How To Avoid Costly Mistakes Shopping Online

Has Irene Callaway just become an Internet statistic? It is estimated that consumers lost over $125 million to online scams last year and complaints are up by 60% in the past two year. There are a lot of dot cons out there.

Irene Callaway is a very unlikely victim. She is college educated, very intelligent and a seasoned Executive with Citi-Bank. This is not the first time she has made an online purchase. It is the first time that she has attempted to return the merchandise she purchased. The biggest drawback to shopping on the Internet is that it’s physically impossible to examine items you are purchasing. Unless it’s an item that has been purchased before, the buyer must rely on the descriptive abilities of the seller. If the seller omits an aspect that is very important to the buyer, the omission can only be found after a delivery has been accepted. At that point, it maybe too late.

The Problem Is Scanning Everything

In the case of Irene Callaway, she neglected to read the seller’s return policy. She also, indicated that she agreed with everything in the Term Of Service (TOS) by checking the “I Agree” button on the order page. What she did, is what most of us do in the excitement after making the decision to purchase. Nobody wants to spend 5-10 minutes reading legalized language before ordering. This, believe it or not, is the largest source of what is reported as “scams” on the Internet. In fact, many sellers realize that most buyers never read the TOS so they literally write the rulebook that binds the relationship.

What Can We Learn?

We can all learn from Irene’s experience, first we should know that we never commit our credit card to a site before reading the Terms of Service. Scan the TOS, time spent at this point is miniscule compared to the time you may have to spend trying to cancel the order. Save yourself some time by NOT reading all the legal mumbo-jumbo and knowing the questions that you need answered.

· What is the Company’s return policy?

· Who pays for return shipping?

· Cancellation Policy, i.e. What exactly is required?

· Where is the company located?

· Is there a restocking fee?

· Refund type issued Cash, Check, Store Credit?

· Which jurisdiction governs the site's operation?

Policy/Terms Of Service Or Statement?

The bottom line is that its mandatory for every online retail store to take into consideration that purchases are being made; sight unseen. Therefore, every must have what amounts to a Terms Of Service (TOS) statement which must include the grace period the buyer has to examine the merchandise after it has been delivered If the site content does not recognize this fact; move on.

If you agree with the site’s TOS it does not mean that it’s all right to plunk down your credit card information. The TOS contains the rules that the seller is bound by in a court of law; however, anyone can post TOS that is acceptable to most people.

According to the US Department of Commerce over $300 billion in business will be conducted over the Internet during the first of the new millennium. Chances are good that you will be one of those people making a purchase online soon.

Other Things To Look For

There are other elements that must be present on any legitimate online retail site.

Reputation/Background – Do you recognize the company or individual from whom you are about to purchase? This is the Internet anyone can build a site and present to you any persona or institution. If they are unknown: are they associated with online verifications sites such as TRUSTe (www.truste.org) , iCop or their city’s Better Business Bureau. Are they associated with any company that is immediately recognizable?

Contact Information: Is there complete contact information on the site. Complete meaning an individual’s name, and a phone number. Find out the name of the city, state, country in which the business is registered. A huge red flag should pop up if the site does not have a contact address and phone number.

The site also loses points if you decide to call the phone number during business hours and the call is picked up by an answering machine. Contact information does not mean an online email form without an email address.

Site Security/Encryption – Every site that accepts credit cards must be encrypted and protected by the appropriate firewalls. Read the content of the site to assure yourself that your information will be protected. This information is usually published on the order page.

The web site owner may not know it but a hacker can snatch customers identity from right under their noses and wreck havoc on their lives. The FTC advises on what should be done to prevent identity theft.

Identity Theft

Check for the prefix https:// . . . in the Uniform Resource Locator box which lists the website’s web address to be sure that a site you are using is secure. Make sure it is https and not just http, the s indicates that the page is secure. You can also look for a closed padlock or an unbroken key symbol on the bottom of your screen.

Create a paper trail, keep a copy of the order page website and make sure to include —its Uniform Resource Locator (URL). The URL ensures that you are dealing with the right company. It's also a good idea to print out a copy of your order and confirmation number for your records.

Credit Cards, Debit Card Or Check?

The safest way to shop on the Internet is with a credit card. In the event something goes wrong, you are protected under the federal Fair Credit Billing Act. You have the right to dispute charges on your credit card, and you can withhold payments during a creditor investigation. When it has been determined that your credit was used without authorization, you are only responsible for the first $50 in charges. You are rarely asked to pay this charge.

We recommend that you obtain one credit card that you use only for online payments to make it easier to detect wrongful credit charges. Make sure your credit card is a true credit card and not a debit card, a check card, or an ATM card. As with checks, a debit card exposes your bank account to thieves. Your checking account could be wiped out in minutes. Further, debit and ATM cards are not protected by federal law to the extent that credit cards are.

Shipping

Pay Attention to Shipping policy under the law, a company must ship your order within the time stated in its ad. If no time frame is stated, the merchant must ship the product in 30 days or give you an "Option Notice." This gives you an opportunity to cancel the order and receive a prompt refund, or agree to the delay. The following are key shipping questions to ask:

· Does the site tell you if there are geographic or other restrictions for delivery?

· Are there choices for shipping?

· Who pays the shipping cost?

· What does the site say about shipping insurance?

· What are the shipping and handling fees, and are they reasonable?

The Best Deterrent Is You

The consumer is ultimately the best possible deterrent to online fraud. Vigilance and knowing exactly what to look for limits the possibility of fraud. The onus is on the seller to build and earn your trust. Your responsibility as a consumer is to review the site’s Terms of Service and content to ensure that you are dealing with a reputable company or individual. The best part about doing your due diligence initially is that once its done there is no need to do it again on your next purchase.

Additional Resources

Listed below are web sites that provide additional information about shopping online.

The FBI Net Fraud The FBI's Internet Fraud Complaint Center allows you to report suspected cases of Internet and e-commerce fraud.

ABA Tips: www.shopthenet.org Online shopping tips provided by the American Bar Association.

BBB Online The Better Business Bureau certifies web merchants with a privacy seal of approval.

Research and report merchants through the BBB and also e-commerce fraud problems.

BBB Holiday Shopping Tips The Better Business Bureau's holiday shopping tips.

FTC Shopping Advice The Federal Trade Commission's online shopping advice.

FTC Auction Fraud Tips The Federal Trade Commission's tips on Internet auctions.

USDA Shopping Tips Created by the U.S. Food and Drug Administration to provide shopping tips for buying online prescriptions and over-the-counter drugs on the web.

National Fraud Cntr The National Fraud Information Center, Maintains information on online scams and lets you file complaints.

DMA Order Rules The Direct Marketing Association's site of member merchants who comply with the federal "Mail/Telephone Order Merchandise Rule" that requires, e.g. 30 day delivery.

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