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Why Shopping for the Lowest Price Can Lead to Ruin

Posted on Sep 28, 2006 by Tom Fragala

Brian Krebs put together a super article on his Security Fix WaPo blog. It goes deeper and in more nuanced directions than most fluff identity theft pieces. These are a few points that jumped out at me.

1. Having your credit card information stolen from an e-tailer's web site is only part of the risk from this kind of breach. Sure, your liability is limited with credit card fraud. But don't poo-poo it: the hackers could also get your name, address and phone number from the same database. Then, possibly using YOUR stolen credit card, purchase an entire background check on you, potentially getting your social security number. Then, they sell this data to criminals who use this additional information to make a broader theft of your identity.

2. I have written about this many times. It is ALWAYS safer to buy online with a credit card and NOT a debit card. If your debit card is stolen, all fraudulent transactions are done using YOUR money and are debited from your bank account. And, even though your debit card probably has a Visa/Mastercard logo, its use is governed under different federal law than credit cards.

3. This one wasn't in the article per se, and is my opinion. The reputation and people behind an internet retailer is more important than price. It is probably a reasonable policy to not always shop for the lowest price (I suppose this applies offline too, come to think of it). Why? Well, sure, ANY website can be hacked. But your data may be safer at a place like Amazon than a new, no-name, small outfit that doesn't have a full time security engineer. To be fair, that's a broad assumption--after all, it's possible for small companies to totally outsource their online payments to a third party like Yahoo or Paypal. Just be on the lookout.