Online shopping is ever more common, easy and convenient. But watch out — there's still a risk you'll be scammed, whether you're a buyer or seller.
See also: A fraud alert or a credit freeze?
Last year, nondelivery of payment or merchandise was the top complaint to the FBI's Internet Crime Complaint Center, accounting for nearly 14 percent of more than 25,000 reports logged each month. Fraud at online auction websites made up another 6 percent of all complaints.
Receiving counterfeit or shoddy merchandise is another big problem. This may happen because you unknowingly ordered from a "cyber-squatting" site, a copycat online store that fools you into thinking you're visiting the real home of a famous retailer.
At times just looking for things to buy online, without actually buying anything, can be hazardous.
Last holiday season, cyber crooks managed to victimize people who merely typed in the names of products on search engines. The crooks' pages came up in the search results. The shoppers clicked on those links — and unknowingly infected their computers with malware, software that steals personal information or sends spam.
These practices are all outright crimes. But there are legal tricks that reputable merchants are known to play in cyberspace, and you want to guard against them, too. Online retailers are more likely than their bricks-and-mortar counterparts to have "gotchas" such as outrageous shipping costs, no-return policies or "restocking fees" of 20 percent if they do allow returns.
Consumer Reports finds that "virtually every [online] retail site we checked doesn't offer the basic 'implied' warranty consumers usually get when they walk into a store." This warranty ensures that merchandise performs as commonly expected and will last a reasonable amount of time.
And while most online shopping cons affect buyers, sellers on Craigslist and other sites continue to fall for the "overpayment scam." In that one, you receive a fake payment check that's for more than the agreed amount for what you're selling. You're asked to wire back the difference. You oblige and only find out many days later that the check was counterfeit. Any money you've sent is gone forever.
I could go on — there are other techniques. But with some simple precautions, you can give yourself a safer online buying and selling experience.
1. Pay with a credit card. A credit card provides more protection than a debit card should a purchase prove fraudulent or shoddy — you can stop payment. PayPal, which acts as intermediary between you and the seller, is another good option for frequent online shoppers. Paying with a debit card potentially gives cyber crooks access to your entire bank account — you're providing an account number, which in the wrong hands could be used to make instant withdrawals over and above what you authorized.
And never, never wire money. It's scammers' preferred way of pocketing your money.
2. Read the fine print. Even when you're dealing with reputable retailers, check the privacy policies of their websites so you can stay away from any that sell your personal data to third parties. Also read — before redeeming — the terms of any online coupons or offers. That "$10 off your next purchase" coupon might involve an automatic sign-up with a retailer's or partner's program, resulting in monthly charges for an unwanted service.
3. Use a dedicated email address for shopping. Buying something online may result in the merchant flooding your email box with come-ons to buy more. To avoid this at your primary email address, get an account from free mail services such as Gmail, Yahoo or Hotmail to use just for online shopping.
4. Keep your info private. Never provide personal information, including credit card numbers, on a page with an address that doesn't begin with "https" (the "s" is for "secure"). Also, make sure there's a tiny closed padlock in the address bar or on the lower right corner of the window. Type nothing personal into pop-ups. Hackers can create pop-ups that appear on legitimate shopping websites but are unrelated to them.
5. Know which emails to ignore. Never respond to emails that ask you to confirm recent transactions or try to steer you off-site (such as away from eBay after your bid does not win). Legitimate shopping sites will send an order confirmation, usually with instructions on how to track the delivery of your purchase, but they will not ask for confirmation. Messages seeking it are really after your personal info.
6. Type website addresses yourself. Don't rely on links in emails and advertisements promising to take you to a retailer's website; they could be cover to download a virus to your computer. When searching for items by keyword, carefully review the spelling and punctuation of website names listed on results pages. Scammers can easily set up a phony site that's just a letter or two different from the one you want.
7. Wait for the check to clear. When selling online with payment by check, don't ship the merchandise until your bank reports that "funds have been collected" from the buyer's check. This can take a week or longer. Although your account may show an immediate credit after you deposit the check, what's really happening is that the bank is fronting you the money pending clearance of the check. You will be liable for all money drawn from the deposit should the check prove bogus.
Sid Kirchheimer is the author of Scam-Proof Your Life, published by AARP Books/Sterling.