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Use the American Express card to avoid online theft

Credit card theft is a big concern in the e-commerce world. But as John McCormick explains, American Express has come up with a way to keep your card number secure.


In my Locksmith column today, I look at the problems facing Egghead.com customers and its recent credit card fiasco. The article includes suggestions about how you can greatly reduce the cost of dealing with possible card theft.

My focus here is on another alternative for protecting you or your company’s employees from online credit card theft: Simply give employees who have purchase authority an American Express Card, and you will never need to worry about crackers stealing credit card numbers again.

The new American Express Private Payment system works by establishing a unique, one-time-use number for every online purchase you make. American Express will authorize that number as legitimate for a single transaction. You can do this by registering your regular American Express or Optima card with American Express online. Keep in mind, this system means you are unable to use those convenient quick purchase systems that have your credit card number stored from an earlier transaction. However, corporate purchases should not be handled by those quick purchase systems anyway, since any employee could place charges without knowledge of your full credit card number.

The American Express Private Payment system is an attractive solution for protecting your credit card information. However, there are some cases where American Express recommends against using this feature, including:
  • Instances when you will be required to present your actual plastic American Express Card to receive your purchase, such as some airlines require. You should check each merchant’s policy carefully before you purchase.
  • Recurring charges that are automatically charged to your credit card, such as your Internet service provider, phone, or utility bills.
  • Orders placed over a month in advance, including back-ordered items and hotel reservations.

In these instances, it’s a good idea to have a few low-credit-limit cards that accounting can hand out to employees for emergency purchases. This applies not only to online purchases but also to every credit card purchase. Cards carrying credit limits of $500 or less can be given to virtually anyone in the company. Typically, an employee's paycheck will cover any fraudulent charges he or she might make. Discuss this possibility with your bank or other credit card issuer to protect your company from online credit card fraud.
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