Although the numbers are increasing, consumers are still not using their credit cards on the Internet nearly as much as e-tailers (electronic retailers) would like. That's why many cyber-merchants continue to offer a toll-free order number so that shoppers have the choice of calling their order in. Cyber-shopping may be convenient -- and some people do all of their shopping online -- but credit-card fraud is always a threat, both on the Internet and out in the real world. Hackers have found ways to steal credit-card numbers from Web sites.
To illustrate the importance of tight security, a network TV reporter, tipped off about loose security on an Internet Web-hosting site, was able to gain access to about 1,500 customer records, which included everything from credit-card numbers and payment records to comments about particular customers.
These are the kinds of stories that deflate consumer confidence. Some e-tailers blame consumer reluctance on the inability in cyberspace to make the kind of personal contact that a shopper gets when he looks into the eyes of a store merchant. Experts say that this kind of comfort level will be boosted when online payment methods and security measures are standardized -- much as they are in the retail and mail-order industries.
While Internet companies have taken responsibility for security breaches and resulting losses to credit-card users, there remains the growing problem of people who use stolen credit cards to make purchases on the Internet. And while unfair or fraudulent practices by credit-card companies are not commonplace, they do happen. The good news is that consumers are protected by law -- in case of credit-card fraud online or off, you are only liable for a maximum of $50 of the amount stolen.
And fortunately, the Federal Trade Commission (FTC) and the media are watching closely. In 1994, the FTC ordered TransUnion credit-reporting bureau to stop selling "sensitive" consumer data -- data on 160 million Americans -- to junk-mail producers. The FTC charged that TransUnion violated the Fair Credit Reporting Act by selling consumer information to target marketers who lack any of the allowable purposes listed under the act. TransUnion denies that it sold information that could affect customers' appealed the FTC's ruling, but lost.
If the mailing-list issue bothers you -- and it bothers most of us -- pay attention when you're completing that credit-card application. Some application forms now provide a box that you can check to allow or disallow the selling of your information to mailing lists. You can also protect yourself by taking your name off the credit bureaus' mailing lists.
When you write to these companies, include your complete name, name variations and mailing address, Social Security number and signature and state clearly that you want your name removed from their mailing lists. You can write or call either of these major reporting bureaus and they will contact the other major bureaus with your request:
There are a lot of simple steps you can take to protect yourself and your credit card -- starting with making sure you sign it as soon as it arrives in the mail. The next page reviews some of these preventative measures.
- Experian Consumer Opt Out, 701 Experian Parkway, Allen, Texas, 75013; 1-800-353-0809
- Equifax Inc. Options, P.O. Box 740123, Atlanta, Georgia, 30374-0123; 1-800-556-4711