By Dave Warner
Spending money online is like one of those old good news, bad news jokes – except it’s not funny.
On the up side, online retailing is open 24 hours a day, 7 days a week. Feel like shopping at 2 a.m.? Go for it. Feel like comparing prices without walking around the mall? That’s easy too.
The downside was articulated by no less that President Obama earlier this year when he unveiled what is now known as the National Strategy for Trusted Identities in Cyberspace. Obama said online transactions, from banking to buying, have caused new challenges.“Few have been as costly or nerve wracking for businesses and families as fraud and identity theft,” he wrote in an introduction to the new initiative. “These crimes cost companies and individuals billions of dollars each year; and they often leave in their wake a mess of ruined credit and damaged finances that can take years to repair.” The new federal initiative aims to prompt private businesses to design technologies that make all online use safer.
All of that is on a grand scale, but sometimes it’s the small issues that really get to consumers.
Take the case of a 52-year-old New England business executive, who doesn’t want her name to be made public. The mother of two is online a lot, buying cosmetics, party supplies, books and more, and her husband buys music and auto parts.
“I don’t have the time to get to the mall,” she says. So online it is, and almost always the outcome is a good one.
Except once. And she hasn’t forgotten it. The federal government might be worried about billions – she’s annoyed by a $2 purchase that never showed up. It was one of several items she ordered from the same company that day.
She called, she wrote emails, she called again. But no luck.
“At this point, it was just the principle,” she said. She never got what she wanted from the business, and has never shopped there again. She did, however, instruct her credit card company to decline the payment, which it did.
“The lesson for the vendor is…the customer experience,” she said. And for her, the $2 charge for nothing added up to no more business.
Her experience echoes advice from many experts – know who you’re dealing with.
The Federal Trade Commission, in fact, lists that as the first rule of on-line shopping – making sure you have a snail mail address and a telephone number in case issues arise later.
- Read the product description, and find out if you can return it if you want to.
- Don’t email your credit card number or your Social Security number. And don’t click on a link in an email to shop.
- See who has the best prices for whatever it is you’re buying.
- Public WiFi? Be careful, they may or may not be secure.
- Pay with a credit card.
- Don’t wire money to a merchant. There’s no recourse after that.
The reason experts suggest paying with a credit card instead of a debit card is that your liability on a credit card is generally limited to $50. If you use a debit card and somebody steals the number, then things could get messy. Your debit card is of course a gateway to your bank account, and you don’t want to give a thief that kind of easy access.
Some people also like to buy prescription drugs online. It’s a great way to find the best prices.
Just make sure you’re dealing with licensed American pharmacies, and stay away from any site that does not require a prescription, or doesn’t have a pharmacist available to answer your questions.
The danger otherwise is that you could get prescriptions that are fake or that actually will harm you, not help you.
Otherwise? The site could sell your personal information, like what sites you visit, what kinds of items you buy and where you ship them, to other companies. In that case, can you spell Spam? Yep, you may get more of it than you wanted from those very same companies.
John Breyault, vice president of public policy, telecommunications and fraud for the National Consumers League hears about all kinds of online scams. He cites a few: the online charity scam, where a site seems to be from a well-known organization, especially around the holidays, but isn’t; the major natural disaster scam, raising money for victims, but the money is really going into someone’s pocket; money raised for charity, but the fund raiser gets most of it, and the charity gets but 20 cents on the dollar.
So be careful – call the number of the real charity and see if the site really belongs to them, talk to your Better Business Bureau, don’t shop at a site that is unfamiliar to you, and the first time you use a site, spend only as much as you can afford to lose.
And be wary, Breyault says, of sites that press you to spend right now, that there is an urgency to getting money to a charity.
The Consumers League warns too of another scam – sites set up to look and feel like the legitimate PayPal system for paying for online purchases at online auctions. The league cites a case where a woman was asked to ship an expensive watch before she received the payment, and lost some $4,000 in the process.
“Scammers have become extremely sophisticated with the tools they use to trick consumers into opening their wallets,” the league says.
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