6 tips for shopping safely online

When sharing is a bad thing. Shared computers, such as the ones available to multiple strangers at computer centers, are a big no-no, says Branigan.

The danger is that hackers can insert a keylogger into the back of the keyboard, a device that looks like a harmless adapter. This monitoring device captures everything you type before it's encrypted. Sometimes installed as software, the device can be hard to detect. The best thing to do is avoid shared computers when typing in sensitive information.

Pay with a credit card. You've found a trustworthy site with a secure checkout page. Now you're ready to pay -- with what? Check, money order, debit card, credit card, cash or Monopoly money?

Plastic is safest

We got a resounding answer from the experts: Credit cards are the safest method for online purchases.

"The last thing you want to use is a debit card," Stickley says. "Most credit cards have protection on them -- if someone rips you off, you can dispute the charge. Debit cards pull money right from your bank account. It can take months to get your money back, if you ever see it again."

The beauty of using a credit card is that it's not just your money on the line -- it's the creditor's money, too. "If you have a problem with your transaction, the credit card company will go to bat for you to resolve it," says Ingram.

According to the Federal Trade Commission, federal law limits your liability to $50 in charges, should someone use your credit card fraudulently

Another option is making purchases through a third-party escrow service such as PayPal. Paypal Buyer Protection covers qualifying eBay purchases for up to $1000 at no additional cost, helping to guarantee your purchase.

After any sale, print and save all of your receipts and e-mail confirmations in case of a dispute.

If you are reluctant to give out your credit card number over the Internet, you have alternatives. Some credit card companies such as Discover Card, Citi and MBNA offer a secure online account number service -- a virtual credit card or virtual account number.

In the five years since Discover has offered virtual credit cards, they've had no incidences of credit card fraud or identity theft in situations where hacking has occurred, says Steve Furman, marketing director of e-commerce at Discover Financial Services.

There are alternatives

By providing merchants with a special credit card number instead of your real account number, your actual Discover account number is never exposed to scammers. Check with your credit card company to see if they offer this type of security feature.

Another security feature on the horizon is a one-time-use password token. The technology has been developed, but it's not in widespread use yet. To protect yourself, be wise in your choice of passwords. Use a combination of letters and numbers difficult to guess, suggests Chris Young of RSA Security, a company that has developed password tokens. Don't use a word or number someone else could figure out, such as your dog's name or birthday. Change your password frequently.

Suspect the suspicious. If you're at the checkout page and the site asks for your date of birth and Social Security number, be very careful.

"This combination can give people enough information to start applying for new credit cards in your name," Branigan says. What's scarier is the ease with which driver licenses can be purchased overseas -- for as little as $100. If that scares you, remember a simple rule of thumb: If anything seems suspicious, call the company and ask questions.

Also be wary of sending out credit-card information via e-mail or instant messaging, says Branigan. Neither is encrypted. Copies can remain on your mail server as well as theirs. Since you can't control who's looking at your information, stick to the site's secure transaction page.

Moment of truth: Is online shopping safer than shopping offline? The experts offer a silver lining to the cautionary warnings against online identity theft and credit card fraud.

Shoppers should be aware that as long as they are dealing with reputable companies, online transactions are far more secure than the face-to-face transactions people perform every day, says Stickley. Online transactions eliminate the middle man, such as the waiter who processes your credit card payment, so there are fewer people to physically see your private information.

Consumers who research companies before making purchases, watch for warning signs of fraud, use credit cards for purchases and keep receipts should be relatively safe. "They can be absolutely as confident as physically shopping in a store," says Branigan.

Updated Dec. 3, 2007

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