Online Shopping and Credit Card Fraud

Online shopping has been a steadily rising trend, and it looks to stay that way. As you make purchases on the internet, you may wonder what protects your information from being stolen. If you give your card information, what prevents hackers and scammers from using it to commit card-not-present fraud (otherwise known as CNP fraud)?

How Retailers Protect Your Data

Online stores have a few ways to keep your data out of harm’s way.

1. Checking Your Address

Although your card information may be available in a database, your physical address may be harder to find or outdated. Since your credit card company has to send you bills, they’ll have your current location on file, and the online merchant can confirm a match when you provide your present address.

2. 3-Digit CVV

You probably know that your card has a 3-digit code on the back, and you may be tired of typing it over and over. It’s for your protection, though; online retailers are not allowed to store these codes, which helps guard against fraud.

3. Technological Solutions

Most credit card companies will have some programs they use to protect against fraudulent charges. A common one involves checking the details against other purchases you usually make. If the company thinks the new charge is unusual compared to your usual spending habits, they’ll flag it as an attempt at fraud.

These are a few of the ways that online retailers protect your data from anyone who might try to purchase with your account, even though they can’t see your credit card to verify the details.

When Fraud Still Happens

Fraud still occurs sometimes, usually by either a dishonest employee of the business you purchase from or an online phishing scheme. One scheme on the rise, referred to as “online shoplifting,” involves a criminal who orders a product or service, receives it, and files a dispute against the company where he or she will claim not to receive the goods.

Whenever you file a dispute, your credit card company will determine if it is valid. The online retailer will use a chargeback company to refund your purchase and bear the loss of your purchase themselves. The process can be messy and tricky on both sides, but you should receive your money back.

Even if you do experience fraud, you have ways to fight against it. To be safe, though, guard your card and bank information carefully and shop wisely, online or otherwise.