Nearly half of Australians surveyed by the Office of the Australian Information Commissioner (OAIC) cited social media websites as the greatest risk to their privacy.
The Community Attitudes to Privacy survey was conducted in June 2013 with 1000 Australians by Wallis Consulting Group.
It found that 48 per cent of Australians believe online services, including social media, pose a privacy risk while only 9 per cent of respondents considered social media websites to be trustworthy when it came to protecting their privacy.
Australian Information Commissioner, Professor John McMillan, said the survey results confirm there's a growing concern in the community about privacy risks associated with social media since the survey was last conducted in 2007.
The survey also found that consumers want data security protection to be similar in both the public and private sectors. For example, 96 per cent of survey participants expect to be informed if their information is lost by a government agency or public company.
In addition, 95 per cent of respondents wanted to be made aware how of their information is handled on a day-to-day basis.
Over 60 per cent of Australians surveyed decided not to deal with an organisation because of concerns over how their personal information had been or may be used. This was an increase from 40 per cent in 2007's survey.
Privacy Commissioner Timothy Pilgrim said the results showed there is a business imperative for organisations to be more transparent about their personal information handling practices.
"With a significant number of people saying that they have decided not to deal with an organisation due to privacy concerns, I suggest that business needs to listen to this and consider improving their practices," he said in a statement.
"Businesses must ensure that privacy is built in to systems and processes right from the beginning."
International sharing of personal information was also a growing concern for Australians with 79 per cent of respondents citing cross-border disclosure as a misuse of information.
"This is an interesting finding given the increasing frequency with which data is being sent off-shore," Pilgrim said.
"The Privacy Amendment (Enhancing Privacy Protection) Bill 2012 which comes into law in March 2014 will increase protection around the handling of Australian information that is transferred off-shore, and it will be interesting to see how attitudes change as a result of this," he said.
Lastly, survey participants were asked whether certain industries were trustworthy. The three most trustworthy industries were health service providers, trusted by 90 per cent of participants; financial institutions, trusted by 74 per cent (up from 58 per cent in 2007); and government, trusted by 69 per cent of respondents.
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