Perishable credit card numbers take the fear out
of Web shopping
Outsmart online thieves with virtual
credit card numbers.
Several major credit card issuers, including
Citibank, are offering customers the option of shopping online with
virtual, single-use credit card numbers, which expire within one
or two months.
The aim? To thwart hackers by using a different, random card number
every time you shop online. A virtual number is only good on the
Web site where you made your purchase.
"There's no value to the number to any hacker," says
Amy Radin, director of e-business for Citi Cards, "because
they can't take it anywhere else on the Web."
An online purchase made with a virtual card number shows up on
a customer's card bill just like any other purchase. Some issuers
even list the virtual card number next to the charge.
Issuers hope virtual, throwaway credit card numbers will encourage
more consumers to shop the Web. The No. 1 reason folks have shied
away from online shopping is the fear that their personal information,
including credit card numbers, could fall into the hands of thieves.
"We've seen some big companies have breaches," says Allan
Trosclair, executive director of the Coalition for the Prevention
of Economic Crime.
"It's a worrisome thing for consumers."
And those fears are justified.
"There has been a lot of fraud on the Internet," says
Avivah Litan, vice president and research director at GartnerG2.
"Seven percent of online consumers surveyed in September 2002
were victims of credit card fraud."
And it's not so much the damage to their wallets that worries folks
about online shopping -- card issuers promise zero liability for
any unauthorized online purchases -- but the potential damage to
their good names.
Swiping a credit card number and other personal information may
be all an online thief needs to steal your identity. And sorting
out the mess a thief makes of your credit report falls squarely
on a consumer's shoulders. One percent of online consumers were
victims of identity theft in 2002, according to the GartnerG2 survey.
"The anonymity of the Internet works in favor of the crook,"
Trosclair says. "The speed of the Internet works in favor of
When virtual credit card numbers aren't
Making online purchases with a single-use card number gives you
an added layer of protection. But there are also plenty of instances
when paying with a virtual card number wouldn't be a good idea.
You can't pick up theater tickets with a virtual credit card. And
you can't confirm airline, hotel or rental car reservations with
a credit card number that doesn't exist off the Web.
Paying recurring expenses, such as monthly phone or cable bills,
with a credit card number that expires every few weeks would be
a hassle. Pre-ordering unreleased books, compact discs, videos and
DVDs off the Web is out as well. The reason? Your virtual card number
could expire before the merchandise is available for purchase.
Discover takes a different tack with its single-use credit card
program. The expiration date on its randomly generated card numbers
match the expiration date on the customer's actual Discover Card.
You could use a single-use card number from Discover to pay monthly
bills or pre-order merchandise without any trouble.
A virtual card number from Discover can only be used at a single
online merchant, but you don't have the added peace of mind of knowing
that after a few weeks your virtual credit card number will expire.
"It's not really a security benefit," Litan says. "It's
Common sense fraud-avoidance tips
With or without a virtual credit card number, you can take steps
to minimize online fraud by using some old fashioned common sense
The same thing goes for your card issuer. Know how your personal
information will be handled.
Make sure your transactions are handled through a secure or encrypted
mode. Most merchants use SSL, the secure socket layer protocol.
You will know you're on a secure site if the Web page on which you
conduct your transaction begins with "https:" instead
of the usual "http:".
Print out privacy policies, warranties, price guarantees and other
If you're shopping with a merchant for the first time, look for
the Trust-e symbol or a Better Business Bureau online seal, which
indicate the seller has been independently audited and deemed trustworthy.
Monitor your credit card account frequently. Keep records of all
online transactions. If you find a suspicious transaction on your
bill, contact your credit card company immediately.
Steer clear of spam e-mail offers.
"Don't even respond," Litan says. "Delete them."
Buy a shredder and destroy bills, pre-approved
credit offers and other documents with personal information before
throwing them out. Not all identity thieves are high-tech hackers.
Some use low-tech methods, such as dumpster diving, to swipe personal