Buying and selling online (ecommerce) using credit cards need not be dangerous. We'll talk about the risks from two different perspectives and discuss what steps you can take to minimise those risks.

Consumers

Most credit card fraud against consumers occurs well away from the internet and is usually caused by credit card details falling into the wrong hands. This can happen through providing your card details to anyone, or even theft from your letterbox. Providing your credit card details over the internet through a secure site is usually safer because you know that it is going to the organisation intended. However, to minimise any risks, remember the following:

• When providing your credit card details online, ALWAYS use secure and reputable sites. You can tell if a site is secure by the small padlock icon at the bottom of your screen which indicates encryption technology is being used

• Check your statements. Report any discrepancies to your bank immediately

The golden rule is to use as much common sense as you would with face to face or telephone transactions. Only deal with online companies that you know are reputable.

Businesses

Although most media reports focus on consumers being ripped off, it is actually businesses that stand to lose more through credit card fraud. Most consumers are typically only liable for the first $50 or so of any fraudulent use of their card, whereas businesses often have to face the possibility of purchased stock not being paid for because an invalid, stolen, or fake credit card was used.

If you're a business who accepts purchases online, here are some simple steps you can take to minimise the risk of fraudulent purchases.

• Make it compulsory for the customer to provide all requested details before the sale is approved, such as full name, address and telephone number.

• Be a little more careful when online customers give you a billing address that is different to the shipping address

• Fraudulent orders are more likely to come from international orders, especially those with free email addresses (eg. Hotmail or Yahoo), because they are so much harder to trace and prosecute

• If in doubt, telephone the client to confirm the order. You may want to make that a standard procedure for orders over a certain value.

As a business, it's always in your best interest to do everything you can to promote your site as being reputable and secure.

Contact us for more information on this topic.

Disclaimer: This page is designed to provide information only and is not a substitute for advice that is specific to your business. Before acting on any of the information above it is important you seek further advice from a professional who has taken into consideration the nature and circumstances of your business.

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