But wait: Visa reports that roughly 8 cents of every $100 spent online is lost to fraud more, if only slightly, than the 7 cents per $100 lost in the bricks-and-mortar world. So why shouldn't consumers be concerned? Answer: The perpetrators, by and large, are not hackers snatching credit-card numbers out of cyberspace. Typically, they tend to be the same old Dumpster divers and mail thieves they've always been, stealing card numbers off receipts and bills and then trying to pass as the cardholder. And if they succeed, who gets hurt? Not consumers. Federal law limits their liability to $50, and many card issuers don't even collect that. It's the merchants who take the hit standard bank practice when the cards are not present at the point of sale (when they are present, the loss is the bank's). Address verification and other screening programs can help merchants avoid bad sales. Yet these tools are not that widely used, notes Bill Brown, a director at VeriFone, a secure-payment-software maker. "To me, that says they're not losing that much." MORE >>
American consumers are braver than they used to be about e-commerce, and yet one out of five surveyed is still uncomfortable buying on the Web. So for all the scaredy-cats out there, here's a news flash: typing your credit-card number into landsend.com is just as safe if not safer than reading the number to a catalog's sales rep over the phone. If you really want to go out on a limb, hand your Visa to a waiter. "Consumer fears are overblown," says David Schatsky, e-commerce analyst at Jupiter Communications. "There's not a whole heck of a lot to worry about."