Nearly half of all Americans have not carried out a normal online task because of security and privacy fears, according to a new survey by the US government.

Forty-five per cent of the 41,000 households contacted said they had decided not to do online banking, or buy goods online, or post on social networks because they were worried about what might happen. Just under a third of them said they had stop several of those activities over the same fears.

The survey by the Department of Commerce's National Telecommunications and Information Administration (NTIA) makes for sober reading. It also makes a direct connection between people scaling back their online activities and the impact of a wave of recent security breaches of personal data.

An extraordinary 19 per cent of households - which extrapolates to nearly 24 million households across the US - have been personally affected by an online security breach in the past year.

That's perhaps not surprising given the big-name consumer companies impacted, including, to name just a few: Target, Home Depot, Verizon, Wendy's and Kiddicare - the last two reported just this week.

Those that have been the victim of a data breach are significantly more likely to scale back their online activities, the survey found: on average nine per cent.

It gets worse

The data also reveals a sad truth: the more you do online, the more likely you are to have your information compromised.

Of households that reported only having one online device like a computer or laptop, "just" six per cent of them said they had been victim of a data breach. That percentage goes up almost linearly to an appalling 31 per cent of households with five or more online devices.

Households Reporting Online Security Breaches by Number of Different Types of Devices Used, Percent of Households with Internet Users, 2015

In that respect, the decision by more and more American to opt out of online tasks is a logical one. But it is also one that has significant economic impact given the extent to which companies are moving their goods and services online.

"Every day, billions of people around the world use the Internet to share ideas, conduct financial transactions, and keep in touch with family, friends, and colleagues," an NTIA policy analyst Rafi Goldberg wrote in a related blog post.

"Users send and store personal medical data, business communications, and even intimate conversations over this global network. But for the Internet to grow and thrive, users must continue to trust that their personal information will be secure and their privacy protected."

Of people's fears, identity theft sits at the top with 63 per cent of people citing it as a real concern. Second comes credit card and banking fraud with 45 per cent. Then data collection by online services, loss of control over personal data, data collection by the government, and threats to personal safety with 23, 22, 18 and 13 per cent respectively.

Answers?

What does this mean? The NTIA isn't sure beyond the fact that something clearly needs to be done. It points out that its analysis has "only scratched the surface" but even that initial review has made it "clear that policymakers need to develop a better understanding of mistrust in the privacy and security of the Internet and the resulting chilling effects."

It warns, not without some justification, that unless something is done to increase trust it "may reduce economic activity and hamper the free exchange of ideas online."

There are some policy plans afoot: the Obama Administration has put out draft privacy legislation, and the NTIA is running a number of processes with a range of stakeholders on online privacy and cybersecurity, including its current one on the internet of things.

The release of this data however demonstrates that there is a very real impact of security and privacy breaches. And it blows apart the idea that a move to online activities is somehow inevitable by showing that people do in fact scale back when impacted. That reality may serve as a catalyst for businesses to get serious about fixing problems and invest in make the online experience a safe, more secure one. ®