January 2007

Throughout 2007, the number of people shopping online and the number of purchases online is expected to continue to grow rapidly. Whether you buy online frequently or just occasionally, online shopping isn't risk or hassle free, however. As you start the New Year, here are some good pointers and tips for shopping safely on the Internet.

How should you pay for your purchase?

Always make payment for your purchase through the shopping cart or payment service setup by the website. If any seller wants you to make other arrangements to send the payment don't complete the transaction.

Paying by credit card is the safest choice. When you use a credit card, you can dispute the charges and usually the credit card company will help you resolve the issue. Under federal law you are liable for no more than $50 should your card be used without your knowledge and permission. Many credit card companies have implemented a $0 liability policy.

Another option is to use an online payment service such as PayPal. These services may offer some protections. Check out the website for any protections provided and conditions for using the service.

Paying by debit card or electronic funds transfer is very risky. You are giving the seller access to your bank account. If more money than you authorized is removed from your account, getting it back could take months, if you get it back at all.

Never pay for an online purchase by sending cash directly to the seller. Once you have sent cash you usually have no recourse should you not receive your order

Check out special protective credit card programs. Credit card brands and issuing banks offer various programs that can help protect your account number when used online. Check with your card issuer to see if they offer one of these services:

• One-time use or temporary numbers. These numbers are offered by some credit card issuers—for example Discover—and some banks. Note that you usually can't use these for making a purchase online that you'll pick up in person because many merchants want to see the card used for the purchase to verify that you are the person who paid for the merchandise.
• Extra passwords. These programs are offered by credit card issuers. Visa's program is Verified by Visa. When you make a purchase at participating online stores you'll be asked to input your password. Note that you can still use your card at stores that don't participate in the program.

Thoroughly check out a seller before purchasing

Before you whip out that credit card to pay for the deal you just found, make sure you check out the site—even well known sites—using these tips:

• The contact information should include a physical address and phone number. If the only contact information is an email address, this is a large red flag — find another merchant. If there is a phone number but no physical address—a post office box isn't sufficient—call the phone number and see if you can talk to a person. Anyone can set up voice mail or an answering machine.
• Check out the reputation of the seller through the local Better Business Bureau or state Attorney General.
• Find and read the privacy policy. It should tell you what personal information it collects, why it collects it, and how they are going to use it. Can't find the privacy policy or don't like what you read — take your business elsewhere.
• If a site asks for your social security number and date of birth — go elsewhere. No merchant needs to know that information. With these 2 pieces of information someone can apply for credit cards in your name.
• Make sure the address line in your browser shows "https" and that the browser shows a locked padlock or key. This indicates that the information sent between your browser and the website is encrypted.
• Use a firewall and antivirus and antispyware software. Keep them up to date and run scans regularly.

By taking precautions, shopping online can be quick and easy, leaving you with more time to spend with family and friends or on activities you enjoy throughout the year.

For more information

10 Tips for Smart Holiday Shopping Online
This article was introduced for the holidays but it's advice is good year round.

Protect yourself when shopping online

Shop with Speed and Ease on the Internet, But Be Cyber-Savvy!

Prepared for Corning Credit Union by Remar Sutton & Associates, January 2007. All rights reserved.