Late night browsing for the perfect product, clicking on it and dragging it into your cart, inserting your credit card details and having it delivered to your door within days – what could be more convenient than online shopping?
Last year, online retail in South Africa reached 1% of overall retail, that’s R9 billion, according to online research company World Wide Worx. This might seem negligible, but the sector has shown a growth rate of above 20% since the start of the 2000s.
What’s holding people back from online shopping? The fear factor. In a survey by Effective Measure, 23% of respondents said they ‘do not trust online payment’, and 17% said they ‘do not trust the sites’.
‘Online shopping is as safe as bricks-and-mortar shopping if a few basic precautions are taken,’ says Arno Viljoen, Absa’s Head of Fraud Risk Strategy. Card fraud, previously dominated by counterfeit cards, has certainly evolved. ‘Three years ago, card fraud was built on someone making a copy of your card and printing the data onto another card. They’d then use that card in a bricks-and-mortar shop.’ With the introduction of chip cards and PINs, there’s been a 70% reduction of this kind of counterfeit fraud. Scammers have had to adapt – and in that process have moved into the online fraud space. In order to facilitate this new type of fraud the criminals now focus on stealing the data required to shop online, i.e. they need your name, credit card number, card expiry date and CVV (the three- or four-digit number at the back of your card).
While the normal person on the street has nightmares of nefarious fraudsters hacking their online transactions or compromising their data left on online shops, this should not be a factor preventing our clients from shopping online, says Viljoen. All banks, and a variety of other institutions, are continuously working toward minimising this risk. Assisting them through some simple safety practices still leave your card, on-line or at brick & mortar stores, as the safest way to transact, especially when measured against the risks of using cash.
The key to staying safe while shopping as you surf is in protecting as much of your personal data as possible. Read on to find out how you can sidestep scammers:
Know where you’re shopping
If you’re thinking of purchasing goods at a new shop, and aren’t sure whether it can be trusted, turn to Google. ‘Before you buy from any merchant, Google their name and read what other people are saying about them,’ says Viljoen. ‘If they’re dodgy, other people will have complained about them.’
Look out for security features
Legitimate merchants have a stake in ensuring customers’ information is safe and will have security features in their shops, whether through using One Time Passwords or prominently displaying security logos or certifications from card companies such as Visa and MasterCard. Also make sure the website you’re buying from is encrypted – look for a ‘lock’ logo in the website URL bar or check that the URL starts with “https” instead of “http”.
Read the Terms and Conditions before you buy
‘In a large percentage of cases where customers claim they’ve been defrauded, it hasn’t actually been fraud,’ says Viljoen. ‘So many people will subscribe to services online, like when they see an ad for diet pills, submit their credit card details and forget about it. Then, after the 30-day trial, their card will be charged and they’ll think they’ve been defrauded, when it is actually all in the terms and conditions of the service they’ve signed up for.’ In the scenario Viljoen describes, no illegal activity has taken place and consumers can do well to protect themselves by reading all the small print every time they sign up to a new online service.
Protect your PC
Personal data has become the new currency for online scammers, so it’s best to make sure both your personal computer and mobile device is protected with the latest antivirus software. Never respond to a spam email offering an online deal – after all, spammers can be scammers.
A simple way to stay on top of all transactions is to register for mobile notifications with your bank so you’re always informed when a transaction is made with your card. Also, read your card statements every month to ensure you aren’t paying for any mystery services.
Safeguard your card details
All someone needs in order to successfully defraud your credit card online is your name, credit card number, expiry date and CVV number. Never save your credit card details on your PC, never email them to anyone and never let your card out of your sight. Remember, no bank will ever ask you to share your PIN or One Time Password over the phone. ‘The moment someone asks you for that, know that they’re a fraudster,’ says Viljoen.
Disclaimer: The advice contained on this blog is for general purposes only and does not take into account individual circumstances, objectives or financial needs. Accordingly, readers are advised to seek appropriate advice from licensed professionals prior to making any investment, or taking up a financial product or service.