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With just a
click of the mouse, shoppers can buy nearly any product online - from
groceries to cars, from insurance policies to home loans. The world of
electronic commerce, also known as e-commerce, enables consumers to shop
at thousands of online stores and pay for their purchases without leaving
the comfort of home. 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.
This guide
offers advice on how to make your online shopping experiences enjoyable
and safe.
1. Shop at
Secure Web Sites
How can you
tell if a web site is secure? It uses encryption technology to transfer
information from your computer to the online merchant's computer.
Encryption 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.
You can tell
when you are dealing with a secure web site in several ways.
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.
Of course,
transmitting your data over secure channels is of little value to you if
the merchant stores the data unscrambled. You should try to find out if
the merchant stores the data in encrypted form. If a hacker is able to
intrude, it cannot obtain your credit data and other personal information.
Be sure to read the merchant's privacy and security policies to learn how
it safeguards your personal data on its computers. (See tip 3 below.)
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. If you decide to buy something from
an unknown company, start out with an inexpensive order to learn if the
company is trustworthy.
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
like the district attorney's office or the 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.
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.
You can also
learn what type of information is gathered by the web site, and how it is,
or is not, shared with others. The online merchant's data security
practices are also often explained in the Privacy Policy, or perhaps a
separate Security Policy.
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 of time.
Policies can change. The company can file for bankruptcy and sell its
customer data base. The web merchant might be purchased by another company
with a weaker privacy policy. And the company's data can be subpoenaed for
law enforcement investigations or civil cases. You have little control
over the use of your customer data in such matters.
Given all of
these uncertainties, you will want to think about the sensitivity of the
data that is being compiled about you when you shop online. We cannot
prescribe the best approach to take. Each consumer has a different
interpretation of what is considered "sensitive."
4. What's
Safest: 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. You are rarely asked to pay this
charge. We recommend that you obtain one credit card that you use only for
online payments to make it easier to detect wrongful credit charges.
E-commerce
shopping by check leaves you vulnerable to bank fraud. And 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 true credit card 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. Never
Give Out Your Social Security Number
Providing
your Social Security number is not a requirement for placing an order at
an e-commerce web site. There is no need for the merchant to ask for it.
Giving out your Social Security number could lead to having your identity
stolen. (See PRC Fact Sheet 17, "Coping with Identity Theft,"
www.privacyrights.org/fs/fs17-it.htm.)
6. Disclose
Only the Bare Facts When You Order
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. They may ask questions about your
leisure lifestyle or annual income. 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.
7. Keep Your
Password Private
Most reputable
e-commerce web sites require the shopper to log-in before placing or
viewing an order. The shopper is usually required to provide a username
and a password. Never reveal your password to anyone. When selecting a
password, do not use commonly known information, such as your birthdate,
mother's maiden name, or numbers from your driver's license or Social
Security number. Do not reuse the same password for other sites. The best
password has at least eight characters and includes numbers and letters.
8. 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, you can make sure that 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 would have noticed that it
was not the same address as the real company.
9. Always
Print Copies of Your Orders
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.
We recommend
you 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.
10. Shop
with Companies Located in the Unites States
When you shop
within the U.S., you are protected by state and federal consumer laws. You
might not get the same protection if you place an order with a company
located in another country.
11. Pay
Attention to Shipping Facts
Under the law,
a company must ship your order within the time stated in its ad. If no
time frame is stated, the merchant must ship the product in 30 days or
give you an "Option Notice." This gives you an opportunity to cancel the
order and receive a prompt refund, or agree to the delay.
Here are key
shipping questions to ask:
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?
12. Learn
the Merchant's Cancellation, Return and Complaint-Handling Policies
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?
13. Use Shopper's Intuition
Look at the
site with a critical eye. And 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 merchant is an amateur?
Are
there a lot of spelling or grammar errors?
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 bell in your head, you will be wise to find
another online merchant.
14. Be Wary
of Identity Theft
As e-commerce
becomes more common, there will be more cases of identity theft committed
over the Internet. Imposters are likely to obtain their victims'
identifying information using low-tech means like dumpster diving, mail
theft, or workplace access to SSNs. But they are increasingly using the
web to apply for new credit cards and to purchase goods and services in
their victims' names.
The same advice
for avoiding low-tech identity theft applies to shopping on the Internet.
Many are mentioned in the above tips. Most important: Be aware of who you
are buying from. And use true credit cards for purchases, not debit
cards.
We recommend
that you 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. (See PRC Fact Sheet 17a , "Identity
Theft: What to Do if It Happens to You,"
www.privacyrights.org/fs/fs17a.htm.)
15. 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.
The faults of
the E-Sign Act require you the customer to shop cautiously on the
Internet. The tips offered in this guide will help you make sure the
online companies you choose are secure and honest.
Additional
Resources
Listed below
are web sites that provide additional information about shopping online.
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www.ifccfbi.gov
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The FBI's
Internet Fraud Complaint Center allows you to report suspected cases
of Internet and e-commerce fraud. |
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www.safeshopping.org
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Online
shopping tips provided by the American Bar Association.
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www.bbb.org and
www.bbbonline.org
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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. |
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www.bbb.org/
alerts/cybershop.asp
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The
Better Business Bureau's holiday shopping tips. |
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www.ftc.gov/bcp/menu-internet.htm
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The
Federal Trade Commission's online shopping advice.
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www.ftc.gov/bcp/menu-internet.htm
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The
Federal Trade Commission's tips on Internet auctions. |
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www.fda.gov/oc/buyonline
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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. |
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www.fraud.org |
The
National Fraud Information Center, a program of the National
Consumers League. Maintains information about online scams and lets
you file complaints online. |
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www.shopthenet.org
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The
Direct Marketing Association's site of member merchants who comply
with the federal "Mail or Telephone Order Merchandise Rule" that
requires, for example, deliveries in 30 days. |
The Privacy Rights Clearinghouse and
the Identity Theft Resource Center acknowledge the assistance of intern
Glenn Rivera in researching this fact sheet.
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