Last Updated Dec 14, 2010 12:40 PM EST
You can shop safely online, consumer experts contend. You just need to know 8 rules.
1. Never pay with a money order. Legitimate retailers accept credit cards; PayPal and other online payment services that provide you with a modicum of security. Crooks prefer that you wire money through Western Union or Money Gram. Why? They can get the cash fast and it's difficult to trace, said Susan Grant, CFA's director of consumer protection. "It's like putting cash in an envelope and sending it to a stranger," Grant said. Nearly one third of people who complained that they had not received what they ordered had paid through a money transfer service, she said.
2. "S" stands for "secure": When you hit the payment screen to buy online, look at the address in the web browser. It should start with either "shttp" or "https" vs. a simple "http." That additional "s" means that the site is turning your account number into an encrypted code so that other people can't easily read it. You'd also be wise to look for other security certificates, like VeriSign or McAfee Secure, and click on them to make sure that the site has met their security criteria. Don't plug your payment information into a site that fails to offer security. And never email your credit card numbers.
3. Keep Anti-Virus Software Up-to-Date: The latest Internet scam involves getting consumers to web sites that look innocuous but secretly load computers with keystroke-tracking viruses that can allow the crook to track your movements on the web and capture your credit card and bank account numbers. The best defense against this is anti-virus software, such as Norton AntiVirus or McAfee Total Protection, which will warn you when you're venturing into a site that contains malware.
4. Don't shop in public: Never conduct a secure purchase transaction from an insecure wireless network. You can check your Facebook messages from the Wifi connection at Starbucks, but don't use it when you're pulling out your MasterCard. When you're buying something or checking your bank balance, make sure that your wireless connection is as secure as your computer.
5. Check Out Your Retailer: If you're dealing with a retailer that you don't personally know, don't just rely on "star" ratings from other buyers or on-site testimonials. Those can be as counterfeit as their goods. Do a quick web search instead. It takes only a few seconds to open a new browser window and type in the retailer's name and "complaints" in a Google search. If you see dozens of complaints at sites like Rip-Off Report and the Complaints Board, walk away. You can also check the retailer's Better Business Bureau rating by clicking their "check out a business or charity" button. This simple check could have saved thousands of consumers from an abusive online retailer, who was recently arrested for fraud and threatening the lives of his dissatisfied customers.
6. Use a credit card: Even if your retailer has a clean history, there are no guarantees that your purchase will go smoothly. Using a credit card gives you the most protection in an online setting, said Grant. A credit card is one of the few payment systems that guarantees you the right to dispute charges if the goods and services you bought were misrepresented or didn't arrive. Debit cards, which are governed by a different law, do not give you the legal right to dispute a charge that you initiated even if the goods are broken or counterfeit, she said. To be fair, most debit card issuers voluntarily allow you to dispute the same transactions that you can dispute with a credit card, but they are not legally required to do so, she said. There are at least 5 other reasons why using a debit card is more dangerous than using credit.
7. Keep records: Be sure to save your order information and confirmations that show how much you paid, when you paid it; and when the goods were supposed to arrive. That gives you the documentation you need to dispute charges, if you need to later.
8. Beware Phishing and Smishing: Legitimate companies do not send emails or text messages that ask you to confirm personal information. If you get such a message, it's a scam. Don't click on the link or call the number. Delete the message, Grant suggests. If you have any questions about whether your retailer needs further information, look the retailer up on the web and call the consumer service number listed on their public web site.
More on MoneyWatch
6 Lousy Gifts Your Mom Doesn't Want
Gifts that Teach Teens About Money
Is the Boss Spying on Your Online Shopping?
The 3 Most Annoying Facebook Habits
Online Retailer Charged with Fraud, Threats
4 Things You Shouldn't Buy at Target