Archive for the ‘ecommerce’ Category

Online Scams on Reputable Web Sites?

Tuesday, February 16th, 2010

If you're committed to managing your finances, you likely know how to spot questionable offers. However, simply shopping at trustworthy web sites may not stop you from seeing surprise charges.

A recent press release from the office of New York Attorney General Andrew Cuomo details an online scam that seems to be shockingly widespread among big name, well respected online retailers.

According to the press release, Cuomo has subpoenaed 22 companies for information about their relationship with companies executing the scam. Here’s the deal.

The Scam: Sharing Your Card Info

The online scam reportedly works like this:

  • You make an online purchase. You buy something at one of your favorite web sites. As part of the transaction, you enter the number of either a debit or credit card.
  • You proceed to checkout. Once you’ve completed your purchase, you’re offered a promotional or discount deal for future purchases.
  • You follow a link. In order to redeem the offered "deal," you must navigate away from the web site of the company with whom you just did business.
  • Things get murky. Once you’ve clicked a link that takes you away from the initial shopping site, you don't have to enter any more information. You may only have to click an "accept" button, or do nothing at all.
  • Your bill has unexpected charges. Next time you receive your bill or statement, you may notice charges on it that you don’t recognize.

What has apparently happened during the "murky" stage is this: trusted retailers sell your card information to third party sites, which offer you a membership or subscription to something you probably don’t want.

Because you never have to re-enter your credit card details, you likely will not realize you ever signed up for anything. And the details about the terms and costs of the service or product are likely hidden in fine print on the third party website.

What's Being Done

Luckily, Cuomo’s office has taken steps to address these practices (though, according to sources, no law currently exists that prevents retailers from selling your card information to others).

The New York AG’s office reports that the following companies have been contacted for information related to this scam (though they have not been charged with anything): Barnes & Noble, Orbitz.com, Buy.com, Ticketmaster.com, MovieTickets.com, FTD.com, Shutterfly.com, 1-800Flowers.com, Avon.com, Budget, Staples.com, Priceline.com and more (see site).

Bottom line: Proceed with caution when shopping online. When in doubt, don’t click on any link, especially those offered at checkout. And if you suspect foul play, file a complaint with the FTC.

Additional Resources

Online Identity Theft: Changing the Game (PDF)

Types of Scams (PDF)

Posted in Financial Literacy, credit card fraud, ecommerce, online scams | Comments Off