Many people today may be aware of the fact that there are risks involved in making purchases online but unfortunately, they may not be as educated on the types of precautions that companies take to protect their customers against these risks. Without being informed on how they are protected, people will continue to be leery of making purchases online. Some of the risks involved in purchasing products and services online include: information theft, identify theft, and credit card fraud.
Information theft occurs when someone’s personal information is obtained through unlawful activities (Cashman, Shelly, & Vermaat, 2004, p. 360). Stealing confidential information is another form of information theft. Identify theft is another risk involved in making purchases online. When someone uses another person’s confidential and personal information to impersonate them, this is known as identity theft (Identity Theft, 2005). The impersonator may use their false identity to obtain credit cards, property, or other items of which the person with the true identity becomes liable. When a person uses stolen credit card information, this is known as credit card fraud (Credit Card Fraud, 2005).
To guard against information theft, many Internet companies employ the use of data encryption (Cashman et al., 2004, p. 361). When data is encrypted, it is converted into an unreadable format and must be decrypted before it can be read or understood. To encrypt data, an encryption key is used which is similar to a password. The encryption key must be provided to decrypt the data before it can be read (Cashman et al., 2004, p. 361). When information is transmitted over the Internet, it becomes extremely vulnerable to security risks (Cashman et al., 2004, p. 363). Most browsers are capable of using encryption to help secure data transmission. A website that uses encryption to secure data while being transmitted is known as a secure site (Cashman et al., 2004, p. 364). Some sites use digital certificates to validate the authenticity of a user or website. Occasionally websites will use SET encryption to secure financial transactions. SET is the Secure Electronics Transactions specification (Cashman et al., 2004, p. 364).
It is common for companies to collect information about their customers; however this can become a privacy concern. To ensure that customers are aware of how an organization protects their privacy, many Internet companies provide an online privacy policy which explains the type of information collected by the customer as well as how their information is used (Cashman et al., 2004, p. 367). It is recommended for customers to read a company’s privacy policy before purchasing their products or services online.
References:
Cashman, T.J., Shelly, G.B, & Vermaat, M. E. (2004). Discovering Computers: Fundamentals editions. Boston: Course Technology
Identity Theft (2005). Retrieved December 13, 2005 from http://searchsecurity.techtarget.com/sDefinition/0,,sid14_gci801871,00.html
Credit Card Fraud. (2005). Retrieved December 13, 2005 from http://retailindustry.about.com/od/lp/g/credit_fraud.htm
Nearly all businesses today have some sort of presence on the Internet. Even if the only information they have available on their website is a phone number and address, most companies have something on the Internet with their name on it (Cashman, Shelly, & Vermaat, 2004, p. 58). Many of these companies even offer their products or services for purchase through their websites. This type of business is called e-commerce (Cashman et al., 2004, p. 62). E-commerce is a type of business transaction that takes places over a secure internet connection (Cashman et al., 2004, p. 63). Typically, the customer selects the items they would like to purchase and then places them into an online shopping cart (Cashman et al., 2004, p. 63). They then provide a username and password, along with their payment method and billing information (Cashman et al., 2004, p. 356). This information is usually encrypted as it is sent over the Internet (Cashman et al., 2004, p. 361). Almost all businesses that accept online payments offer these types of secure transactions (Cashman et al., 2004, p. 364).
Data encryption and secure transactions are used to protect customers and their privacy (Cashman et al., 2004, p. 367). As a result of things like identity theft and consumer fraud, customers are becoming more concerned about their privacy when doing business online. Any company that offers their products or services for purchase online should be aware of how to take the necessary precautions to protect their customer’s privacy. Using encryption and secured transactions will allow the company to provide their customers with protection against identity theft and consumer fraud (Federal Trade Commission, 2005).
Some of the other concerns a company might have when they choose to do business online include data storage and integrity as well as system installation and maintenance. If the company chooses to host their website in-house, they will have to set up a system that will be used for online transactions. This system will be vulnerable to various types of security breaches. Some security concerns include attacks by hackers and crackers (Cashman et al., 2004, p. 354). They will also need to protect themselves and their customers against system failure and data loss (Cashman et al., 2004, p. 361). However, if the company were to outsource the system, they will likely have to be less concerned with these areas as the company that hosts the website will be responsible for system availability and maintenance.
References:
Cashman, T.J., Shelly, G.B, & Vermaat, M. E. (2004). Discovering Computers: Fundamentals editions. Boston: Course Technology
Federal Trade Commission (2005). Retrieved December 8, 2005 from http://www.consumer.gov/idtheft/con_minimize.htm
