How Online Shoppers can Reduce Online Fraud Risks

Online shopping has become the norm in the UK and in many other countries throughout the world, as the convenience of shopping from the comfort of the sofa really is unrivaled. However, with online shopping becoming commonplace, it’s also being trivialized, and many do not realize that there is a real risk of online fraud. Despite many new technologies for reducing online fraud, the government reported nearly 5,000 more cases in 2012 than in 2011. As a result it’s important to understand how to protect against online attacks and hacks to ensure a successful and safe transaction.

Buy from Secure Websites

One of the best ways to protect against online fraud when buying over the internet is to limit purchases to secure websites only. Secure websites have a twofold approach to reducing associated risks: firstly they ensure that the buyer’s computer directly links to the retailer’s server, making it more challenging for hackers to intercept the data transfer, and secondly they encode the payment information, such as credit card number, security code and expiry date, so that if the data is intercepted, it’s practically useless to fraudsters.

It’s easy to find out if a website is secure or not, even complete computer novices can do it. In the web browser’s address bar, secure websites begin with ‘https’ rather than the standard ‘http’. This is HTTP with the added security of either SSL or TLS. Another way to be sure a website is secure is by checking for a padlock symbol in the web browser. This symbol confirms that the computer is connected to a legitimate website rather than a fraudulent copy.

Make Use of additional verification tools

3-D Secure Technology and Verified by Visa are relative newcomers to the world of online fraud prevention within payment processing but can be very beneficial for customers. These technologies are often run by major credit card companies and banks or other financial service providers who act as a middle man for web-based transactions. This means that when personal credit card information is submitted, that data does not go directly to the retailer. Instead, the data goes to the financial corporation who approve the payment on behalf of the retailer.

For customers, this is much less risky because it means personal information cannot be stored by the retailer, reducing the chance of information being stolen from a retailer’s database, which unfortunately has been known to happen. It’s easy to sign up to these services, and buyers will often be prompted to register during an online transaction. In most circumstances, it will simply be a case of typing in a password during the buying process that will connect the computer directly to the bank.Other new methods are also being introduced, such as asking customers questions relating to previous home addresses.

Keep Passwords Safe

Worryingly, many web users opt for either simple sequences such as ‘abc123’ or ‘qwerty’, their own name or variations for their passwords. It’s perhaps even more concerning that many users have just a single password for all online accounts, giving the same level of security to a social networking account as an online bank account. With fewer security measures protecting less sensitive accounts, it’s becoming easier for fraudsters to hack low key accounts for access to high value websites.

Choose a password that is difficult for others to guess, so avoid birthdays, anniversaries, or pets’ names. It’s always best to choose a longer password with a combination of letters and numbers as well as upper and lower cases. Research has also demonstrated it can be beneficial to intentionally use bad spelling and grammar. Use imagination and initiative, and remember never to share passwords, always keep them private.

Don’t Use Shared Computers

If a home PC isn’t available, some shoppers have no choice but to use a shared computer in a college or library, for example, but special care must be taken if using a public computer for online shopping. Not only is there an increased risk of strangers seeing the information that is being entered, there is also a risk of the browser’s form-saving option maintaining the information that is entered. It’s also difficult to know exactly what software has been installed onto the computer, with viruses a possibility.

It’s always safer not to use a public or shared computer, but if it’s absolutely necessary, follow these rules:

  • Sit away from others if possible to reduce the risk of over-the-shoulder glances
  • Turn off form saving in the browser’s options
  • Make sure the website is secure
  • Be sure to logout of the website after making the purchase
  • It’s also beneficial to delete all cookies and history from the browser before vacating the desk

Use a Credit Card

Unfortunately fraud does happen, and sometimes it’s completely out of our hands. Despite all the advancements intechnology, things can and do go wrong so it’s important to have a backup plan. When making purchases online, it’s always better to use a credit card rather than a debit card. Credit cards usually have much better buyer protection meaning that, if information is stolen, any illegitimate purchases will be covered and reimbursed by the credit card company. However, buyer protection is rendered void if fraud can be directly attributed to the negligence of the buyer, so it’s vital to use common sense and initiative when making online purchases.

References:
http://www.computerweekly.com/news/2240147568/Millions-of-internet-users-trust-weak-passwords-research-reveals
http://www.newscientist.com/blogs/onepercent/2013/01/bad-grammar-make-good-password.html
https://www.gov.uk/government/publications/fraud-reports-relating-to-online-shopping-and-auctions

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This article was written by a finance blogger from London.

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