General Business News for February 2000

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Consumer Safety - Shopping On-line
By the end of the year 2000, research predicts that more than $400 billion will be spent in e-commerce. By 2001, the predictions are as high as $953 billion and 2003 could reach $3.95 trillion. This growth will cause fundamental changes to the way we do business. More and more people shop on-line and they want to know about "consumer safety and liability".

How many credit card numbers are floating around out in cyberspace? How about the financial investments made on line. Is your money secure? If you are worried about your Visa or MasterCard, don't even think about your IRAs, CDs and mutual funds? What about your banking information? The real truth is nothing is secure. The reason you are probably safe is that it almost always costs more to gain access to your information than your information is worth. If it costs $75,000 to steal $10,000, nobody would bother.

You hand your credit card to a waiter that could spend his free time selling credit card numbers. You give your credit card number to merchants on the phone to deliver your goods to you at home. Why do people feel safe doing this but are so worried about data thieves online? The best advice I can give you is to go to the trouble to make sure you are shopping on "safe" sites. Before you send your credit card number into cyberspace, check to see if the URL line on the Web browser starts with "https" and not just "http," or ends with "shtml." This means that your credit card (or other personal information) is being scrambled or encrypted.

How data encryption works

Almost all Internet commerce is protected by cryptographic software that was first introduced in the 1970's. This software scrambles messages between two parties and only permits the intended party receiving the data to unscramble the data. The size of prime numbers that are used to generated both the encoding and decoding keys tells you how safe the site is. Most codes use at least 512 bit numbers. This is enough "bits" for most but the real paranoid sites are beginning to use up to 1,024 bits. The more bits, the longer to encrypt and decrypt but it is more secure.

For years, tests have been run to break or "crack" through encryption software. This is done by applying a mathematical test to the zillions of possible solutions until one is found that can decode the message or data. Last August, the 512 bit was cracked for the first time. A total of 292 computers running on and off for 7 months (which equals 35 years of total computing time) made history. This is important information because it was thought to take 50,000 years of computing to crack 512 bit. Some sites may turn to 2,048 bit and 4,096-bit encryption but again, these sites will be slower.

Just about everyone who has access to a computer and a credit card has ventured into the Web. Some sites such as have a "safe shopping guarantee" that makes buying from them worry free. They guarantee every transaction to be 100% safe and you are not liable for any unauthorized charges. You can go to their site and read their guarantee. They currently have 13 million customers and claim to use the best software available today for secure commerce transactions. They encrypt all your personal information, not just your credit card number. They go on to say they do not sell, rent or trade your personal information. They continue to say they may in the future but they do not mean your credit card number.

One more tip that deserves mentioning is beware of the "social engineer". This is a crook that wants your password, email address or personal information. He might be the guy in the next cubical. He might be the person who empties your wastebasket at night. He might be the person who shows up at your office who says he is a customer service representative. Social engineering is sadly more of a threat than all those computers out there working their hearts out to break some code.

Will all online shopping sites have to offer you a guarantee to get you to buy from them? Time will tell. The growing concern is not just safety but privacy, which is a whole different subject. Privacy of personal information has been rated more important to the consumer than what happens to their credit card in cyberspace. People don't like the idea of becoming transparent and that may be where the Web is sending us. As far as online consumer liability, the truth is the big bad guys really are not interested in your Visa with a $2,000 limit. That brings up a short-term solution. Have one credit card, with a low credit limit only for Internet shopping. This is one way to shop from home and the other is to watch your mail. More and more credit card companies are offering credit cards specifically for online shopping and ways to protect you. A credit card you currently have may offer something of the sort. Again, you can watch your browser as we mentioned above or shop with those such as Jeff Bezos, CEO of who would rather remain a billionaire and depends on you feeling secure buying from him.


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