Q: If possible, I’d like to hear more about credit card fraud when online shopping. Are there any e-tail Web sites out there that are actually secure? — Greg
A: There has been much misinformation spread about online shopping that has given many the impression that the Internet is the cause of most credit card fraud. Credit card fraud (as a % of ID theft complaints) has actually been on the decline for six straight years according to a Feb 2009 FTC report.
The reality is that, by following a few simple rules, Internet based transactions can actually be one of the most secure ways to use your credit card (because no human other than you is involved in the transaction).
Credit card fraud schemes have been around a lot longer than the Internet and the time tested methods of gaining access to your credit cards (stolen wallets and purses, dumpster diving, etc.) are still the most likely way that you will become a victim of credit card fraud.
When it comes to shopping online, retailers that offer e-commerce always use secure pages in order to complete a transaction (or you should run away from them!)
If you make sure that the page that you are about to enter credit card info onto has the https:// instead of just http:// (should also display an image of a yellow lock either in the bottom right corner or next to the address bar) then you are working with a “secured” page.
The real threat from online transactions are a lot less about the sites that you do business with and lot more about how you use and maintain your computer.
If you don’t keep your operating system updates current, keep your anti-malware programs up-to-date or fall for any of the thousands of e-mail phishing or fake download scams, then you could easily allow a silent “keylogger” to be installed to record every keystroke that you make.
If you notice that your computer is taking a long time to startup and that it seems to be very slow, especially when you try to do things on the Internet, you may want to avoid any kind of electronic transactions or online banking until you get your system inspected.
These hidden programs are getting more and more sophisticated and depending upon which scam you fell for, they can side-step your protection programs because they got you or your children to download something that had a hidden Trojan program in it.
Credit card companies have done a really good job of making it easy to report fraud and shield their customers from any financial losses (most every company has a 0 liability policy when fraud has been determined).
As a side note, debit cards typically carry similar coverage for fraud, but if someone uses your debit card fraudulently, the amount in question is tied up until things get cleared up, meaning that your checking account balance is impacted immediately. Be careful where and how you use your debit card (not just online).
Another common non-Internet scam that is on the rise is credit card ‘skimming’. Credit card thieves are bribing restaurant and retail employees into double swiping cards on a small portable recording device and paying them for each card they skim (much easier to find willing participants in a down economy).
Do your best to watch anyone that you give your credit card to and try not to allow your card to leave your site if you can help it (or pay cash if you aren’t comfortable with the situation).
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