Fact Sheet 103
Online Commerce
ONLINE SHOPPING, BILL-PAYING and BANKING TIPS
This fact sheet offers advice on how to make your online experiences enjoyable and safe. The following subjects will be discussed:
- Secure web sites
- Research the vendor or web site
- Privacy policies
- Shopping safely
- What information to provide
- Check the authenticity of the web address or url
- Keep photocopies of the order
- Shipping and refund tips
- Use Shopper’s Intuition
- Be Wary of Identity Theft
In recent years, more people find the Internet a convenient way to shop, pay bills and track banking activity. The world of electronic commerce, also known as e-commerce, has enabled disabled people access to locations, expanded our purchasing abilities from local retailers to world-wide companies and given us the ability to monitor bills and accounts daily. For many, the Internet has taken the place of Saturday afternoon window shopping at the mall.
The same things can go wrong shopping in cyberspace as in the real world. Sometimes it is simply a case of a computer glitch or poor customer service. Other times, shoppers are cheated by clever cybercrooks.
1. Shop at Secure Web Sites
How can you tell if a web site is secure? It uses security technology to transfer information from your computer to the online merchant’s computer. This technology scrambles the information you send, such as your credit card number, in order to prevent computer hackers from obtaining it “en route.” The only people who can unscramble the code are those with legitimate access privileges.
The following items shown in your web browser will indicate a secure web site.
• First, if you look at the top of your screen where the web site address is displayed, you should see https://. The “s” that is displayed after “http” indicates that web site is secure. Often, you do not see the “s” until you actually move to the order page on the web site.
• Another way to determine if a web site is secure is to look for a closed padlock displayed at the bottom of your screen. If that lock is open, you should assume it is not a secure site.
• The third symbol that indicates you are on a secure site is an unbroken key.
2. Research the Web Site before You Order
Do business with companies you already know. If the company is unfamiliar, do your homework before buying their products.
Reliable companies should advertise their physical business address and at least one phone number, either customer service or an order line. Call the phone number and ask questions to determine if the business is legitimate. Even if you call after hours, many companies have a “live” answering service, especially if they don’t want to miss orders. Ask how the merchant handles returned merchandise and complaints. Find out if it offers full refunds or only store credits.
You can also research a company in Internet yellow pages, through the Better Business Bureau (see listing below), or a government consumer protection agency including the district attorney’s office or the state Attorney General. Perhaps friends or family members who live in the city listed can verify the validity of the company. Remember, anyone can create a web site.
Shop in a store that has locations within the U.S. These stores must follow specific state and federal consumer laws. You might not get the same protection if you place an order with a company located in another country.
3. Read the Web Site’s Privacy and Security Policies
Every reputable e-commerce web site offers information about how it processes your order. It is usually listed in the section entitled Privacy Policy. You can find out if they intend to share your information with a third party or affiliate company. Do they require these companies to refrain from marketing to their customers? If not, you can expect to receive “spam” (unsolicited e-mail) and even mail or phone solicitations from these companies or others.
Look for online merchants who are members of a seal-of-approval program that sets voluntary guidelines for privacy-related practices. TRUSTe ( www.truste.org ) and BBBonline ( www.bbbonline.org ) are two such programs.
Be aware that a strong privacy policy and membership in a web seal program do not guarantee that the web merchant will protect your privacy for all time. Policies change. The company could go out of business, or sell its customer database. The web merchant might be purchased by another company with a weaker privacy policy. The company’s data could be subpoenaed for law enforcement investigations or civil cases. This is why it is important to evaluate who you do business with, and why. See Fact Sheet 102 Consumer Risk Test .
4. Shopping Safely: Credit Cards, Debit Cards, Cash, or Checks?
The safest way to shop on the Internet is with a credit card. In the event something goes wrong, you are protected under the federal Fair Credit Billing Act. You have the right to dispute charges on your credit card, and you can withhold payments during a creditor investigation. When it has been determined that your credit was used without authorization, you are only responsible for the first $50 in charges. We recommend that you obtain one credit card that you use only for online payments to make it easier to detect wrongful credit charges, and keep your other cards from being exposed.
E-commerce shopping by check leaves you vulnerable to bank fraud. Sending a cashier’s check or money order doesn’t give you any protection if you have problems with the purchase.
Make sure your credit card is a credit card only and not a debit card, a check card, or an ATM card. As with checks, a debit card exposes your bank account to thieves. Your checking account could be wiped out in minutes. Further, debit and ATM cards are not protected by federal law to the extent that credit cards are.
5. Disclose Only the Bare Facts When You Order
Never provide a Social Security Number to a vendor unless you are opening a new line of credit. ITRC does not recommend opening a new credit card with a company you don’t know. When placing an order, there is certain information that you must provide to the web merchant such as your name and address. Often, a merchant will try to obtain more information about you. This information is used to target you for marketing purposes. It can lead to “spam” or even direct mail and telephone solicitations.
Don’t answer any question you feel is not required to process your order. Often, the web site will mark which questions need to be answered with an asterisk (*). Should a company require information you are not comfortable sharing, leave the site and find a different company for the product you seek.
6. Check the Web Site Address
Above the web site at the top of your screen is a rectangular window that contains the web site address (also called the URL, or Uniform Resource Locator). By checking that address, it can give you clues as to whether you are dealing with the correct company.
