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How to protect yourself from online scams

By Vanessa Tripodi

The Internet has been a marvellous invention for businesses and information-hungry consumers. However, as with any resource, there are always those who will take the opportunity to take advantage of others.

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Here's how to protect your credit card details while shopping online and spot potential scams: 

How to protect your credit card details
According to the Australian Competition and Consumer Commission's Scam Watch, you should keep in mind the following tips when shopping online:

  1. If a deal looks too good to be true, it is probably a scam.
  2. Don't agree to deals or offers on the spot. Instead, if you are speaking with a sales person, tell them that you want to seek some independent advice. You can then contact your local office of fair trading, the Australian Securities and Investments Commission (ASIC) or the Australian Competition and Consumer Commission (ACCC) for more information on a person or business.
  3. Don't send money or give your credit card details to someone you don't know or don't trust and never send them through email. Keep your actual cards safe too and don't store your PIN with your card, or tell anyone else your PIN.
  4. Choose passwords and PINs that would be hard for other people to guess.
  5. Don't enter your details into a website that you think may be insecure.
  6. Check your bank account statements regularly to look for any fraudulent transactions. If you identify a suspicious transaction, report it to your provider.
  7. Don't open unsolicited emails as they could be spam.
  8. Don't click on any links in a spam email, call a number in a spam email or reply to a spam email.
  9. Know who you are dealing with and always try and work with an Australian company as it will be easier to sort out any issues if something goes wrong.

4 warning signs that you've encountered a scam
There are also signs which you can look out for when you are using the Internet. They may indicate that you are encountering an online scam. For example:

  1. A product is advertised at a very low price compared to its worth.
  2. You are contacted outside of the website or business to send your bank details by email or send an immediate payment to another person.
  3. The website does not have enough information about privacy, terms and conditions, dispute resolution or contact details.
  4. The website does not have a secure address, as the URL should start with https:// before you enter your credit card details.

5 common online scams
Always educate yourself about common online scams so that you know what to look out for. Some common online scams include:

  1. Online auction scams. An online auction can be rigged by a scammer. Scammers can also watch auctions and, if you miss out on the purchase, they will contact you outside of the auction site offering you the same product. You could then end up with a faulty product or nothing at all.
  2. Domain name renewals. A fake renewal notice will be sent by a scammer for your real domain name or one which is very similar to your own, with an invoice that looks very much like your real host's letterhead.
  3. Spam emails. Spam emails are emails offering free goods or prizes, cheap products or instant wealth if you just follow a link or send a sum of money. A common email scam is the Nigerian 419 scam which promises a huge reward if you help someone transfer money out of their country by giving them your bank details.
  4. Spyware and key loggers. Spyware can spy on your computer and key loggers record your keystrokes so that scammers can steal your online banking passwords and other personal information from inside your computer.
  5. Upfront payment scams. In this scam, you are asked to send money to receive a product or a reward for signing up, and you receive a lesser gift or nothing at all. A common variation of this bait and switch scam is the ringtone scam where you take up an offer for a free or cheap mobile phone ring tone and you end up being subscribed to a premium rate service.

How to report a scam
If you notice an issue with security or a sales product or procedure online, you should first contact the seller as there could be a legitimate reason for the problem. However, if you are unsatisfied with the response and you suspect a scam, you can report the site to Scam Watch. Scam Watch is part of the ACCC and you can use the online form to report a scam and the investigators at ACCC will do their best to investigate each report.

If you have already completed a transaction but you have used your credit card, you may be able to claim back the transaction cost through your bank or credit card provider if you can prove there has been a fraud involved. Also make sure you tell all of your friends and family about the suspected business or website.

Article by Vanessa Tripodi

  

See related: Report: Card scams cost Aussies $170 million last year; 4 new credit card security features

Published: September 16, 2011

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