Paying Online – Pros and Cons

Paying Online – Pros and Cons

I’ve been seduced by the convenience of online shopping! I’ve bought movies, clothes, stamps, groceries, prescriptions, books and jewelry online. During the Christmas Holidays, I wait with peppermint breath for Saint UPS Driver Guy and his bag of goodies. While others fight mobs of angry shoppers, I browse through product descriptions at my leisure. I feel relatively safe providing my credit card information despite the horror stories of fraud and theft. I only buy from reputable merchants, those that are well known and publicized. That’s not to say I couldn’t be fooled. It’s nearly impossible to tell whose who on the Internet. Sure, a professional site may be one indicator, but anyone can hire a web designer. Recent research estimates that the number of households shopping online grew to over 18 million in 2001. Here are some tips to help you decide if you’re dealing with a trustworthy merchant:

Use a secure browser - software that encrypts or scrambles the purchase information you send over the Internet - to help guard the security of your information as it is transmitted to a website. Secure websites will have URL address HTTPS (Hyper Text Transfer Protocol Secure) rather than HTTP.

Check the site's privacy policy, before you provide any personal financial information to a website. While these statements contain lots of small print, it’s important you understand if and when your information will be used or shared with others. Also check the site's statements about their security policies.

There are several payment options available, however, the Fair Credit Billing Act (FCBA) limits your liability if your credit card is used. According to the Federal Trade Commission (FTC) ”…your liability for lost or stolen credit cards is limited to $50. If the loss involves only your credit card number (not the card itself), you have no liability for unauthorized use.” (FTC, 2004)

Keep records of your online transactions and review for monthly credit card and bank statements. Verify that the charges made were accurate and report errors immediately. “The FCBA's settlement procedures apply to disputes about "billing errors" for open-end accounts, including unauthorized charges (you cannot be liable for more than $50 for unauthorized credit charges); charges for goods or services you didn't accept or weren't delivered as agreed; charges that are incorrectly identified or show the wrong amount or date; math errors; a failure to properly reflect payments or credits; not mailing or delivering credit billing statements to your current address, if the address was received by the creditor in writing at least 20 days before the billing period ended; and charges for which you request an explanation or documentation, because of a possible error. ” (FTC, 2004)

Resources
Author Unknown. (2004). A Consumer's Guide to E-Payments. Retrieved March 12, 2004 from www.FTC.gov