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The Safest Way To Pay – The Paradox of Credit Cards and Credit Card Cyber Fraud
By Michelle L. Collie
Expiry Corporation Staff Writer
June 2002

How safe is it to give your credit card online? E-retailers and credit card companies argue that online credit-card transactions are as secure, if not more, than placing an order by phone, fax, letter or in person. The way a secure online transaction works - - no human ever sees the credit card numbers, in theory.

However, according to a Wall Street Journal article by Jeremy Wagstaff, Indonesia is a wake-up call to anyone who believes e-commerce is safe the way it stands right now. Indonesia is a base for an Internet fraud ring. The ring uses stolen credit card numbers (found online and offline) to bid on items at auction sites. They then re-list the items on their own websites or auctions, thus getting access to more credit card numbers. And so the circle goes. This helps explain why auction fraud accounts for the majority of online fraud today. In fact, there is even an elusive Indonesian online chat channel whereby fraudsters can trade and collect more numbers with other chatters.

83% of U.S. consumers who have never shopped online, site fear of credit card safety as their reason for never having done so, according to a Forrester’s Research report, and most of them have probably never even heard of the Indonesian Credit Card fraud rings.

According to a recent credit card fraud on the Internet statistics report from Jupiter Media Metrix, the attention focused on online security incidents has led consumers to believe that credit card cyber fraud is approximately 12 times more prevalent than non-Internet related credit card fraud. However, Jupiter's research found that in actuality online credit card fraud rates are about three or four times that of overall commerce fraud.

It’s scary giving your credit card out to anyone, anywhere, not just on the Internet. Credit Card fraud can happen anywhere. A thief can go through the trash to find discarded receipts, carbons etc.; a dishonest clerk can make more than one imprint of your card; a dishonest telemarketer can easily write your card down as you give it to him…the list goes on and on.

Does this mean we should stop using our credit cards altogether? Probably not, we just need to be aware of the dangers and follow simple rules to help guard against credit card fraud. What can you do?

• Sign your card as soon as it arrives
• Carry your cards separately from your wallet
• Keep a record of your account numbers, expiry dates and phone numbers of each company in a secure place
• Keep an eye on your card during each transaction and get it back as soon as they’re finished with it
• Void incorrect receipts
• Destroy carbons
• Save receipts to compare with your statements – and do this every month
• Never throw opened or unopened statements away without shredding them first
• Report any questionable charges in writing promptly
• Notify credit card companies well in advance of moving
• Only order online if the website is secure (a small gold lock at the bottom of your browser will appear)
• Don’t EVER email your credit card number to anyone (many people believe email is secure, but in actual fact - - it is not secure at all!)

Its not only up to the consumer to make sure their credit card numbers remain safe while conducting online and offline transactions. There are many things companies can do as well. In a recent survey by Forrester’s Research, consumers cited the following, as things that would make them feel more comfortable using their credit card to purchase things online:

• Secure Server Site – the credit card transaction is secure and encrypted – the “gold lock” at the bottom of the browser window lets users know when a site is secure

• Money-back guarantee – consumers feel more comfortable knowing that they will have the opportunity to get their money back should something go wrong with their purchase

• Brick and mortar presence – Consumers want to see the contact information displayed prominently on the website before they will order. A “real address” (not just a P.O. box) is a sign that the business is legitimate in the eyes of the shopper.

• Positive testimonials – Knowing that other customers have done business with the company and have had a positive impression, enough to write a testimonial or thank you note, satisfies consumers to put trust in that business.

• Follow Up - Follow up with customers a day or two after they order to thank them for their order. Disconnected phone numbers, wrong numbers, or someone who is unaware of the order/charge could signal fraud.

The consumer can do their part, the business can do their part - - and yet there is still a chance of credit card fraud regardless of whether you visit their bricks and mortar store or go online. So just what is the safest way to pay?

When it comes to dealing with online companies and you have a choice to fax in your order, telephone in your order, or do it over the website - - if the site is secure (gold lock at the bottom of the web browser on the page where the order form lies) you’re as safe as you’re going to get right now! Ordering online, on a secure and reputable site, is safer than faxing and phoning in your order because your credit card numbers are encrypted as soon as you order.

There is a new site online that prides itself on “detecting”, “tracking” and “apprehending” credit card thieves. Cardcops.com is an online service that allows consumers the ability to see if their card has been “stolen” and whether it is being exchanged within some of the credit card fraud rings that chat and share cards online. You have to enter in your credit card to see if it matches any numbers in the database (which means you could be exposing your card to further insecurities); however, cardcops.com sits on a secure server and do not require the cards expiry date (mandatory for actual transactions) to complete the search.

For those that are still scared to buy online, many sites will accept checks and money orders as well – however, buying with your credit card may still be the safest way to go. After all, most credit card issuers offer money-back guarantees, settling services, and insurance when transactions are wrongly placed on your card or are fraudulent. It’s hard to find that kind of guarantee with cash, money orders, or cashed checks.

Please Note – Expiry Corporation is very concerned with Credit Card Cyber Fraud and takes all measures possible to ensure secure transactions each and every time you order with us. We do advise our customers that the “safest” way to pay is still online or by telephone and we urge our customers to NEVER send their credit card to us by email or postal mail. Expiry Corp. does not retain any credit card information from our customers to ensure the safety and security of your important information.

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