Prevent/Control Identity Theft: Impact on Trust and Consumers’ Purchase Intention in B2C EC

Prevent/Control Identity Theft: Impact on Trust and Consumers’ Purchase Intention in B2C EC

Mahmud A. Shareef (North South University, Bangladesh) and Vinod Kumar (Carleton University, Canada)
Copyright: © 2012 |Pages: 31
DOI: 10.4018/irmj.2012070102


This study provides an application framework toward measures to prevent/control identity theft in conjunction with sources. It also identifies the impact of overall protection of identity theft on consumer trust, the cost of products/services, and operational performance, all of which in turn contribute to a purchase intention using E-commerce (EC). For the first objective, this study proposes a matrix of sources and measures to prevent and control identity theft. From this matrix, using knowledge from a literature review and judgment based on plausibility, the authors identify global laws, controls placed on organizations, publications to develop awareness, technical management, managerial policy, risk management tools, data management, and control over employees are the potential measuring items to prevent identity theft related to EC. A case study in banking sector through a qualitative approach was conducted to verify the proposed relations, constructs, and measuring items. For the second objective, this research paper conceptualizes a model based on literature review and validates that based on the case study in the financial sector. The model reflects the effects of preventing and controlling identity theft on the costs of products/services, operational performance, and customers’ perception of trust, which would lead to purchase intention in EC.
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1. Introduction

Though the major source of identity theft is not E-commerce (EC) transactions (Collins, 2003; Newman, 2004); identity theft plays a significantly negative role in purchase intention for the consumers of EC. Different plausible measures to prevent/control identity theft are advocated in recent literature, newspapers, and government policies. This current research addresses the issues of identity theft; source, type, and preventive measuring tools; and the effect on consumers’ purchase intention in business-to-customer (B2C) EC. Identity theft is a new type of crime, facilitated through established and traditional crimes such as forgery, robbery, stealing, counterfeiting, check and credit card fraud, computer fraud, impersonation, and pick pocketing (Mediati, 2010). With the passage of the Identity Theft Assumption and Deterrence Act.1 in 1998, the United States declared identity theft a crime. Identity theft is defined as the illegal and unauthorized acquisition of personal identity in order to engage in unlawful acts (Seminole County Sheriff’s Office, 2003; Sorbel, 2003). California Department of Motor Vehicles (2002) described personal identifying information as a person’s name, address, telephone number, driver’s license number, social security number, place of employment, employee identification number, mother’s maiden name, demand deposit account number, savings or checking account number, or credit card number. Identity theft may be broadly defined as the unlawful acquisition and/or use of any aspect of an individual’s personal information for the commission of some form of criminal activity (Hoar, 2001; LoPucki, 2001; Slosarik, 2002). Identity theft occurs when thieves use the personal or financial information of a person (the victim) to create a fake identity. This fake identity is used to obtain money from the victim or an institution, credit, goods, services, privilege, any type of opportunity, or property to commit a felony or misdemeanor, or to hide personal identity. It is the fastest growing crime in America (Nakasumi, 2003). According to Gartner Research and Harris Interactive, approximately 7 million people became victims from August 2002–July 2003. This was a 79% increase from the previous year (Gartner Group, 2003). A national survey conducted by the U.S. Federal Trade Commission (FTC) (2008) revealed that 4.7% of the American adults surveyed reported having been a victim of identity theft that involved the use of their personal information within the previous five years. Furthermore, results from the same survey estimate that nearly 3.25 million Americans had their personal information fraudulently used within the 12 months prior to September 2007. The FTC (2008) reports that identity theft is the prime cause of the consumer complaints it receives; almost 32% of all those received in 2007. Such complaints numbered 258,427. According to the Identity Fraud Survey Report of Javelin Strategy and Research (2006), in the USA the total amount of fraud in one year rose from $53.2 billion in 2003 and $54.4 billion in 2005 to $56.6 billion in 2006. The mean fraud amount per fraud victim rose from $5,249 in 2003 and $5,885 in 2005 to $6,383 in 2006.

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