Prevent Identity Theft with Safe Online Shopping
This year, due to the poor economy and the mass layoffs sweeping the country, many people will do less holiday shopping.
Businesses that are counting on the holiday rush are working extra hard to promote their products because they already know that with the current financial challenges, it will be a rough year.
Some people may be able to find the best holiday deals online.
Many times online businesses do not have the overhead costs that brick and mortar stores do, so they can offer consumers lower prices. Great discounts on popular products can be found by doing a little research.
The drawbacks to shopping online are the risks of identity theft and fraud. The Identity Theft Resource Center (ITRC) knows all too well about these dangers and has published a list of safety tips for online and mail order shopping.
Be Secure
In order to keep your identity safe when shopping online, the ITRC recommends that you only shop at Web retailers that use technology to securely transmit your personal information and financial data. Secure Web sites encrypt your sensitive information while it is being sent to the payment processor.
This process keeps data safe from hackers and identity thieves.
In order to determine if a Web site is equipped with modern secure technology to handle transactions, check the URL of the order form. On secure Web pages; the Web address will begin with "https://", rather than the unsecure "http://".
You should check for the "s" in the URL of any page on which you supply personal or financial information.
Another sign that a Web site uses secure technology to handle customer data is the presence of a locked padlock in the lower left corner of the Web browser.
Shop with Merchants You Know and Trust
It is also recommended that you conduct your online business with trusted companies. That's not so say you can't shop at new online stores, but it pays to do a little research before placing your trust – and possibly your identity – into the hands of an unknown and unfamiliar merchant.
Trusted online companies provide a business address and contact number on their Web sites.
If a merchant is new to you, it might be helpful to call first to verify that the business is legitimate. Good questions to ask during the phone call would be about the company's return and refund policy, shipping times and methods, and the company's privacy policy.
While calling may give you more confidence about doing business with a vendor, it is true that anyone can set up a Web page and answer a telephone.
If you have any doubts or questions after calling, you can also check with the Better Business Bureau or your state Attorney General to be sure there are no outstanding complaints against the business.
Keep in mind that merchants in the United States are bound by state and federal laws, but it could be more difficult to resolve a problem with an international vendor.
Privacy Matters
It is important to review the Privacy Policy page at online stores to determine how your personal information may be handled and used by the company. Any reputable company will post a privacy policy to let you know how your order will be processed and whether your name, e-mail address and telephone number will be shared with (or sold to) third parties.
When a privacy policy is absent or ambiguous, doing business is risky. You could make a purchase only to find yourself later being bombarded with annoying spam e-mails and telemarketing phone calls.
Your best bet may be to do business with merchants that are members of programs, such as TRUSTe or BBBonline, which set voluntary guidelines for privacy practices.
Credit Cards: The Safest Payment Method
Consumers who pay for purchases with credit cards are protected by the federal Fair Credit Billing Act. This law allows cardholders to dispute charges in the event that something goes wrong with the purchase after paying by credit card.
By filing a dispute, the cardholder is allowed to withhold payments on the purchase during the investigation period. In cases that involve credit card use without authorization, the law protects the cardholder by only making them responsible for the first $50 of fraudulent charges.
No other type of payment offers this type of consumer protection.
The ITRC recommends that consumers who shop online have one credit card that is dedicated for online use. When a credit card is used only for online purchases, it is easier for the consumer to detect any instances of fraudulent charges and allows them to be quickly reported. In any case, all credit card statements should be reviewed line-by-line each month for any unusual activity.
Provide Only Necessary Information Online
For some reason, some online stores and vendors will attempt to collect far more information from consumers than is actually necessary to complete the transaction. This is a red flag, as the information will most certainly be used for marketing in the best cases, and possibly identity theft or fraud in the worst case scenario.
Consumers should never provide a Social Security number to an online vendor unless applying for a line of credit. Social Security numbers are never necessary to complete a simple online purchase.
One more time, just for clarity – Never provide your Social Security number on an order form when making an online purchase.
There is never a need for an online merchant to have your Social Security number in order to collect payment and ship your order. You should be suspicious of any merchant that requests more information than necessary to complete the transaction.
If you have any doubts or concerns, the best bet is to close your browser window and shop elsewhere. Be safe, not sorry.
Phishing and Imposter Web Sites
Online identity thieves are a slick group and are constantly coming up with new tricks to commit fraud and theft online. One known trick that is popular with fraudsters is called phishing.
Web sites that look like popular Web sites that you are familiar with are set up with the sole intention of tricking consumers into submitting personal information, credit card numbers, PIN, passwords or account numbers.
Often consumers arrive at these fake Web sites that look like the real thing through a link sent to them via an official looking, yet fake, e-mail.
It is very important to check the URL of a Web site before providing any personal information such as an account number, PIN code or password.
Often you may be tricked into thinking you are logging in to a site you regularly do business with, but when you log into the fake site, you are unwittingly providing the thief with access to your account.
To be safe, never click any links contained in e-mails. If you have concerns that a legitimate business is attempting to contact you, you may call them or type the correct Web address into your browser yourself.
Keeping Records of Online Purchases
Merchants usually e-mail customers an order confirmation and receipt after an online purchase.
These e-mails should be kept, along with a printed copy of the company information, terms and conditions and the sales and order pages of the Web site. These records should be kept on file until the return period or warranty on the purchase expires.
Be Cautious and Aware, then Relax
Although there are many dangers online and no shortages of scammers, if you are aware of the dangers, know how to identify and check for fraud and take proper precautions, online shopping can be safe.
Identity theft can be devastating and can lead to many financial problems, including filing bankruptcy.
It pays to follow your gut, and if something looks suspicious, do not proceed with any transaction or login. Also, the old adage applies with online shopping: If it looks too good to be true, it probably is.
By following recommended precautions and being aware of your online activity, you should be able to safely shop online.
Learn more about identity theft, finances and bankruptcy at the Total Bankruptcy Newsroom.