine: June 2012

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Consumers’ privacy has taken a big hit over the past year. Identity theft is up, according to our latest national State of the Net survey. Google and Facebook are expanding their reach into more and more corners of people’s online lives. And clashes are escalating over hot-button issues such as privacy controls, data mining, and online piracy.

With some of those battles looming, a good way to start the discussion is with a sobering report from the Consumer Reports National Research Center.

Almost 16 million households have become the victims of identity theft over the past year, up almost 50 percent, we project, based on our nationally representative survey of 2,002 respondents. Almost half of the victims—7.8 million—were notified that their personal information was hacked or lost by a company, government agency, or some other organization. That’s more than double our projection a year ago.

The problem is far from theoretical. About 7.4 million households reported that an unauthorized person placed charges on one of their existing credit-card accounts.

That trend is likely to persist this year, especially given the recent report by a major credit-card processor, Global Payments, that hackers broke into its computer systems and stole information on almost 1.5 million accounts. The company services major credit-card brands around the world, and it also handles debit cards, electronic check transactions, and similar services.

The incidences of e-mail spam and online users falling prey to “phishing” schemes, in which consumers are prompted to send personal information to a website or e-mail address masquerading as a legitimate one, have remained at about the same worrisome levels as we found last year. More than 9 million consumers have inadvertently submitted personal information to a phishing e-mail scam in the past 12 months, our study projects.

The privacy disruptions are causing real harm. When you tally up the damage, we estimate that 1.6 million households had to replace a computer and that the total national cost due to malware infections was almost $2.3 billion.

This evidence of consumers’ online vulnerabilities comes at a time when Web behemoths Facebook and Google are under fire for data-collection practices that critics say could infringe on consumer privacy and pose security risks. Both companies have settled allegations with the Federal Trade Commission, which requires them to undergo independent privacy audits for the next 20 years. And government officials on both sides of the Atlantic are proposing new online privacy rules aimed at giving consumers greater control over how personal data about them is collected and used.

A Privacy Bill of Rights could give consumers more safeguards.

The urgent need to provide greater protection for consumers is underscored by the results of our survey, which this year included expanded coverage of Facebook to gain greater insight into people’s behavior on and attitudes toward the Internet’s most visited website. That’s especially important because your personal information is a key element of Facebook’s business: The more you share with friends and acquaintances, the more data Facebook has to slice, dice, and market. Early this year, the company laid the groundwork for an initial public stock offering that was expected to raise billions to further expand its reach into the lives of consumers around the world.

The issues are gaining steam, with the White House proposing a Consumer Privacy Bill of Rights and getting many in the advertising industry to support the “Do Not Track” tools included in such Web browsers as Mozilla Firefox and Microsoft Internet Explorer.

The White House also proposes that companies provide consumers with control over their personal data through easily used and accessible tools that include the ability to withdraw or limit a consumer’s consent. And it says that consumers have a right to clear information about a company’s privacy and security practices, including what data the company collects, how it uses it, and for what purposes it may share it.

In our special report on privacy, we investigate what Facebook knows about you and explain how it collects information you didn’t even put on the website. And we’ll tell you why it’s easier for European consumers to find out what information Facebook has about them. We also rate the top security software and tell you why a free package may be your best choice. And we give you tips on how to keep control of your life online to give you help in the privacy wars.

Editor's Note:

A version of this article appeared in the June 2012 issue of Consumer Reports magazine with the headline "Protect Your Privacy."



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