November 2006
Protect yourself when shopping online
Online merchants offering implausibly low prices on brand-name TVs, cameras, and other goods are trolling for bargain hunters
on the Internet. But if you bite, you might be bitten back. A too-good-to-be-true deal could be a scam that will leave you
empty-handed, with no recourse -- even on a reputable site that offers a buyer-protection plan. Fortunately, there are a number
of things you can do to protect yourself from fraud.
When a deal sounds too good to be true, assume it's bogus. Be suspicious when sellers offer new merchandise at prices much lower than those of familiar retailers. High-definition TVs and expensive camera equipment are favorite targets of con artists. Consider comparison shopping at sites like Pricegrabber or Yahoo Shopping to get an idea of baseline prices from legitimate retailers (ConsumerReports.org subscribers have access to a customized version of Yahoo Shopping's service for selected products).
Watch out for refurbished merchandise. Especially when it comes to electronics, many sites offering bargains sell used, reconditioned products. Be sure to read all of the fine print in the description to determine whether your product is new or refurbished. If it is refurbished, ask if it comes with a manufacturer's warranty.
Beware of "gray market" goods. Those are branded products diverted from approved distribution channels. They're not illegal, are usually just as good as authorized versions, and can sometimes be real bargains--if you're willing to take a chance on service, since gray-market goods might carry warranties provided by the retailer and not the manufacturer. If your product breaks or arrives damaged and that warranty proves worthless, you could find yourself wishing you had spent a little more to buy the product from an official distributor.
Don't assume that a site's protection program will protect you from all fraud. Such plans often limit your coverage to items that never arrive or are "materially different" from the product described by the merchant. Products damaged during shipping might not be covered. Some protection programs explicitly exclude payments made by wire transfer or sent to a post office box or any international location.
Know from whom you're buying. Some services such as Amazon sell products for other merchants, who set their own policies. Shipping, return and other policies could be different from those of the site you're on, depending on who is actually filling the order. Fees for shipping, in particular, can be much higher when dealing with some of those merchants.
Guard your privacy and security. Read a site's privacy policy. It might tell you that the site sells customer data, which means your e-mail In box could be jammed with spam. One trick is to set up an e-mail account exclusively for shopping online. As for security, when entering personal data, make sure you're on a Web page that triggers a security icon such as a closed padlock on your browser, which indicates a secure connection for transmitting sensitive information. Unfortunately, that doesn't guarantee the site is legitimate or that your information is safe from theft once it's in a retailer's database.
Check return policies. Some sites charge restocking fees as high as 25 percent and others don't accept returns of opened merchandise. Also, if you return items that came with free shipping, chances are you'll have to pick up the cost for the return trip. Some sites might deduct the original free-shipping charges from your refund or charge a return fee. Some retailers might make you pay shipping costs even if a product is defective.
Take precautions when you pay. Con artists often ask buyers to bypass the usual online shopping cart. Instead, they want you to wire them money via Western Union, arrange a bank-to-bank wire transfer, or deposit money into an escrow account that could turn out to be fraudulent. Stick with the usual payment methods recommended by reputable Web sites. Using a credit card will limit your liability if problems develop.
Be wary of merchants who want direct contact. If a merchant calls you after you've placed your order to "verify" your information, it might be trying to sell you accessories or an extended warranty. In most cases, you should reject all such "offers." If you feel the merchant is applying undue pressure or engaging in a "bait and switch" scheme, you should cancel your order and contact your credit-card company, the Internet Crime Complaint Center (www.ic3.gov.) and the attorney general in the state where the merchant operates.
Consider credit-card alternatives. If you're uneasy about casting your credit-card number around the Internet, several services, including PayPal, Google Checkout and Bill Me Later, let you avoid entering your credit-card information directly on merchant sites. Before signing up for any of the services, heed this advice:
Sound the alarm. If you suspect fraudulent activity, or worse, if you have fallen victim to a con artist, alert the shopping site and any other organization involved in the transaction, such as Western Union. You should also notify the Internet Crime Complaint Center at www.ic3.gov.
