Protect Your Personal Finances While You Shop Online

Shopping online is convenient. However, it can also expose you to hackers who want your personal data and financial information. Public Wi-Fi networks can leave you vulnerable to scammers trying to get your private information. While consumer protection laws protect you from unauthorized purchases, you should report any suspected fraud.

Learn how to protect your personal finances when shopping online. For more information, talk to a consumer protection lawyer about your rights.

Online Consumer Protection Laws

Many consumers pay for their internet purchases with a credit card. The Fair Credit Billing Act protects online shoppers. The Electronic Funds Transfer Act protects consumers who pay with their debit cards or ATM cards.

Congress enacted the Electronic Funds Transfer Act and Federal Credit Billing Act in the 1970s and 1980s to protect consumers using electronic funds or credit cards. While these laws came before the online shopping boom, they are important for online purchases.

Online payment options are expanding to new apps and ways to pay—beyond credit cards and debit cards. Common examples include:

• Venmo
• PayPal
• Cash App
• Apple Pay
• Google Pay
• Samsung Pay
• Zelle

INFORM Consumers Act

The INFORM Consumers Act is a federal consumer protection law for online shopping. INFORM stands for Integrity, Notification, and Fairness in Online Retail Marketplaces. This law went into effect on June 27, 2023. INFORM requires online marketplaces to disclose information about high-volume third-party sellers. This applies to online marketplaces like Amazon, eBay, or Temu.

Online companies have to collect bank account information, tax IDs, and contact information from qualifying third-party sellers. They must also verify the information and keep it up to date. Consumers must have a clear way to report suspicious actions of sellers online. To report INFORM online sales violations, contact the FTC at ReportFraud.ftc.gov.

When You Pay Online With a Credit Card

Many people are concerned about having their credit card numbers stolen or misused when they shop online. A stolen credit card is a big headache. You should understand how the Federal Credit Billing Act protects online consumers.

You generally aren’t responsible for unauthorized purchases when someone steals your credit card information. But if someone takes your physical card, you might have to pay for the first $50 of unauthorized purchases.

The law also protects credit card users against billing errors. Remember, you must notify the credit card company as soon as possible if your bill has a mistake. Contact your credit card company no later than 60 days after receipt of the first bill containing the error or unauthorized charges.

Before you enter your credit card information to make an e-commerce online purchase, make sure the website is secure.

When You Pay By Debit (ATM) Card

You have different obligations if you use a debit card than a credit card. Under The Electronic Funds Transfer Act, you must report unauthorized use within two days of learning of the fraud. Otherwise, you may be on the hook for unauthorized charges beyond the $50 limit.

If you wait and report the problem between two and 60 days after learning of it, you could be liable for up to $500 in unauthorized purchases. If you wait more than 60 days, you may have to pay for the unauthorized charges.

You can turn on text or email notifications to know when anyone is using your bank account information.

Shopping With Payment Apps

Paying with mobile apps like PayPal, Venmo, and Cash App is usually safe. These apps have security features and encrypted transactions. Most scams using these apps happen when scammers pretend to represent legitimate businesses to get your information.

Make sure you’re using payment app security features, and only send money to users you trust. If you get an unsolicited email or phone call from the payment app, be aware that a scammer may be trying to get your information.

How Can You Minimize Your Identity Theft Risk?

You can minimize risk while you shop from the comfort of your home or office in several ways. As much as you can, ensure you are shopping on secure websites. Carefully review the website’s return policies before placing your order. Save a copy of your order form or confirmation email for your records.

Make sure you review your online security practices to keep your online banking information safe. Here are some security tips to give you more protection from identity theft and scams.

• Use strong passwords and update them regularly
• Use unique passwords, two-factor authentication, and a password manager to increase cybersecurity protection
• Never give out your Social Security number or personal information over the phone or email after a solicited call or message
• Turn on credit card notifications to get alerts about credit card use
• Use a virtual private network (VPN) for a secure internet connection and to cover your IP address
• Before you click on pop-ups or text message links, look for phishing or malware scams
• Make sure the website has HTTPS to show it is secure for entering financial information
• Don’t always trust the phone number you see on your mobile device, as scammers can fake caller ID

Every year, millions of Americans shop online without any problems. However, the best way to protect your transactions is by keeping a careful eye on your monthly statement and knowing your rights as an online consumer.

If you have a complaint, report it to the Federal Trade Commission (FTC). If you’re the victim of cybercriminals, contact a consumer protection lawyer to understand your rights.