Pioneer Editorial: Internet: Easy to shop, easy to scam
Use of the Internet has become more and more a convenience of shoppers, as shown by the whopping Internet sales figure on Monday. But the high use also makes consumers an easy mark for Internet scams.
Cyber Monday -- the Monday after Thanksgiving -- has been coined the Christmas online shopping day of the season. This past Monday, researchers say U.S. shoppers spent $887 million on Internet sales, matching last year's single-day record for online shopping.
Last month, U.S. Sen. Amy Klobuchar, DFL-Minn., held a news conference on the University of Minnesota campus to highlight online scams that consumers may find this shopping season. A former Hennepin County attorney, Klobuchar says "the growth of online shopping has attracted wrongdoers who exploit confusion in the Internet marketplace to rip off consumers."
An example she cited of "post-transaction marketing" is when a handful of direct marketing firms make deals with hundreds of Web sites and online retailers. The sites get a "bounty" or finder's fee for every shopper they pass along to the direct marketing firm. As a shopper completes their online transaction, they are offered something like cash back rewards or a discount coupon. The offer is designed to look like a part of the legitimate transaction, but the fine print hides the truth. The consumer is asked to supply an e-mail address or simply punch a button, and then the credit card information just supplied to the retailer is passed along to the direct marketing firm, which starts charging a fee for a "club membership" or a service.
Klobuchar said at least one direct marketer acknowledged to Congress that 90 percent of its members don't know anything about the membership. And as of June, there were 4 million Internet consumers currently enrolled in the membership programs of the three largest direct marketers -- Affinion, Vertrue and Webloyalty. Those firms and their partners have garnered $1.4 billion in revenue from these tactics.
Klobuchar said online shoppers should follow the time-honored advice: "Buyer beware." She offered several specific tips:
E Don't rush through the online checkout process. After finishing their online shopping, people often want to get through the checkout process as quickly as possible, which makes them vulnerable to deceptive offers.
E Review the charges on your credit card bill as soon as you get it. People should be alert for any mystery charges and immediately contact their credit card company to cancel unauthorized charges.
E Keep in mind the difference between credit cards and debit cards in terms of liability for unauthorized charges. Typically, your liability on a credit card is capped at $50. But the liability on a debit card can be much greater.
E Best of all, consider buying locally. The Internet may be convenient and offer a wide range of choices. But when you shop and buy locally, you are also supporting local businesses that provide local jobs and contribute to the local economy.