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with a company you are completely unfamiliar with, or one that does not appear to have a good reputation, shop online with companies that have a known reputation for being trustworthy. You can do this by checking the site out with the Online Better Business Bureau (www.bbbonline.org) or NetCheck (www.netcheck.com). In addition, most online auction sites keep feedback ratings on sellers. If the seller has a low rating, you might try shopping elsewhere.

TIP #4 - DON'T PUT IT IN AN EMAIL

One of the most popular scams on the Internet today is called "Phishing". This is where you receive an email which appears to come from your local neighborhood bank or even from trusted sites such as PayPal, asking you to enter personal and account information in order to keep your account secure. DO NOT, under any circumstances, fall for this. Banks and other online financial institutions such as PayPal will not request your personal account information via email. In addition, never send your info using email. This is a recipe for disaster, as your email may be intercepted and your information used against you.

TIP #5 - READ THE FINE PRINT

Before beginning a transaction with any online merchant, be sure to read their refund, return, shipping and privacy policies and know what you are getting into beforehand. No reputable site will store your credit card information for any amount of time. Before you send your information to them by any method, be sure that they will safely and securely destroy your information when the transaction is complete.

TIP #6 - ASK FOR REFERENCES

Reputable online merchants will not have any problem supplying you with references prior to making a transaction. Many sites now post that information, or at least a list of known clients, right on their websites. If a merchant cannot furnish at least three references, go somewhere that will.

TIP #7 - USE THE PRO'S

When making a purchase online, particularly for an Internet auction, use a payment gateway such as PayPal. They are professionals in the online security industry, and offer multiple methods of protecting the consumer. In addition to a worldwide security team of over 2,000 professionals monitoring transaction 24/7, PayPal also offers various buyer protection systems, such as seller verification purchase protection programs. Because their business depends on the security of your money and their strong attention to detail, PayPal has become the leading provider of payment gateway services. Staying away from wire transfer services, such as Western Union, is highly recommended where online transactions are concerned. Western Union has certainly worked hard to establish a good reputation in the real world, but have not been so attentive to online transactions.

TIP #8 - BEWARE OF FOREIGN TRANSACTIONS

According to a recent survey, 69% of International merchants report damage to their reputation by credit card fraud and identity theft, compared to 40% of U.S. businesses. This is not to say that foreign transactions are not safe. Just be extra careful, and be sure to follow the tips above. Many of the current phishing and sweepstakes scams have been found to be originating in countries like Nigeria. As a result, foreign transactions have become synonymous with fraud.

As Internet usage and online shopping continues to grow, it is increasingly important to be aware of what is happening with your personal information online. Being cautious about your online transactions will go a long way in keeping your payments safe.

Learn more about this author, David Ware.
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