As use of the Internet expands, more consumers engage in a wide variety of online commercial activities including purchasing goods and services from online retailers, paying bills, conducting online banking and other financial transactions, or communicating with various businesses to obtain or provide information. Before participating in these activities, there are some common sense precautions that will help you to protect yourself against the potential risks of online fraud. For example: create strong passwords, and use updated firewall, anti-virus and anti-spyware software on your computer.

Additionally, do not provide financial information, Social Security numbers, or credit card information to recipients through email communications as email is not a secure method by which to transmit this type of information. Finally, is you are using a computer in a library or other place where there is widespread public use, be aware that it is more likely to contain malware that may capture or keep track of any personal information you enter onto websites while using it.

Shop at Trusted Online Retailers

When you buy products or services from a local store, you are likely doing business with in individual or company that you trust or are familiar with. Exercise the same degree of care when making purchases from online retailers. If you have never heard of the company and do not know the company's reputation, find out the company's physical address and check with the Better Business Bureau in the area where the company is located. If you cannot obtain verification that the company is a legitimate business, you may want to decline to do business with it. If you are inclined to do business with the company anyway, be sure that the website provides a real world address and telephone number so that you can contact the company directly if you need to.

Delivery and Return Policies

When calculating the total cost of your purchase, you should determine the amount of the shipping and handling charges that may apply to your transaction. If you are located in another state or country, there may additional costs or taxes that apply to your transaction. Before you go forward with your purchase, ask a series of questions. Does the website tell you when you should expect the product to be delivered, whether and how returns can be made if you are not satisfied with it, and how you can contact the merchant in case of problems? If the website does not provide information about delivery dates and returns, you may want to rethink doing business with the merchant.

Some merchants also set a deadline as to how long they will accept returns while other may charge a fee to accept returned merchandise. You should also be aware that some websites will not permit you to make returns at retail locations, while others do.

Write down the company's mailing address and telephone number in case you need to contact it in the future, print out a copy of your order, and review and print out the return, refund, and cancellation polices.

Secure Sites

When you are prompted to enter your payment information, look for the following: a Web address beginning with "https;" a padlock in the status bar at the bottom of the webpage; or the words "Secure Sockets Layer (SSl)." Thesesigns indicate that you are using a secure site that allows only you and the merchant to see the payment information you are providing online. If you see these symbols, your credit card number should be secure. Note, though, that encryption is not foolproof.

Protect Personal Information

When providing payment information, a company should require only the personal information necessary to complete the transaction. You will most likely need to enter name, address, telephone number and credit card information. If the business asks you for other personal information such as Social Security number or bank account number, consider that suspect and use extreme caution.

When making payment online, the method of payment that gives you the greatest consumer protections is payment with a credit card. Because federal law protects consumers from fraudulent use of credit cards, using a credit card is the safest method of payment. If your credit card has been used for purchases you did not authorize, you are only responsible for up to $50. However, there are some limitations, including when you use your credit cards with companies that are outside of the U.S. As with all credit card purchases, it is important to regularly review your monthly statements and immediately report any unauthorized charges to the merchant and your credit card company.

If you do choose to provide your credit card number to the merchant website to purchase your product or service, print out a record of the purchase. Most merchant websites permit you to do so, and this record will be helpful if problems arise.

If a vendor or online seller asks you to wire funds via Western Union or other money wiring service, you should avoid doing so. Likewise, if you are conducting an online transaction, be aware that fake cashier checks and money orders are common and, although your bank may cash them and tell you the check has cleared, you may be held responsible if the check or money order is discovered to be a fake.

In addition, avoid the use of "one-click shopping" or the "remember password and username" option. Although some websites and browsers offer this option as a convenience to you, anyone who uses your computer will have the ability to gain access to your account or use your payment information.

Online Auctions

As with any online purchase, a consumer bidding in an Internet auction should know exactly who it is they are doing business with. You should keep in mind that the auction site, in most situations, is merely bringing together the buyer and seller. As a result, the same retail protections for other merchant sites do not apply against the auction site. Be sure, though, that you check out the site's consumer protection policies, because many do offer insurance and other protections to help if you are the victim of fraud.

If you have been successful in a bid, make direct contact with the seller and try not to use just email. Find a working telephone number or verifiable street address. It is also a good idea to pay for your purchases with a credit card so that you have another option for disputing fraudulent charges. If it is a substantial purchase, you may want to consider doing business with a reputable escrow company that will hold your funds until you have received the item.

Finally, it is important that you always buy within the auction. You should be wary of individuals who offer to sell you items after the auction if you were not the winning bidder. These kinds of scams occur repeatedly and those purchases are not covered by the consumer protections provided by the auction site.