|Rebecca Lindsey is a staff writer for Credit Ratings.com.
offers a consumer report of US credit cards and instant online approvals. Named
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Citizens for Fair Credit Card Terms, Inc.
you’ve ever purchased anything on the Internet, you are probably a
big fan of the ease and efficiency of the purchase, along with the
“delivered to your door” aspect. Despite the recent downfall of
many online companies, shopping online remains very popular. In
fact, eMarketer.com, a research firm that focuses on online trends,
predicts online business to total $65.9 billion in the year 2001, a
57% increase from 2000.
Is online shopping really safe?
Stories of high-tech hackers breaking
into company databases on the Internet to steal customer information
(such as credit card numbers) stop many people from making online
purchases. Although these types of problems don’t happen often,
there is an ever-present fear among consumers that the wrong person
may get hold of their credit card number or other private
Because of booming e-commerce and the
love affair with the Internet, there is much at stake for credit
card companies should these problems or fears get out of hand. As
you might expect, companies are working quickly with new technology
to stop the problems and calm the fears of their customers. Their
solution? Disposable credit card transaction numbers.
First introduced by American Express
in September of 2000, a disposable transaction number is a one-time
number assigned to a credit card customer that enables them to make
a purchase online. American Express touts its Private Payment
program as a system that gives their consumers peace of mind by
making their online shopping experience as secure as possible.
Private Payments assigns unique
random numbers that are linked to a consumer’s actual card
account, but the numbers are only temporary and do not reveal any
private information. This temporary credit card number is good for
one purchase only, meaning that it does no good for someone to swipe
that number because they won’t be able to use it after the initial
purchase. Private Payments is free to American Express Consumer
Cardmembers and Small Business Cardmembers and can be used at all
web sites that accept the American Express Card.
Discover is another company that has
ventured into this realm by offering their Deskshop Virtual Credit
Card. Deskshop differs from Private Payments in that it allows the
user to make multiple purchases from the same online store. For
example, each single-use card number is unique to an online store
that you visit and will not be valid at any other store. In
addition, you may use the same number for recurring charges such as
monthly bills that you elect to pay online.
Although disposable credit card
numbers are not available with every company yet, expect these types
of programs to be offered by all major credit card companies soon.
In the meantime, protect yourself with safe Internet shopping
practices. You can find some tips for safe online credit card use on
the Fraudbureau.com web site. Also, be sure to visit the Scams and
Internet Security section of our site for additional resources.
But aren’t consumers already
protected against credit card fraud?
Recently Cardratings.org articles have
reiterated that the maximum liability for credit card holders in the
case of loss or theft of their credit cards is $50 (many card
issuers now even have zero liability policies in place). So why are
programs such as Private Payments needed if consumers are already
protected? The main reason is to alleviate hassle. The business of
contacting your credit card company and explaining the situation,
filling out the necessary forms and making claims can be cumbersome.
It makes more sense to be protected from fraud in the first place
rather than after it has taken place. One more reason? To protect
merchants who do business online. Because of chargebacks from
fraudulent purchases, online fraud costs merchants millions of
dollars overall each year.
One more note regarding protection
with online shopping. Although ‘disposable’ credit card numbers
are safe to use in most cases, companies do recommend that some
online purchases be made with your actual card number. These
occasions include purchases that require the buyer to present their
credit card in order to receive their purchase, such as the purchase
of airline and movie tickets. Check the American Express Private
Payments page for a complete list of purchases that are better made
with the real thing.