According to the National Retail Federation's (NRF) 2008 Holiday Consumer Intentions and Actions Survey, this year consumers are expected to spend an average of $832.36 on holiday-related shopping, totaling $470.4 billion in the United States. The NRF survey also says that 44 percent of holiday shoppers will be buying gifts online this year. Online shopping is a great way to shop from the comfort of your own home and avoid busy malls and packed parking lots. Or you may choose to buy gifts online to save money or because the types of items you are looking for simply are not sold in your own local retail stores. Another benefit is that Internet stores never close and you can shop at your leisure without being confined to retail store hours. Online shopping has its benefits, but just like the real-world, there are some risks. The best way to stay safe when shopping online is to know what the risks are and how to avoid them. If you plan on shopping online this holiday season, here are some security risks to watch for and tips to help you shop safely online.

Key Terms To Understanding  online shopping and frauds: e-commerce SSL Web site phishing malware PayPal Related Articles on Webopedia: Did You Know... All About Phishing? SSL: Your Key to E-commerce Security

The Risks: Fraudulent shopping sites, Holiday e-mail scams, and Malware

While the Internet can allow you access to millions of items and stores that you may want to shop for the holidays, it is important to remember that anyone can set up a Web site that looks like a legitimate retail site. This time of year fraudsters know more credit card numbers are given out by online shoppers and to capture those numbers they are setting up legit-looking retail Web sites, accepting consumer's credit card payments for items they purchase — and within a day or two the site is gone. In November and December there are also more instances of legitimate Web sites being hacked, with the results to consumers the same.

Phishing scams are also increased during the holiday shopping season. Phishing e-mails are those that claim to be an established legitimate business in an attempt to scam you into surrendering private information that will be used for identity theft. The e-mail directs you to visit a Web site where you are asked to update personal information, such as passwords and credit card, social security, and bank account numbers, that the legitimate organization already has. The Web site, however, is bogus and set up only to steal your information.

During the holidays phishing scams may be special e-mails that appear to be from online retailers offering "amazing deals, click here" type of offers, or they could be e-mails that appear to be from well-known online retailers requesting you verify your account information due so your order can be shipped. Other scams popular this time of year include fraudulent e-mails that use well-known shipping carriers (such as FedEx or UPS). The golden rule to avoid being phished is to never ever click a hyperlink in link in an e-mail. These links may look correct bur fraudsters can easily hide the true URL you will go to from the link. Always load the retailer's own site in your browser by typing in the Web URL yourself.

Recommended Reading: Webopedia's Did You Know... All About Phishing?

Fraudulent Web sites and phishing scams can lead to financial and identity theft threats, but these sites can also be used to distribute malware. Short for malicious software, malware is software, such as a keylogger, or Trojan horse, that has been designed specifically to damage or disrupt a computer system.

Stay Safe: Tips For Safe Online Holiday Shopping

• Recognize secure shopping sites. Before you transmit any information, verify that the Web site is secure:
  
  • Check the Web site address (URL) in your browser. Normally the address of a site starts with "http". Secure Web sites will start with "https".
    
  • Most browsers will also display a lock icon to indicate you are on a Secure Sockets Layer (SSL) Web site. The lock icon appears in the browser window, but not in the space where the Web page is displayed. You can click the lock icon to see details of the site's security.
  
  
  
  (look for the URL to change to https)
  
  
  (Look for the lock icon. Click the icon to obtain security details)
  
• Never e-mail your personal information to make a purchase. E-mail communications are not secure.


• When shopping online it is best to stick with more well-known products and retail brands.
• In spotting hacked or fraudulent sites designed to look like a legitimate retail site look for slight differences in logo images and colors. Also be sure to look for things like bad grammar usage and misspellings.
• Ensure you can locate common retail site pages such as a privacy policy, contact information (that offers more than just an e-mail address), shipping and return information and guarantees.
• A deal that sounds too good to be true probably is. If you search online for a product and see almost all the retailers you know by name are selling the product for around $150, yet one little retail site has it for $40, then you need to use caution and investigate the site before making a purchase.
• Industry experts advise consumers to pay for purchases using online payment systems like PayPal or by credit card and not debit (bank) cards for maximum protection. Online payment systems offer more security and credit cards are protected by federal law where debit cards are not.
• Be cautions when opting in to a retailer's mailing list. These lists with your information are often shared with unknown third parties.
• Avoid saving your personal information and credit card numbers on shopping sites. Saved information has the potential to be stolen.
• Regularly check your credit card and bank account balances and statements for discrepancies and unfamiliar transactions.
• Be rigorous in keeping usual computer safeguards in place. Update your operating system, anti-virus, and pop-up blocker software to thwart malware that may be inadvertently obtained through fraudulent shopping sites.

DID YOU KNOW... According to the National Consumers League (NCL) 23 percent of Internet fraud complaints in 2007 was for General Merchandise. This stems from sales (not through auctions), where goods were never delivered or they were misrepresented. the average loss per complaint was $1,136.84.

By Vangie Beal
Last updated: December 05, 2008

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