The Internet is one of the world’s greatest success stories. By delivering cheap, rapid information to people all over the world, connecting people across vast distances, and streamlining the purchasing process, it has become a powerful and useful tool. Now, instead of braving traffic and searching for a parking space at the mall, you simply can log onto the World Wide Web, find an online vendor, and order what you need — all without setting foot outside your home.

But it’s not all good news. Like most technological wonders, buying online has a downside—“cybercrime.” This point recently was driven home when America Online (AOL) software engineer Jason Smathers abused his employee access to steal personal data for 92 million AOL subscribers. Smathers sold the list to a Las Vegas scam artist who used it to send unsolicited spam e-mail. The scary part—the list included customer screen names, zip codes, and credit card types. AOL contends that neither passwords nor credit card numbers were compromised, but that’s scant comfort to those who thought their information was secure.

With hackers in the news nearly every day, it’s no wonder many would rather stick to traditional brick-and-mortar stores than buy online. Though electronic commerce is more convenient than trekking to a local store, it does carry an element of risk. Fortunately, there are numerous ways to
reduce your chances of becoming a victim of cybercrime.

Stick with who you know

Most large retailers maintain online stores and have a vested interest in maintaining their reputations. Although lesser-known electronic retailers (e-tailers) might have lower prices, it’s also true that anyone can set up an Internet storefront. If you’re not sure about the credibility of a certain vendor, ask for a paper catalog for more information. And while you’re on the Web site, check out the company’s policy on returns and exchanges before you buy. Also make sure the vendor has a phone number, an e-mail address, and an actual physical address listed on its site in case you need to talk to the company. It’s also not a bad idea to first check the phone number to make sure it works.

Paper trail

Print out invoices, bills of sale, and any other information provided by the seller after a purchase and store it in a safe place. Hard drives don’t last forever, so having a paper trail can be crucial. Goods bought online are covered by the Federal Trade Commission’s Mail and Telephone Order Merchandise Rule, which requires companies to deliver your merchandise within 30 days unless clearly stated otherwise.

If a firm is unable to comply with this rule, it must refund your money promptly or get an extension from you.

Secure browsing

Internet Explorer (IE) has become the most widely used Web browser in the world not because of its superiority, but because it comes bundled with Microsoft Windows. Microsoft has practically ceased updating IE as it struggles to bring its next operating system to market, and IE is now a generation behind browsers such as Netscape, Mozilla’s Firefox, and Opera. IE has become notorious for its abundance of security holes, which have been exploited by online criminals. The Department of Homeland Security recently advised avoiding IE because using a lesser-known browser is safer. If a particular site won’t work with any other browser, you might want to use IE for that site and a different browser for other sites. It’s important to install all “patches” if you continue using IE.

Most Web browsers include security solutions such as Secure Sockets Layer (SSL) or Secure Electronic Transaction (SET), which encrypts (scrambles) your data before sending it to an online store. That’s necessary because without encryption, a sophisticated criminal could intercept your credit card information or other data on its way to the e-tailer. The current versions of Netscape, Firefox, and IE display a closed padlock at the bottom of the screen when your data is scrambled. Also, instead of beginning with the usual “http://...” a secure site’s address will have the prefix “https://...” The “s” means you’re on a secure site.

Password pointers

Do not use your pet’s name, your mother’s maiden name, or anything else a hacker might easily guess as your password. Combinations of letters and numbers work best and are the most difficult to crack. Don’t use the same password for every site you visit—all it takes is one breach, and a hacker would have access to information on all the sites you’ve purchased from.

Charge it

Anything bought with your credit card automatically is covered by the Federal Fair Credit Billing Act, which requires vendors to correct billing mistakes immediately and allows you to withhold payment on defective goods while a dispute is investigated. If your card is stolen and misused, you’re responsible for only the first $50 in charges, but many retailers waive that fee.

Caveat emptor

The Better Business Bureau (BBB) maintains a site called BBBOnline where you can check on a vendor before buying. The bureau rewards trustworthy businesses with a seal of approval that identifies reliable e-tailers. The bureau presents the Reliability Seal to Web vendors who abide by their code of business practices, which you can review on its Web site (www.bbbonline.com). Its Privacy Seal is awarded to sites that take aggressive measures to protect their customers’ personal data, and its Kid’s Privacy Seal identifies sites that comply with the BBB’s child protection guidelines.

Pay by phone

If you’re especially leery of paying on the Web, many online companies allow you to fill out an order form online and then give your card number to a customer representative by telephone. If you order this way, make sure to write down the phone number you called, whom you spoke with, and the date and time of your call.

Despite the inherent risks of buying online, it’s becoming more popular every day according to the American Customer Satisfaction Index. This annual survey, conducted by the University of Michigan Business School and the American Society for Quality, among others, reveals that e-tailers scored a whopping 84 percent approval rating in 2003, as opposed to the national average of 75 percent for other types of retailers. The report mentions companies such as eBay and Amazon.com as having some of the highest customer satisfaction ratings.

Taking a few precautions can make buying online just as safe as face-to-face purchasing. In fact, at times it might be even safer. Brick-and-mortar stores are by no means free from credit card abuse. The bottom line: Keep an eye on your monthly credit reports, regardless of whether you buy online, and keep records of your purchases. Then, the only thing you’ll have to worry about is how to pay for them.