Cyber-thieves have created web sites that look convincingly like the web sites of well-known companies. These sites capture the credit card numbers of unwary shoppers. The thieves then use the stolen credit card numbers to make fraudulent purchases in the shopper’s name. If these shoppers had checked the URL at the top of the screen, they could have noticed that it was not the same address as the real company.
Before making online purchases it is a suggested good practice to inter the company name into a web search engine. This research should show information about this company, including bad reports. You may also do this research for the product you wish to purchase.
7. Print and Keep Confirmation Order
After placing an order online, you should receive a confirmation page that reviews your entire order. It should include the costs of the order, your customer information, product information, and the confirmation number.
Print out at least one copy of the web page(s) describing the item you ordered as well as the page showing company name, postal address, phone number, and legal terms, including return policy. Keep it for your own records for at least the period covered by the return/warranty policy.
Often you will also receive a confirmation message that is e-mailed to you by the merchant. Be sure to save and/or print this message as well as any other e-mail correspondence with the company.
8. Know Shipping and Return Product Rules
A company must ship your order within the time stated in its ad. If no time frame is stated, you should inquire how long the delivery will take. This gives you an opportunity to cancel the order and receive a prompt refund, or agree to any delay.
Here are key shipping considerations:
• Does the site tell you if there are geographic or other restrictions for delivery?
• Are there choices for shipping?
• Who pays the shipping cost?
• What does the site say about shipping insurance?
• What are the shipping and handling fees, and are they reasonable?
Even under the best of circumstances, shoppers sometimes need to return merchandise. Check the web site for cancellation and return policies.
• Who pays for shipping?
• Is there a time limit or other restrictions to the return or cancellation?
• Is there a restocking charge if you need to cancel or return the order?
• Do you get a store credit, or will the company fully refund your charges to your credit card? If the merchant only offers store credits, find out the time restriction for using this credit.
Don’t expect less customer service just because a company operates over the Internet. This is especially important if you are buying something that may need to be cleaned or serviced on occasion.
• Does the merchant post a phone number and/or e-mail address for complaints?
• How long has the company been in business?
• Will they still be around when you need them?
• Is there an easy, local way for you to get repairs or service?
• Is there a warranty on the product, and who honors that guarantee?
• What are the limits, and under what circumstances can you exercise your warranty rights?
9. Use Shopper’s Intuition
Heed the old adage, “If it looks too good to be true, it probably is.”
• Are there extraordinary claims that you question?
• Do the company’s prices seem unusually low?
• Does it look like the web site look sloppy or amateurish?
• Does the company’s phone go unanswered?
• The use of a post office box might not send up a red flag, but a merchant who does not also provide the company’s physical address might be cause for concern.
If any of these questions trigger a warning, you will be wise to find another online merchant or buy the product in a store.
10. Be Wary of Identity Theft
As e-commerce becomes more common, there will be more cases of identity theft committed over the Internet. Identity thieves are increasingly using the web to scam you and gather credit card, checking account, debit card or Social Security Numbers. Be aware of this trend. Please refer to the ITRC Fact Sheet 123 Scam Victims
Check your credit card bills carefully for several months after purchasing on the Internet. Look for purchases you did not make. If you find some, immediately contact the credit card company and file a dispute claim.
Order your credit reports at least once a year and check for accounts that have been opened without your permission. Please see the ITRC Fact Sheet 125 How to Order Your Free Credit Report.
11. Be Cautious with “Electronic Signatures”
A recent federal law enables shoppers to verify online purchases with merchants using an “electronic signature.” Usually, this process is nothing more than clicking on a box that says you accept the terms of the order.
The Electronic Signatures in Global and National Commerce Act, also known as the E-Sign Act, is a complex law. It states that electronic signatures and electronic records used in interstate and foreign commerce will not be denied validity just because they are in electronic form. Further, the law says that online purchases do not need to be accompanied by the more traditional handwritten signature on a paper document.
Consumer advocates opposed the law because it lacks important safeguard against fraud. For example, the law does not require online merchants to comply with such standards as message integrity (security and accuracy in transmission), privacy of customer data, and authentication of sender. Consumers must shop cautiously on the Internet.
Additional Resources
Listed below are web sites that provide additional information about shopping online.
www.ic3.gov
The FBI’s Internet Fraud Complaint Center
allows you to report suspected cases of Internet and e-commerce fraud.
www.safeshopping.org Online shopping tips provided by the American Bar Association.
www.bbb.org and www.bbbonline.org The Better Business Bureau certifies web merchants with a privacy seal of approval. You can research merchants through the BBB and also report e-commerce fraud problems at these sites.
www.bbb.org/alerts/cybershop.asp The Better Business Bureau’s holiday shopping tips.
www.ftc.gov/bcp/menu-internet.htm The Federal Trade Commission’s online shopping advice.
www.ftc.gov/bcp/conline/pubs/online/auctions.htm The Federal Trade Commission’s tips on Internet auctions.
www.fda.gov/oc/buyonline Created by the U.S. Food and Drug Administration to provide shopping tips for buying online prescriptions and over-the-counter drugs on the web.
Copyright April 2007, Identity Theft Resource Center®, all rights reserved.
Created by ITRC
This fact sheet should not be used in lieu of legal advice. Any requests to reproduce this material, other than by individual victims for their own use, should be directed to ITRC.