As the holiday season countdown begins and more consumers flock online to shop, fraudsters are also joining the digital fray to try and cash in on a variety of seasonal scams—typically, at your expense.
Online purchase scams are the riskiest type of consumer fraud, with more than 47,000 scams reported in 2017, according to the Better Business Bureau. That doesn’t mean you have to trade in the convenience of online shopping for brick-and-mortar crowds. Here’s how to practice safe online shopping tips so you can better protect yourself and your digital wallet this holiday season.
How I can buy something safely online
Consumers spent more than $517 billion online in 2018, a 15% increase over the previous year, according to an analysis by Internet Retailer. And with ecommerce growing annually—it accounted for 14% of retail sales in 2018—practicing safer online shopping habits should be standard practice if you plan on shopping from the comfort of home.
• Never use a debit card online
Not only do many credit cards offer price matching, extended warranties on purchases and other perks, but they also protect your bank account, said April Wright, a security researcher at ArchitectSecurity.org.
“If your credit card is stolen and you dispute the charges, you’re essentially fighting to not have to pay for something,” said Joseph Steinberg, a cybersecurity and emerging technologies adviser and the author of “Cybersecurity for Dummies.” “But if you used a debit card, the money is out of your account and you’ll have to fight to get it back.”
• Use a one-time credit card number or virtual card
An even better option is using a one-time-use credit card or virtual card if your bank or credit card issuer offers it. The charge is made against your actual credit card account, but the “virtual card” has a different number, CVV and expiration date. These are usually valid for a month and are often included free with some credit cards. Third-party services can also issue temporary cards. Some virtual cards allow you to set a maximum charge limit. If you buy something for $40.72, for example, you can set a limit for that same amount. If the card is compromised, a thief won’t be able to charge anything to the card. Some virtual cards can also be locked to a single merchant, so if you buy something at one store, a fraudulent charge can’t be made at another store.
These one-time card numbers can be especially beneficial for those online stores you’re not sure you can trust, said Steinberg. And if you do have your data breached while using one of these cards, it will be useless to a thief but helpful to the credit card issuer who can use it to easily track down a fraudulent charge.
• Only use established payment methods
When shopping online, it’s best to stick with known payment methods—such as Apple Pay, Google Pay, PayPal and Amazon Pay—that have a good reputation with online retailers. It’s also a good idea to set up two-factor authentication to verify your identity and prevent fraudulent purchases when using these payment methods.
“If you enter your card number on a form that goes directly to the merchant, they could be storing your credit card data (even though they are not supposed to) or processing it in an insecure way,” Wright said. “The Payment Card Industry (PCI) has standards and guidelines for processing credit cards, but smaller merchants may not be following them. Using one of these methods can help further protect yourself.”
• Be alert to phishing scams
Phishing attempts have grown 65% in the last year, and 1 in 25 branded emails is a phishing scam.
The best defense is to be alert and read everything in the email. If you get an email from a site you use or recognize, do not click on any links, Wright said. Instead, open a new browser window and type in the web address of the site yourself. The few extra seconds it takes to open a new window could help you avoid becoming a victim of identity theft and fraud.
Also pay close attention to the web address. Check to make sure it’s one you recognize and isn’t misspelled. Another line of defense: using an email lookup tool to try and figure out if the email came from a legitimate source.
“Be extremely suspicious—email is one of the most insecure ways we communicate today, and it has almost no security,” said Wright. “Anyone can send you an email and make it look like it’s coming from someone else.”
• Monitor your sensitive accounts
Don’t wait to review your bank statements at the end of every month. Instead, set up online or email alerts so you’re notified if someone makes an unusually large purchase before they max out your credit limit.
• Don’t use public computers or Wi-Fi networks while shopping
Do your online shopping where your connection is usually more secure, such as in your home or workplace. The worst place to do your holiday shopping? A coffee shop with free Wi-Fi, said Steinberg. Not only do you not want to have your credit card number out in plain sight, but there are security risks involved when you’re entering this information via public Wi-Fi networks in businesses and airports.
As an added security measure, make sure you also have antivirus and security software on any device you’re using for online shopping, including mobile devices. Be sure to also avoid shopping online using a shared public computer, such as in a library or hotel business center.
• Avoid sharing certain personal details online
There are obvious personal details you’ll need to share when shopping online, such as your credit card number and your address for the delivery. But if a merchant ever asks for your Social Security number, that should be a red flag.
Also avoid reusing the same passwords and secret questions across multiple sites. You can keep track of multiple passwords by storing them on a password manager tool. You should also skip using security questions, such as the make of your first car, your birthday or your maiden name, that can be easily discovered online through your social media accounts.
• Be wary of unbelievable deals
See an unusually low price for a premium product? If you’ve never heard of the e-commerce site, it doesn’t necessarily mean it’s a case of fraud, but you’ll certainly want to research the merchant’s reputation and business rating.
If something seems off, it probably is. For example, if you see someone selling a $2,000 bracelet for $500, there’s likely a catch, said Steinberg. If you’re buying an extremely expensive item, avoid buying it online if it’s not from a reputable company. Do your due diligence and apply the same judgment you would use while shopping offline: If you wouldn’t buy a Rolex watch from someone on the street, perhaps you shouldn’t trust an online merchant you’re unsure about.
“Understanding the dangers and being vigilant about your personal information is key to protecting yourself,” Wright said. “Credit cards can be reissued [and] charges can be refunded, but much of your personal data cannot be changed.” It’s up to you to protect your identity.