Although MasterCard, which says 14 million of its cardholders were exposed to the crime, has tried to calm the waters by saying only 63,000 consumers lost vital information the news culminates what has been a never-ending string of horror stories involving consumers and Internet security.
In fact, in a recent survey by the Cyber Security Industry Alliance 71% of consumers said they believe new laws need to be passed to protect them from corporate irresponsibility and identity theft. Considering that Internet commerce continues to grow at breakneck speed — consumers online in 2004 spent $300 billion, this is an issue that must be addressed by businesses and regulators.
In the meantime consumers must take steps to protect themselves.
Most Internet scams begin with e-mails to your inbox. There are numerous products available to limit the amount of unwanted e-mails. However, fraudulent e-mails have become more sophisticated and at times are very intriguing. Currently the fastest growing technique to gain access to your personal information including credit card numbers, social security numbers, passwords and household data is through phishing. In phishing, spoofed e-mails are designed to lead consumers (or the fish) to fake, but very real looking, websites. At these websites consumers are urged to update financial information along with other information that could be used in identity theft.
There are other ways scammers use the Internet to separate you from your money, including variations of the so-called Nigerian Scheme, where you are contact by someone looking to give you large sums of money.
Here are the dos and don'ts when it comes to protecting yourself from Internet scams:
• Do not follow incoming e-mails to financial websites. If you aren’t sure, call your financial professional or enter their website by entering the correct address directly into your browser and not through links from e-mails.
• Do check your credit card and bank statements frequently — don’t wait for the monthly bill.
• If there are discrepancies or questions, don’t hesitate to contact the appropriate officials at the financial institution as well as the authorities (the FBI and National White Collar Crime Center have established the Internet Crime Complaint Center to monitor and provide victim assistance).
• Do consider using a virtual account number that provides substitute credit card numbers in place of your actual credit card number. Pioneered by CitiBank, this service is being offered by more and more credit card issuers.
• Don’t succumb to greed. If it seems too good to be true, then delete the e-mail.
• Check alternative sources to verify claims. Never use your credit card or divulge financial information to strangers until you’ve done adequate due diligence.
Millions of fraudulent e-mails are sent out into the world each day. Sooner or later you will be targeted. By staying vigilant and using common sense along with the tips outlined above you will greatly reduce your chances of becoming a victim.
This weekend our Business Block has much more on identity theft. Tune in Saturday 10am - noon ET.
Charles Payne is the founder and CEO of www.wstreet.com and appears regularly on FNC's Cost of Freedom Business Block.
Charles Payne is the host of Making Money with Charles Payne (weekdays 6-7 PM/ET).