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Identity Theft Risk Factors: Making Credit Card Purchases Online

The online shopping marketplace has grown rapidly during the past few years. Internet market researcher, eMarketer, predicts that more than 200 million individuals will make purchases on the Web by 2015, compared with 2009’s total of 163 million. (Source: http://www.internetretailer.com/trends/consumers/)

With so many people buying goods and services online, the Web has become a feeding ground for fraud and other types of criminal activity that could hurt your credit reports and scores. Some individuals may think that because they are purchasing items within the confines of their home that their financial information is somehow more secure; this is not necessarily true.

Below are facts that may enable you to shop safer on the Internet.

Myth No. 1: Shoppers’ information is kept private and secured with every Web retailer.

Fact: Most online businesses take many precautions to safeguard their customers’ information because they know a single breach of trust may encourage you to shop with another merchant. However, even the largest online companies, with strong fraud protection services may suffer a breach, resulting in the exposure of your financial information.

For this reason, experts advise consumers to use different user log-ins and passwords for each retailer they shop with online. If you fail to take this precaution, you may see a number of your accounts become vulnerable to identity theft — even if a single merchant’s database is hacked.

Some retailers may also share your information with third parties, either for marketing purposes or to conduct background checks, identity verification or other data requests. Be sure to read each website’s terms and conditions before submitting your data to ensure your private details are not shared with other sources.

Myth No. 2: All credit cards offer the same type of fraud protection.

Fact: Consumers who want additional safeguards while shopping online may be able to obtain a variety of features from their credit card companies.

For example, Visa and MasterCard each offer services that prompt online shoppers to enter an extra password when use their credit card to make a purchase online; without the correct code, the transaction doesn’t go through.

Other companies provide their customers with a temporary credit card number for making purchases on the Web. By taking this approach, consumers may avoid putting their actual credit card details into a merchant’s system, which may reduce the likelihood of their accounts becoming compromised.

Before entering credit card information for an online purchase, check your Web browser for a lock icon that can help you determine the security level of the page.

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