With a few keystrokes you can purchase your next vacation, add to your investment portfolio or even buy your next vehicle online. Available 24/7 at home, e-commerce is both convenient and entertaining. But is it safe?
Sure. In fact, security experts claim that online shopping is safer than shopping by mail order because personal data is stolen far more frequently from mailboxes than during secure online transmissions. Completing financial transactions in any arena warrants your attention, but because the internet is relatively new to commerce you'll need to know how the system works and what precautions you should take to ensure your online shopping experiences stay secure.
When shopping around online, be as picky as you are when shopping in town. Is the website owned by a merchant you trust? If you are checking out an online company for the first time, find their physical business address and phone number on the website. These are usually listed on a Contact Us page. Call, ask a few questions and check out the quality of their customer service. Learn how this seller handles product returns—do they offer full refunds or store credit only? Are you comfortable with the product guarantee and return policy? What about repair, service and warranty issues—how and where are these handled?
Since an online merchant collects private information from you during a purchase, you have a right to know what, how and where that data will be used. What information, exactly, does the company collect about you? Do they gather any data beyond what you type in? Is your information stored securely on their site? Does the company plan to share any information—such as your email addresses—with affiliate or third party companies? Read through a website's privacy and security policies before you buy so that you can evaluate your opt-out choices.
Some online merchants are members of programs that voluntarily adopt privacy standards. Such merchants will list these consumer-friendly associations on their websites. See www.BBBonline.org or www.TRUSTe.org for more information.
How can you tell if the website you've chosen will protect your privacy while online? Reputable merchants will use encryption technology to transfer all financial information you send. Encryption software encodes data to prevent thieves from stealing private information in transit. Only those with a special key on the receiving end will be able to decode and access the data.
The most common type used is SSL, or Secure Sockets Layer. When Internet Explorer® or Netscape NavigatorT browsers detect this security software in use, an "s" will follow the protocol HTTP in your address bar so that it reads: HTTPS. The S indicates a secure connection. A small padlock or key icon will appear at the bottom of your screen also, depending on your browser. By clicking on this icon you can view detailed security credentials from the certificate issuer.
In order for the SSL to work, website owners that cater to the general public license their sites yearly to receive a certificate of authenticity—proof that they are who they say they are, much like your driver's license serves as your legal identification. If your browser delivers a security warning that the website you are visiting does not have a security certificate, or that the certificate has been revoked or is out of date, be wary. But also be familiar with who is issuing the certificate. There are several reputable certifying authorities, most notably VeriSign®. Check the logo on the website that reveals who grants the certificate.
Entire websites aren't usually secure. Most bank or credit card sites, for example, have home pages filled with general information about their services that are accessible by anyone. Due to the slower speeds of encrypted transmissions, securing an entire site is impractical. When you want to access your own financial data at the bank, however, you must "log in," or enter an account number and password in order to move to the secure parts of the site.
Online merchants are the same. While browsing a company's picture catalog you move through unsecured web pages but when you go to the checkout area you'll be notified of the transition to a secure page. If you are not being notified when moving between secure and insecure pages online and want to be, check your browser's security preferences.
Never use a casher's check to pay, and never wire money to a merchant—you have no recourse if the deal goes bad. Also, don't buy into the common misconception that debit cards and personal checks (even electronic versions of your personal checks) are wise to use for online buys—both leave your checking account vulnerable. Instead, use credit cards for online purchases. Under the Fair Credit Billing Act you have the right to fight charges you dispute on your credit card, and during an ensuing investigation you won't be required to make payments on the disputed charges. If the investigators determine that someone has fraudulently used your credit card, you are only responsible for the first $50 in charges. Many credit card companies offer additional protection perks, too.
A few credit card companies have begun to offer single-use credit card numbers to their customers for online use. These services are available to credit card users who access their accounts online. After downloading special software to your computer you can automatically fill in an online purchase form with a credit card number that is different than your regular credit card number. This new credit card number can be good for either a single purchase (as with the American Express® Private Payments SM program) or reusable online whenever you buy from a certain merchant (as with Discover Card's Deskshop® program). Be aware, however, that some situations require your real card number—in particular, airplane tickets and hotel reservations. Any place you'll be required to show your actual credit card you must use the actual credit card number.
For those few who have not picked up the credit card habit, a pre-paid credit card may be your best fit. These look and act just like credit cards, only you foot the bill up front. A thief can't spend more than your chosen, pre-paid limit. And pre-paid cards offer the additional benefit of preventing debt.
Popular at online auction sites like eBay®, payment services such as Pay Pal® act as a middleman—a must for buyers who want security in a high-turnover market like an auction. Payment services validate the legitimacy of both buyer and seller.
Keep lists of passwords away from your computer unless you've used security software to encrypt the file. Use different passwords for each of account. Make your passwords at least eight characters long and combine numbers, letters, caps and symbols. Don't use familiar names, words, birthdays, addresses, or phone numbers in passwords. Instead, unique acronyms are memorable and can contribute to a tough password—perhaps the first letter of each word in a line from your favorite song. Never give out passwords in email or over the phone.
Finally, print a copy of your completed order confirmation or at least copy down your confirmation number and make a note of any additional correspondence or email. A printed proof of date purchased comes in handy if you ever need to use your warranty.
After you complete your online shopping, clean up after yourself. Take advantage of the washing features available in privacy software. These applications clear off the remnants of your online transactions that hide in quiet corners of your computer-bits of private information that hackers find invaluable.
When you understand the potential pitfalls involved with online buying and have implemented the suggestions above to avoid these, shopping online can be a safe and rewarding experience.
To compare privacy software features and read product reviews, see our Privacy Software Review.
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