By Carrie Kerskie, Director of the Identity Fraud Institute
You will never hear me say that anything is safe. Everything has risks. Online shopping has risks. Fortunately, there are tips that can help to reduce those risks.
Use a credit card
When you use a credit card, a debt of extended credit is created. When you use a debit card or credit/debit combo card, funds are withdrawn from your bank account. While the bank may replace funds lost to fraudulent transactions, they do not have to do it immediately. Further, they do not have to reimburse you for any overdraft you may incur as a result of the fraud. Therefore, when using a credit card online, it is the credit card company’s money that is at risk, not your money.
Shop at known websites
Viewing a website cannot tell you if the company is legitimate or a front for thieves. This is why it is best to only shop from well-known websites. Otherwise, your attempt to save money could cost you more in the end.
Verify the URL (web address)
Online scammers are very sophisticated. In an attempt to fool you, they will register a website that is one or two letters off from the legitimate website. For example, instead of Amazon.com, it might be Amazonn.com. Notice the extra “n” in the second one? This is why it is crucial that you verify the web address, the URL, is the correct one before placing an order or providing any information. The web address, URL, is typically located at the top of your web browser and starts with http: or https:
Look for the “S”
Before entering any sensitive information online, you need to verify that the webpage has implemented security measures by looking for “https” at the start of the web address, or URL. If it simply says “http,” then it is not secure. You can also look for the locked padlock near the web address. If the padlock is in the unlocked position, then the page is not secure. If it is not secure, DO NOT enter your sensitive information.
If it looks to good to be true, it is.
This is an oldie but still holds true today. Criminals will temp you with ridiculously low prices on hot items. Don’t fall for these scams. Sometimes, it is better to pay full price from a trusted retailer as opposed to taking a chance of having your information compromised.
Print your full receipt
Once you have placed your online order, print your receipt. The receipt will typically include your order number, shipping tracking number and a list of what you purchased. You will need this in the event you do not receive your order.
You don’t have to create an account
Many online retailers encourage you to create an account. This is not necessary. Doing so will require you to remember another username and password and could lead to more junk in your email inbox. However, the choice is yours. I only mention it as people don’t always realize it is not required.
Monitor your credit card statements
Depending on your situation, reviewing your credit card statements after holiday shopping could be a terrifying experience, but it will be more terrifying if you do not detect and report fraudulent charges in the time permitted by law. Criminals know credit card activity increases around the holidays giving them the perfect opportunity to throw in a fraudulent charge or two. Review and reconcile your statements as soon as they are available. If you observe any discrepancies, take action immediately by notifying your financial institution.
One of the best tools you can use is the free alert feature provided by most of the credit card companies and financial institutions. For example, American Express offers a “card not present” alert. When your credit card has been used online or for a transaction that does not require the physical card to be swiped, you will receive either an email or text message notifying you of the transaction. This is a simple and easy way to monitor for fraud in real time. Some organizations offer account balance alerts or transaction amount alerts. Contact your credit card provider or financial institution and inquire about the types of alerts offered.
Online payment services
PayPal or similar online payment services are a great tool to use while shopping online. When you make purchases using your PayPal account, the seller never sees your credit card or bank account information, but how does that work? When you create a PayPal account, you will link it to your bank account or your credit card or both. PayPal simply deducts the amount of the purchase from your bank account or charges your credit card before paying the retailer. This prevents the retailer or seller from ever seeing your financial information. As with anything, this is not without risk. The greatest risk here is that someone could hack into PayPal and steal your financial information, but this is true of any online company. However, if you provide your financial information to five online retailers, you now have five separate opportunities for exposure. If you were to use PayPal exclusively, you would have one opportunity for exposure. The choice is yours.