Federal law protects credit card users against fraud online and off. To make consumers more comfortable shopping online, Visa USA, MasterCard International, and American Express have introduced zero-liability programs that waive all consumer liability in case of online fraud. In fact, consumers shouldn't fear shopping online with a credit card any more than they fear shopping with it over the phone, through a catalog, or at local stores. The fact is, there is not a documented incident of someone's credit card number or personal data being intercepted in transit during a transaction where encryption technology is used, says Allan Trosclair, executive director of the National Coalition for the Prevention of Economic Crime. To be sure, credit cards are the safest mechanism for shopping online, making up 93 percent of online payment transactions, according to the GartnerGroup.
Online merchants suffer the brunt of losses from disputed transactions, known as chargebacks.
When a charge is disputed, the signature makes all the difference. If it's there, the issuing bank eats fraudulent charges. But in transactions on the Internet, through the mail, or over the telephone, with no signature as proof, the merchant absorbs the cost. Regulations actually stipulate that you are supposed to get a copy of the card through an electronic swipe or imprint, and a signature. If you're a crook, there is total anonymity in the online world.