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Everyone at some time or another has purchased something from a website that they were afraid may be questionable. It may be that the prices of the items seem too unbelievable, the website is unprofessionally designed or you have some other reservations about it. No matter what the reason, you hesitate to enter your personal information, especially your credit card number.
Overall, 3.9 million Americans were victims of credit card fraud in the year that ended in May, according to a study by the research firm Gartner Inc. That is down from 5.5 million the previous year. The study found that 46 percent of victims had no idea how the fraud occurred, but 21 percent said they thought their credit card number was stolen off the Internet. The previous year, 18 percent blamed the theft on the Internet. As internet theft grows so do the interests of consumers to find a better, safer way.
Bring in virtual credit card numbers. These numbers are given to consumers to replace their own credit card numbers to avoid and lessen the chance of fraud; the virtual number is good for the single purchase and cannot be used again. The online purchase made with the virtual card number shows up on a customer’s bill just like any other purchase. Some issuers even list the virtual card number next to the charge. Card issuers hope virtual, disposable credit card numbers will encourage more consumers to shop the web. The number one reason people stay away from online shopping is the fear that their personal information, including credit card numbers, could fall into the hands of thieves.
Many credit and fraud authorities argue that it does not make much sense to use a virtual credit card number when most all credit card companies insure their cards against fraud. Their thinking is that if somehow your number is compromised, no big deal, the credit card company will cover the fraudulent amount. Dan Clements, head of the Internet security firm CardCops.com, however, calls the limited credit card liability “an illusion.” Clements said credit card numbers are sold and bartered all over the Internet and can be combined with other personal information easily available on the Web to create full-blown identity theft. Then, sorting out the mess the thief makes of your credit report falls squarely on the consumer’s shoulders.
How do the programs work? You sign up for the program (MBNA, Citibank, Discover and PayPal all have them.) and download their software. Enter your credit card info, and generate a new number whenever you want to make an online purchase. Depending on the program, the new number will be one-time use, have a small spending limit with an imminent expiration date, or will be able to be used multiple times but only with one merchant. Your actual account number will only be visible to you and your bank. The merchant never sees your number and cannot retain your information in their database. This way, hackers will only be able to see your temporary number, which will be useless to them.
What a Virtual Account Number Cannot Do
- You cannot pick up theater tickets with a virtual credit card.
- You cannot confirm airline, hotel or rental car reservations with a credit card number that does not exist on a plastic card that you need to show for verification of identity.
- You cannot pay for recurring expenses, such as monthly phone or cable bills, with a credit card number that expires every few weeks.
- Pre-ordering unreleased books, cds, videos and DVDs from the internet is out as well. Because your virtual card number could expire before the merchandise is available for purchase.
- With or without a virtual credit card number, you can take steps to minimize online fraud by using some old fashioned common sense while shopping
- Be sure your transactions are handled through a secure or encrypted mode. Most merchants use SSL, the secure socket layer protocol. You will know you’re on a secure site if the Web page on which you conduct your transaction begins with “https:” instead of the usual “http:”
- Print a copy of the privacy policies, warranties, price guarantees and other important information from the website
- When shopping with a merchant for the first time, look for the Trust-e symbol or a Better Business Bureau online seal, which indicate the seller has been independently audited and deemed trustworthy.
- Monitor your credit card account frequently and keep records of all online transactions. If you find a suspicious transaction on your bill, contact your credit card company immediately.
- Buy a shredder and destroy bills, pre-approved credit offers and other documents with personal information before throwing them out. Not all identity thieves are high-tech hackers. Some use low-tech methods, such as dumpster diving, to swipe personal information.
Shop Safer with an Existing Credit Card
Bottom line, if you want an added bit of security, a virtual credit card number is definitely the way to go. Dishonest retailers and identity thieves who try to use the number to make purchase will not be able to because it has already expired. Consumers who do most of their shopping online can breathe a sigh of relief at the simplicity and effectiveness of this ingenious security measure. There is no reason to fear identity theft or fraud when you can use a virtual credit card number.