How safe is it to shop online?

You might be concerned about giving your credit card details over the Internet. And you ought to be. Around 14% of all credit card fraud occurs online. At around 4%, the fraud rate for online transactions is 24 times higher than it is offline.

Fortunately it's the merchants and credit card companies who pick up the tab. Customers rarely find themselves liable for Internet fraud.

The most important thing you need to look for when you're giving your card details over the Web is a small closed padlock or key symbol, usually at the bottom of the screen (sometimes the top). If you see this, it means your details are being encoded and travelling safely down the wire. If you don't see it, don't give your card details.

The symbol means the retailer uses SSL, a coding method that's extremely hard to crack. It's not impossible to unravel, but the cost of breaking the code is more than your credit details are worth (unless you're Bill Gates). So criminals don't bother.

In any case your credit card company will bear the cost if anything goes wrong. Card owners are supposed to pay a small excess when their card is misused, usually around $50-80, but if your problem happens on the Web then it's likely that the card company will drop the charge or the retailer will pay it.

The reason? They're more worried about Web transactions than you are. They want people to feel safe, and if you make a fuss they'll probably take care of this small charge to keep you quiet.

Your main responsibility is making sure you don't buy something by accident, or enter into a long-term contract with regular payments without realizing it.

Often people sign up for a sex site and don't realize when they accept the terms and conditions they're agreeing to make payments every month for a year or more. The credit card companies are less interested in helping this kind of customer.

Other kinds of subscription services abuse this weakness too. If you pay for your Internet access, be careful when you change Internet companies. Your old company might surprise you with an annual charge many months after you've abandoned them. And it will be legal.

Two more tips: don't use a debit card. Your protection if things go wrong is much weaker than if you use a credit card. And shop carefully on auction sites. They account for 85% of Internet fraud by deception.

Finally, are your credit card details safe on the computers of Internet retailers and banks? Unfortunately, the answer is a resounding NO! There are now far too many cases of databases being hacked, and the most systems still have an enormous number of technical weaknesses. It's a dirty little secret of the Internet that will be fully revealed one day.

Once you've used a credit card on the Internet, check your card statements carefully. There is a definitely a chance that your details will get into the wrong hands.

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