Practice Safe Internet Shopping

Ahh, Internet shopping. No lines, no crowded parking lot…you don’t even have to put on a shirt. And neither does an identity thief before he hacks into a web merchant’s database and steals your credit card number.

Online shopping isn’t quite so convenient if it results in identity theft, so before you and your credit card get too cozy over there, check out these rules for shopping smart.

• Shop from secure sites, which will encrypt your order info—including your credit card number—before sending it to a merchant. To make sure your connection is secure, look for “https://” at the beginning of the URL in the address bar (it’s the “s” that’s important). Also check for a little picture of a padlock or an unbroken key in the bottom right hand corner of your browser.
• Read privacy policies. Secure ordering only protects your information en route. A privacy policy should tell you if the company is going to store and use your information safely once it arrives.
• Shop at sites you know. If you aren’t sure about a site, do a little research before you divulge your digits.
• Look for privacy seals—like BBBOnline, TRUSTe, or VeriSign—on the sites where you shop. These colorful little logos, usually located at the bottom of a homepage, certify that the company adheres to certain privacy and security guidelines. Click on the seal to make sure it’s genuine, and to find out exactly what its placement on the site means.
• Shop with a credit card—not a debit card. If a thief intercepts your credit card number and runs up charges, federal law limits your liability to $50 per card. If the same thing happens with your debit card, you can lose $500 or more.
• Keep detailed records of your online purchases in case anything goes wrong.
• Log off after using public Internet terminals, and, if possible, save your shopping for your home computer.
• Use special software to wipe your hard drive clean before chucking your old computer.

Are Debit Cards Safe?

Answer: The Jury Is Still Out.

The problem is that although your credit card number and your debit card number are both pretty easy to steal, the results can be quite different. With credit card fraud, the thief steals the bank’s money, and your job is to prove you don’t really owe it.

With debit card fraud, the thief steals your money, and you have to convince the bank to put it back into your account. Guess which one’s easier? When a thief steals your credit card you’ll never pay more than $50 in fraudulent charges. But when it’s your debit card, it’s possible to lose all the money in your bank account.

What Identity Thieves Do With Your Information

Once they’ve got your data, thieves can use it in a lot of different ways. The most common kind of fraud occurs when crooks go on a spending spree to rack up charges on your existing credit card account—but the fun doesn’t stop there!

• They use your credit card or credit card number to charge purchases to your accounts, often changing the address your bills are sent to so you won’t notice right away.
• Using your name, date of birth, and Social Security number, a thief can open a new credit card account in your name.
• With the same info, crooks can apply for phone or wireless service.
• Some thieves use your name to open a bank account and write bad checks. Others counterfeit your checks or steal your debit card number to drain your existing bank account.
• Your identity can be quite handy when a thief wants to take out car loans or mortgages.
• Crooks can use your name when filing for bankruptcy, or co-opt your entire identity to hide a bad credit history or a criminal record and start a “new life.”
• In rare cases, a thief might give your name to police when arrested. When he’s a no-show at his hearing, guess who the cops are coming after with a warrant?

Believe it or not, if your identity is stolen, the chances are about 50/50 that you’ll never find out exactly how it happened. Some kinds of theft—when a crook steals data from company files, for instance—are very hard for victims to trace.