Credit Cards and the Internet

It is interesting that people who are nervous about sending their credit card numbers over the Internet will gladly charge something in a store and sign their name on an electronic screen. (Think of the possibility for fraud: the store has your credit card number AND an electronic version of your signature! In principle, they could use these to create any number of fake transactions and charge them to your account.)

So is it safe to use your credit card to order merchandise over the Internet or not? Here is some information you may find useful.

Credit card risks

Sending your credit card number over the Internet exposes you to three types of risks.

Someone who is watching Internet traffic may see your account number as it goes by and use it to buy stuff for themselves.
You don't really know who you're sending your account number to.
Someone might break into our computer and steal your credit card number.

Let's look at each of these risks more closely.

Risk 1: Internet security

The first problem is eliminated by using what is called a "secure server." Before entering your credit card number, look for the little padlock symbol ( or ) on your web browser. This indicates that you're connected to a secure web site--your browser encrypts your account number (and everything else) before sending it, so even if someone is able to view Internet traffic, the account number is indecipherable.

If some crook really wanted to get credit card numbers, it would be much easier and more productive to just go to the local shopping mall and rummage around through the garbage for discarded receipts. The real danger of buying things with a credit card over the Internet is actually ...

Risk 2: Verifying authenticity

If you go to a store, you can be reasonably sure that the company is legitimate. The expense of the building, the inventory you can see and touch, the people working there, the fact that they were there last month and the year before; these are all indications that the company is for real. You feel comfortable handing your credit card to the clerk in the store because you expect that employees of a real company will behave ethically.

But suppose you get a catalog in the mail from some outfit you've never heard of. Can you really be sure that the company exists? You can call their 800 number (if they have one), but that doesn't prove anything--a rip-off artist will tell you exactly what you want to hear, whether or not it is the truth. The catalog itself is the only evidence you have that the company is legitimate, so sending your credit card number to a mail order firm involves more risk than shopping at a store.

Internet stores are even riskier than mail order companies. It is easy (and cheap) to set up an Internet site that offers goods for sale. Rip-off artists can create a web site that looks just as real, and offers just as many products, as legitimate businesses. Remember this: you can't tell whether the company is for real just by looking at their web site--everything you see might be made up.

Knowing this, why would anyone order anything over the Internet? The fact is that the vast majority of businesses are legitimate. Nevertheless, you can reduce the odds of being victimized by verifying the company independently before placing an order. Call the Better Business Bureau and the Attorney General of the state in which the business resides to see if anyone has complained about it. Asking the company itself for references may be interesting but doesn't prove anything--the "references" may be part of the scam.

So is KMR Consulting (and this web site) for real? The answer is yes, but you shouldn't believe it just because this web page says so. Verify it for yourself: call the Association of Shareware Professionals (Ed Pulliam, President 608-752-8985) or check out their web site, where you will find a link back to this site. Call the New York State Attorney General (800-771-7755). Call the Better Business Bureau in Buffalo NY (716-856-7180).

And if you're still nervous about placing an order with us, consider this: you already have the product! A huckster after an easy buck is going to offer a product that doesn't really exist, hoping you'll send money. With shareware companies, you know the product exists because you can download it and try it. This is pretty convincing evidence that the company is for real; much more convincing than seeing slick pictures of products in a catalog.

The bottom line is that every credit card transaction involves some trust: you have to trust that the person who receives your credit card number won't misuse it. This is true whether you do business over the Internet or in a shopping mall. The real risk of using your credit card over the Internet is that it is harder for you to determine whether or not the company is legitimate.

But the very nature of shareware is reassuring: you know the product exists and does what was advertised because you have tried it. This is pretty good evidence that the company is legitimate.

Risk 3: Our computer security

In January of 2000 someone broke into a computer at an on-line company and stole hundreds of thousands of credit card numbers. This made big news, partly because the crook tried to extort money from the credit card companies.

This cannot happen to KMR Consulting because we don't keep your credit card number online. All we keep is a paper copy of your receipt (just like every ordinary store does).

Of course, we keep our computers as secure as possible, but the real reason why your credit card number is safe with us is that our computers don't have what the crooks want to steal. We're just not vulnerable--it's as simple as that.

By the way, if you want to see whether your computer is vulnerable to Internet hackers, I highly recommend visiting Gibson Research Corporation's web site. Click the "Shields UP!" logo for a free analysis of your system.