ABA Family Legal Guide

Computer Law

Online Purchases

Is it safe to pay online by credit card?

A major concern of online shoppers is whether the credit card information they provide is truly protected from the prying eyes of thieves and computer hackers. Some credit card associations offer zero-liability policies for use of credit cards and branded debit cards. Under such policies, cardholders are not responsible for any amount of unauthorized purchases.

Another way to protect yourself is make sure you use a recent version of one of the standard browser systems, which will encrypt or scramble the information you send and thus increase the security of the transaction. Most computers come with such a browser already installed, or else you can upgrade for no charge. Software programs are also available. A 128-bit secure browser is generally better, since a 40 bit can be broken.

In addition, many online companies--aware of consumer concerns--use Secure Sockets Layer (SSL) technology to encrypt (encode for the purposes of security) the credit card information you send over the Internet and give you assurances of the identity of the website. These sites usually inform you they are using this technology. For example, some sites use a padlock icon in the bottom right-hand corner to indicate an encrypted transmission. Or check if the Web address on the page that asks for your credit card information begins with "https:" instead of "http:"-- if so, this technology is in place.

With these security mechanisms in place, it is safer to pay by credit card than by check, money order, wire transfer, or cash. Once the vendor negotiates your check or receives the wire transfer, the money is in their possession and control and it may take considerable effort to recover it if there is a problem. If you pay with a credit card and a problem arises, the federal Fair Credit Billing Act protects the transaction. This law gives you the right to dispute charges and temporarily withhold payment while the charges are being investigated.

You can further protect yourself by keeping good and up-to-date records of your online transactions. Print copies of your online communications with the company and your purchase order and confirmation number. Keep these documents on file. And keep in mind that reputable online merchants will provide all of this information to you in an easy-to-print format, because they want you to be a repeat customer. It makes sense to them to make your experience with them pleasant and agreeable throughout. Also, review your bank and credit card statements for billing errors or unauthorized purchases, which might have been made by someone who illegally accessed your information.

You can further limit your exposure by acquiring a low-limit credit card and using that card to pay for your online purchases. The lower limit reduces potential exposure if the number is misappropriated.

Many online vendors have policies limiting shipping to the billing address of the credit card used to pay for your purchase. If you want to have your purchases delivered to your office instead of your house, you will find that it is much easier to accomplish that goal if you use the office address for billing purposes on one of your credit cards.