What happened to Oprah Winfrey can happen to you.
A New York busboy was arrested in March for using public library computers to hack into the brokerage accounts and credit card information of media mogul Oprah Winfrey and financiers George Soros and Warren Buffett. Many con artists stalk cyberspace preying on the famous and the anonymous, and are taking a bite out of the multi-billion online shopping marketplace.
This has caused a wave of Internet fraud fear, and created a cottage industry for more secure Internet payment systems. Privately held companies Orbiscom and Cyota are the latest companies to cash in on this trend, with new software that masks consumers' credit card numbers.
Both companies, based in New York, issue cardholders disposable and unique numbers for each online purchase so they do not have to give out their account number on the Web. Orbiscom and Cyota are within weeks of signing agreements with several of the top 10 credit card issuers, executives told Reuters.
"If we can completely eliminate your fear that your wallet would be lifted as you walk down the street your willingness to shop more frequently and in larger amounts might increases," said Scott Moss, Cyota's executive vice president.
In other words, comfortable customers who aren't afraid of online fraud usually spend more money. Fear of fraud
Credit card network Visa USA, which said its cards are used in just over half of all transactions on the Web, said out that fraud rates are between 25 and 30 cents per every US$100 spent online. In contrast, overall fraud was about 7 cents per US$100 in 2000. Issuers are striking back.
MBNA and Discover Financial Services, a unit of Morgan Stanley Dean Witter, have already unveiled Orbiscom-licensed technology that protects consumers' credit card numbers while the shop online.
American Express, which had about 33.3 million cards in use at the end of 2000, already has its own similar system. In late May, software giant Microsoft, announced agreements with Orbiscom and Cyota, and will probably use their short-lived card number technology in versions of its Internet Explorer.
Visa is also unveiling user identification and authentication systems that protect consumers against fraud by means of user names and passwords. Cyota last week said it had signed an agreement with the company to be one of the vendors supporting Visa's Payer Authentication Service.
So while online fraud gives issuers and consumers a headache, it has been a bonus for companies creating protective online technology.
"All these plans and beliefs we had are beginning to bear fruit," said Ray Sheridan, chief operating officer of Orbiscom said. "This has been a great few months for us."
