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HOLIDAY SHOPPING 2006

A season of hustle, bustle for cyber cons

November 27, 2006|Chris Gaither | Times Staff Writer

SAN FRANCISCO — The hunt is on. As more shoppers scour the Internet for holiday deals, they're also being stalked -- by scammers.

Today is Cyber Monday, the kickoff to the busiest online shopping period of the year. E-commerce is expected to hit a record this year, as Web-savvy shoppers and newbies alike hand over more of their holiday budgets to online retailers.

Online shoppers spent $79 billion through the first nine months of the year, up 23% from the same period last year, according to the Commerce Department's Census Bureau. Lazard Capital Markets, an investment bank, predicted in a recent report that the trend would continue through the holiday season.

But where there are shoppers, fraudsters will follow.

Computer security experts said they expected a seasonal uptick in the usual Internet scams and annoyances, such as fake items auctioned online, unsolicited commercial e-mail and so-called phishing attacks, in which e-mailings try to trick recipients into disclosing personal and financial information.

One in 10 adults say they have fallen victim to online fraud, according to Harris Interactive, which conducted the survey on behalf of Symantec Corp. in October.

"Those who have been shopping online have gained experience and are more comfortable, which is why we're continuing to see it grow," said Steve Salter, a vice president at BBBOnLine, the online arm of the Council of Better Business Bureaus in Arlington, Va. "But there are always new people coming on for whom these scams are new as well."

Three-quarters of the 80 million Internet-connected households in the United States have shopped online, according to Forrester Research Inc. But concerns about fraud may be stunting the industry's growth: 21% of consumers surveyed in November by research firm InsightExpress on behalf of BuySafe Inc., an e-commerce security company, listed "too much risk of fraud, I don't trust online merchants" as the primary reason when they don't shop online. "I prefer to see merchandise in person" ranked first, with 51%.

Salter said shoppers might also let down their guards during the holiday season, when they have lots of presents to buy and are looking for deals.

The pressure is especially heavy when it comes to hot, hard-to-find items, such as Sony Corp.'s PlayStation 3 and Nintendo Co.'s Wii game consoles.

Last year, EBay Inc.'s auction site was crawling with video game enthusiasts -- and their parents -- trying to get their hands on an Xbox 360. That attracted a host of Internet speculators and scam artists.

EBay saw a flurry of sellers listing Xbox 360 machines who didn't actually own them and were unable to complete the sale, as well as a rise in fraudulent Xbox listings, such as auctions that seemed to be for one of the game consoles but were actually for an Xbox photograph or an empty box.

"This sort of thing happens whenever there's a difference between the price of an item in a store and the price someone is willing to pay for it," said Robert Chesnut, senior vice president of trust and safety for EBay and its PayPal payment unit. "It's simple capitalism: supply and demand."

So EBay began demanding that all Xbox 360 sellers show proof that they owned one, or the listing would be taken down. The online auction site is taking the same precautions with PlayStation 3 and Wii consoles, plus it tacked on additional seller requirements during the period before the consoles hit stores.

Symantec, which makes computer security software, has already seen malicious spammers start to change their tactics, with the usual "sale" offers becoming "holiday sale" pitches.

"Your bread and butter of spam are getting repainted for Christmas," said Ross Fubini, a senior director of engineering at the Cupertino, Calif.-based company. "Just as sure as the after-Thanksgiving Day sales are stepping up, we're seeing spammers tuning their attacks to the season."

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chris.gaither@latimes.com

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Safe-shopping tips

* Never pay cash. Credit card charges are protected by the Fair Credit Billing Act, which allows consumers to dispute charges under certain circumstances, according to a holiday online shopping guide on the Federal Trade Commission's website. Most credit card companies don't hold customers responsible for unauthorized charges made on the Internet.

* Do your research. See whether the merchant is listed in BBBOnLine's database of trusted sellers. Check the merchant's site for a mailing address, phone number, refund policy and customer-privacy policy. "They're not fail-safes, but they're bricks in the wall to help build confidence," said Steve Salter, a vice president at BBBOnLine.

* Trust your instincts. "Price is a very useful proxy for whether you're dealing with a legitimate product or not," said Neil MacBride, vice president of legal affairs at the Business Software Alliance, which found more than 75,000 online auctions of pirated or fake software last year. "If it sounds too good to be true, it probably is."

* Don't e-mail financial information or respond to e-mails asking for financial information. In an effort to get you to give up personal information, fraudsters often send e-mails purporting to be from PayPal or a bank or purporting to be receipts for purchases you didn't make. Ignore them or report them to your Internet service provider.

* Keep a paper trail. Retain printouts of the product listing, the online receipt and any e-mails exchanged with the seller.

* Don't shop while using wireless networks that aren't encrypted or protected by passwords. Hackers can exploit the lack of security and steal your financial information.

* Protect your computer with up-to-date antivirus software and a firewall. Even the most vigilant computer users can fall victim to viruses, which could slow your PC, destroy your data or turn your computer into a spam-sending machine.

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Sources: Federal Trade Commission, Council of Better Business Bureaus, Symantec Corp., Business Software Alliance

Los Angeles Times

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