Avoiding Online Fraud Takes a Few Good Strategies and Common Sense

Chances are you're spending more time online these days. And why not? The convenience of online shopping, banking, and travel planning, plus instant access to the news and information, makes the Internet nearly irresistible. And keeping in touch with friends and family is a snap with the e-mail, instant messaging, and voice and video options online.

Even the government is getting into the act, offering online options for services such as passport application, driver's license renewal, and Medicare enrollment. Government agencies at all levels-federal, state, and local-are creating accessible Web sites that make it easier for people with physical impairments, such as vision or dexterity difficulties, to get useful information about programs and topics ranging from health care to energy efficiency to home repair.

The Risks of Online Fraud are Growing

Unfortunately, criminals and con artists are spending more time online, too. Phishing scams, which use fraudulent e-mail and fake Web sites to trick people into revealing personal information that criminals can use to perpetrate identity theft, are at an all-time high according to the Anti-Phishing Working Group, an industry association that tracks phishing attacks and works to eliminate online fraud and identity theft.

While research shows that people in their 50s, 60s, and beyond fall victim to identity theft less often than younger adults, a study by AARP found that they are also less likely to change their online behavior or take other precautions to lower their vulnerability. As the risks of online fraud grow, it is important for all Internet users to learn how they can help protect themselves from online fraud.

How to Avoid Online Fraud

Here are a few simple steps you can take to help protect yourself from identity theft and other types of online fraud:

• Don't take the bait. If you receive e-mail asking you to provide or update your personal information, such as your bank account, credit card, or Social Security numbers, ignore it — even if the message appears to come from a legitimate source. Chances are good that the e-mail is part of a phishing scam designed to steal your identity.
• Use only secure and trusted Web sites. When shopping or conducting other business online, check for "https" (the "S" stands for "secure") at the beginning of the address for any site where you plan to enter financial or personal information. Another way to tell if you are connected to a secure site is to look for a security icon, such as a padlock or an unbroken key at the bottom of your Web browser or near the address bar.
• Avoid wireless transactions. If you have a wireless laptop computer, avoid making financial transactions over an unsecured wireless network, such as those offered by many cafes and coffee shops. A thief with a wireless connection might be able to pick up some of your information, even if he is in another room or building.
• When in public, stay private. Never use public computers, such as those in libraries or Internet cafes, for online purchases or banking. Stick to e-mail or general Web surfing on those computers. You don't want people looking over your shoulder-either literally or electronically. And since you can't know what software has been installed on a public computer, why take the risk?
• Use credit, not debit cards online. When you're shopping online, always use a credit card rather than a debit card. If your identity is stolen and someone starts running up a big tab on your credit card, federal law limits your liability to $50. The credit card company is motivated to help you, their customer, resolve the problem. If thieves get your debit card information, they can empty your bank account before you are aware there is a problem.
• Use a phishing filter and other technology. A phishing filter-like the one in Internet Explorer 7 and the Windows Live Toolbar-can help to protect you from online fraud by alerting you when you log on to a confirmed or suspected phishing site. Other technology can also help reduce your risks of online fraud. Spam filters help to limit the amount of unwanted e-mail you receive. Anti-spyware software can detect and delete spyware that is designed to covertly gather and transmit your personal information. And a firewall can make your computer invisible to online criminals, and prevent spyware from sending your personal information across the Internet.
• Trust your instincts. If something doesn't feel right, despite your precautions, don't be afraid to just say "no" and move on to another site or company that you trust.

What If Online Fraud Happens to You?

If you suspect you are the victim of identity theft or another type of online fraud, take immediate action to limit the damage. Contact your credit card company, your bank, all three credit reporting agencies, and your local police. Close any fraudulent accounts that may have been opened in your name. Change the passwords for all your online accounts. And be sure to keep a detailed record of all actions you've taken in case more follow-up is needed.