Among the households citing an identity theft concern, 35% reported they avoided conducting financial transactions online during the year before the survey, compared to 18% of online households that did not name the concern. Similarly, 33% of online households concerned about credit card or bank fraud declined to buy goods or services online, compared to 21% without that particular concern.

“It is clear that many Americans have serious concerns about privacy and security on the internet,” Rafi Goldberg, policy analyst for the Office of Policy Analysis and Development Privacy at NTIA, said. “NTIA's most troubling finding comes from a series of questions about whether households had refrained from participating in certain online activities due to privacy or security concerns during the year prior to the survey.”

The report also indicated the most direct threat to maintaining consumer trust is negative personal experience. Nineteen percent of internet-using households, which equals nearly 19 million households, reported experiencing an online security breach, identity theft, or another malicious incident during the year prior to the survey.

Security breaches appeared to be more common among the most intensive internet-using households. For example, while 9% of online households using just one type of computing device (a desktop computer, laptop, tablet, internet-connected mobile phone, wearable device or TV-connected device) reported security breaches, 31% of those using at least five different devices suffered this experience.

Privacy and security concerns were more prevalent among online households affected by a security breach during the year before the survey. Seventy percent of such households named identity theft as one of the issues that concerned them the most, compared to 62% of their peers who did not experience a breach.

The fallout from this distrust of internet privacy and security extends beyond commerce. For example, 29% of households concerned about government data collection said they did not express controversial or political opinions online due to privacy or security concerns, compared to 16% of online households that did not voice this concern.

“With all of the recent breaches we have seen in 2015, it is no surprise to see that e-commerce is being impacted by cybersecurity,” Dodi Glenn, vice president, cybersecurity at the Sioux City, Iowa-based PC Pitstop, said. “Households have other means of conducting financial transactions, such as visiting the actual bank, so they feel the risk is simply not worth being able to conduct online transactions. What I find more concerning is that not only are the households concerned about conducting financial transactions, they also seem to have little faith in our government.”

Eldon Sprickerhoff, chief security strategist at the Canadian cybersecurity firm eSentire, added, “Over the last year alone, consumers have become far more aware of online risks, particularly thanks to credit card and website data leaks, such as Ashley Madison and LinkedIn credential loss. There have also been a rash of consumer websites that have suffered from covert malware distribution through infected advertising networks. It's unfortunate that e-commerce will suffer as a result of consumer caution, but it's encouraging to see that, at a broad level, the public is becoming more vigilant in protecting their data, especially given the heightened risk with which they're confronted every time they go online.”