When you
shop online, you "know" that the Internet is a dangerous place
for your credit card. Your common sense tells you that it's always better
to call the 800 number rather than send your credit card number over
the Net. It turns out that what you "know" and your common
sense are absolutely and positively wrong.
Understand that I'm not saying that the Internet is a perfectly safe
place for your credit card. It's not, but neither is your waiter's or
store clerk's hand.
As your waiter walks away with your card, have you ever considered the
possibility that he may be running it through his machine more than
once.
The fact is that your credit card is never perfectly safe. This is a
relative safety, not absolute safety, issue though. Life is all about
relative safety issues. If we were seeking absolute safety, we'd never
let our kids out of the house.
The Internet has unfairly developed an unsavory reputation when it comes
to credit cards. Yes, there is credit card fraud on the Net, but it's
a big "so-what." There's credit card fraud everywhere.
I've never understood why the same people who will call 1-800-Send-Me-Some-Junk,
read their credit card number to a minimum wage order taker working
for a company they've never heard of, located they don't know where,
won't send their credit card number to a reputable store online. Sometimes
the things that we do aren't rational.
It'll be our little secret, but have you ever had a store clerk hand
you the carbon copy of your credit card charge, torn it into four perfectly
neat little pieces and handed it back to her to discard? There you stand
- the human shredding machine. It's absurd when you think about it.
People who won't send their credit card number over the Net wear that
fact like a badge of honor. It's as if they're the all knowing ones
and those of us who transmit that magic number are the fools. It's a
misplaced concern and it does matter in the big picture.
It matters because this phobia about credit cards and the Net hurts
the growth of e-commerce because credit cards are the fuel that feeds
e-commerce. For all the talk about e-cash, online wallets and smart
cards, the fact remains that today's payment over the Net is a story
that's all about plain old credit cards.
Here's the real bottom line for those of you who would rather wear a
big diamond on your finger in a bad neighborhood than let your credit
card number traverse the Net. No matter how much money a thief spends
on your credit card - whether the thief is a store clerk who "forgot"
to give you your card back - or - that hacker from your nightmares who
snatched your credit card number out of cyberspace, you lose $50 at
worst.
In 1975, Congress passed the Fair Credit Billing Act (FCBA). Although
it predates when I invented the Internet (I wanted to stake my claim
here too), it provides all the protection you need. It's one of those
laws that work.
If you follow FCBA's procedures, your maximum liability for unauthorized
use of your credit card is limited to $50. Moreover, if you're a good
customer, most banks routinely waive that $50.
You do have to follow the law's procedures to get its benefits. First,
and most importantly, send your creditor a written billing error notice
within sixty days of receiving the first bill that contained the error.
If you look on the back of any credit card bill, you should see a full
summary of FCBA and its procedures.
Now that I've told you to feel free to use your credit card online,
please don't take that like a 16-year old who's been flipped the car
keys by dad and then barrels down the road at 90 miles per hour. There
are prudent steps you can take to help minimize the risk of being victimized
by online credit card fraud.
You can start by knowing your merchant. Have you heard of them? Are
they reputable? There is no magic answer here, but I would suggest that
you should have less concern buying from Sears.com than INeverHeardofYou.com.
One thing you should look for before you send your card number over
the Net is a secure server. A secure server will encrypt your number
so that if a hacker were to intercept it, it would be gibberish. Usually,
a website will loudly proclaim that you're in a secure server so that
you'll feel comfortable using your credit card.
If you have any doubt, you can look at the address bar on your browser.
If it says "https" before the address instead of "http,"
you can feel pretty good about being in a more secure environment.
So, go forth and use your credit card online this holiday season. I'm
not promising a perfectly safe journey. There are dangers online, but
look at the bright side of online shopping. Nobody will snatch your
purse or pick your pocket.
Disclaimer: The advice given in the TechLaw column should not be considered
legal advice. This newsletter only provides general educational information.
You must never rely upon the advice given here. Your individual situation
may not fit the generalizations discussed. Only your attorney can evaluate
your individual situation and give you advice. Except as provided below,
you may feel free to forward, distribute and copy the TechLaw column
if you distribute and copy it without any changes and you include all
headers and other identifying information. You may not copy it to a
website.
© 2002 Mark Grossman All Rights Reserved
I welcome your comments and questions, but due to the volume of e-mail
I get, I cannot promise that every comment or question will be answered.
Mark Grossman is a shareholder and leads the Technology Law Group of
Becker & Poliakoff, P.A. If you would like information about retaining
the Firm's legal services, you can contact Mr. Grossman at 305.260.1018
or 800.533.4874.