When a deal sounds too good to be true, assume it's bogus. Be suspicious when sellers offer new merchandise at prices much lower than those of familiar retailers. High-definition TVs and expensive camera equipment are favorite targets of con artists. Consider comparison shopping at sites like Pricegrabber or Yahoo Shopping to get an idea of baseline prices from legitimate retailers (ConsumerReports.org subscribers have access to a customized version of Yahoo Shopping's service for selected products).
Watch out for refurbished merchandise. Especially when it comes to electronics, many sites offering bargains sell used, reconditioned products. Be sure to read all of the fine print in the description to determine whether your product is new or refurbished. If it is refurbished, ask if it comes with a manufacturer's warranty.
Beware of "gray market" goods. Those are branded products diverted from approved distribution channels. They're not illegal, are usually just as good as authorized versions, and can sometimes be real bargains--if you're willing to take a chance on service, since gray-market goods might carry warranties provided by the retailer and not the manufacturer. If your product breaks or arrives damaged and that warranty proves worthless, you could find yourself wishing you had spent a little more to buy the product from an official distributor.
Don't assume that a site's protection program will protect you from all fraud. Such plans often limit your coverage to items that never arrive or are "materially different" from the product described by the merchant. Products damaged during shipping might not be covered. Some protection programs explicitly exclude payments made by wire transfer or sent to a post office box or any international location.
Know from whom you're buying. Some services such as Amazon sell products for other merchants, who set their own policies. Shipping, return and other policies could be different from those of the site you're on, depending on who is actually filling the order. Fees for shipping, in particular, can be much higher when dealing with some of those merchants.
Guard your privacy and security. Read a site's privacy policy. It might tell you that the site sells customer data, which means your e-mail In box could be jammed with spam. One trick is to set up an e-mail account exclusively for shopping online. As for security, when entering personal data, make sure you're on a Web page that triggers a security icon such as a closed padlock on your browser, which indicates a secure connection for transmitting sensitive information. Unfortunately, that doesn't guarantee the site is legitimate or that your information is safe from theft once it's in a retailer's database.
Check return policies. Some sites charge restocking fees as high as 25 percent and others don't accept returns of opened merchandise. Also, if you return items that came with free shipping, chances are you'll have to pick up the cost for the return trip. Some sites might deduct the original free-shipping charges from your refund or charge a return fee. Some retailers might make you pay shipping costs even if a product is defective.
Take precautions when you pay. Con artists often ask buyers to bypass the usual online shopping cart. Instead, they want you to wire them money via Western Union, arrange a bank-to-bank wire transfer, or deposit money into an escrow account that could turn out to be fraudulent. Stick with the usual payment methods recommended by reputable Web sites. Using a credit card will limit your liability if problems develop.
Be wary of merchants who want direct contact. If a merchant calls you after you've placed your order to "verify" your information, it might be trying to sell you accessories or an extended warranty. In most cases, you should reject all such "offers." If you feel the merchant is applying undue pressure or engaging in a "bait and switch" scheme, you should cancel your order and contact your credit-card company, the Internet Crime Complaint Center (www.ic3.gov.) and the attorney general in the state where the merchant operates.
Consider credit-card alternatives. If you're uneasy about casting your credit-card number around the Internet, several services, including PayPal, Google Checkout and Bill Me Later, let you avoid entering your credit-card information directly on merchant sites. Before signing up for any of the services, heed this advice:
- Use a credit card to make payments to the services. You'll have more protection.
- Never click on links in e-mail that appears to be from payment services, especially if it asks for confidential information.
And don't reply. If you do, you may become a victim of phishing, a scam designed to cull sensitive personal data.
- With the Verified by Visa or MasterCard SecureCode programs, you can use your credit card online with an added password protection
(See the companies' Web sites for details.) instead of the payment services.
Sound the alarm. If you suspect fraudulent activity, or worse, if you have fallen victim to a con artist, alert the shopping site and any other organization involved in the transaction, such as Western Union. You should also notify the Internet Crime Complaint Center at www.ic3.gov.
