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Online shopping brings incredible convenience: You can make purchases from your phone or computer anytime, and your orders are delivered directly to your doorstep. But this convenience comes at a price: It potentially exposes you to fraud and identity theft.
Hackers are sometimes able to access private website data and obtain your credit card details and other personal information. Once they have your information, they may sell it or use it to make unauthorized purchases with your credit or debit card numbers, or worse, open up other financial accounts using your identity.
To protect your identity while shopping online, there are many steps you can take, from shopping on private Wi-Fi networks to using a credit card instead of debit.
How to Prevent Fraud When Shopping Online
While there's no way to guarantee that you won't become a victim of fraud or identity theft, there are many measures you can take to make it less likely. Next time you shop online, try these tips to help protect your identity and reduce the risks.
- Only shop on private internet networks. When you're browsing the internet on a public Wi-Fi network, you are more vulnerable to hacking. That's because public networks make it easier for hackers to intercept your data and nab your sensitive information. If you're going to enter your credit card information or other sensitive data on your phone or computer, do it at home on your own private network, or use a secure virtual private network (VPN) connection so others can't easily access your device. VPNs encrypt your data, meaning it can only be read at either end of the transmission and only with the right key.
- Check to see if the website is secure. Before you make a purchase online, check to see if the website's URL starts with "https" rather than "http." Https indicates the website has a secured connection, which means your connection to that website is much harder to hack. Some browsers will show a lock icon or say "secure" in the web address bar to indicate a secure website.
- Use your credit card. While you may prefer to make purchases with a debit card that's linked to your checking account, your credit card offers much more protection for online purchases. Most credit cards have a zero-liability policy that protects you from any responsibility for fraudulent purchases made with your account. Debit cards are not required to have as much protection, and they require you to report the fraud by a certain date (though some issuers may extend their protections). Plus, until it's resolved, the money is gone from your checking account. If you use a credit card, on the other hand, you don't lose money—you may just have less available credit until the issue is resolved.
- Utilize your card's security features. Some credit cards have special features that give you additional levels of protection when you shop online. For example, some issuers provide virtual card numbers, which gives you a temporary card number for a purchase so that businesses (and hackers) can't access and misuse your real credit card number. If your virtual card number is compromised you'll simple cancel it and alert your issuer, instead of having to swap out your payment details on every account. Plus, many credit cards also let you set up account alerts, which can inform you if purchases are made that seem suspicious or are above a certain amount.
What to Do if You Suspect Identity Fraud
If you think you might have been scammed while shopping online, there are a few steps you can take to help protect your identity and your finances:
1. Report the Identity Theft to the Federal Trade Commission
Once you input details about what happened, the FTC will provide you with a personal recovery plan. It will also give you an identity theft affidavit (which it calls a report) that you can use if you file a police report. You can also create an account with the FTC that will walk you through the recovery steps and give you access free resources, such as form letters.
2. File a Crime Report With Local Law Enforcement
If you're not sure whether your situation warrants it, the FTC can advise you. If you go forward with reporting the crime, know that the process varies from place to place, so check with your local law enforcement agency to find out if you can make the report online or if you have to do it in person.
3. Contact Your Card Issuer
The sooner you inform the card's issuer of the incident, the sooner they can cancel the compromised card or account. They will likely issue you a new card with different numbers. They will also do a fraud investigation and remove any fraudulent charges from your account. With credit cards, you have zero liability on unauthorized transactions. Debit cards have fewer protections, but you may still be able to get money back if certain criteria is met.
4. Contact one of the Credit Bureaus
Once you inform one bureau (Experian, TransUnion or Equifax), a fraud alert will be placed on your credit report and that bureau will inform the other two. This doesn't restrict new credit activity, but it encourages creditors to take extra steps to verify your information before approving a credit application. The alert lasts one year, but if you want an extended fraud alert for seven years, you'll have to contact each credit bureau individually and provide the FTC affidavit and police report.
5. Change Your Passwords
If you have an account on the website where you made your purchase that became compromised, immediately change your password there. You should also consider updating your password on the website for the financial institution that handles the card or account that was compromised. If you use the same password elsewhere, change it there too. This protects you in case the fraudsters obtained your login information.
6. Monitor Your Credit
After the incident, keep an eye on your credit reports to make sure no future unauthorized activity pops up. You may want to sign up for credit monitoring or identity theft monitoring, which can keep an eye out for you. Remember that it may take weeks or months for fraudulent activity to take place. If you see anything you think is a result of fraud, such as a new account you didn't open, you can dispute the error with the credit bureau.
7. Freeze Your Credit
As a preventive measure, you may also want to freeze your credit report with each of the credit bureaus. This prevents any new lines of credit from being opened in your name. If you need to apply for a new credit card or loan, or if an employer or landlord needs to run your credit, you have to contact the bureaus and lift the freeze.
Another option is to lock your credit report, which is easier to switch on and off than a freeze. If you're an Experian CreditWorks? Premium subscriber, you can easily lock your Experian credit file with the click of a button, which is another way to protect your identity.
Protect Yourself, Protect Your Credit
Whether you've been a victim of identity theft or are trying to protect your sensitive data, it's always smart to monitor your credit for unauthorized activity. There's a lot you can do to minimize your risk, including various types of credit and identity monitoring. Experian has an Identity Theft Monitoring program that's free for the first month and automatically monitors changes to your credit report, in addition to scanning the dark web for your information to ensure it hasn't been stolen.
Credit fraud and identity theft can be quite a hassle to clean up, so save yourself the trouble and do what you can to prevent it in the first place.