Fear of fraud deters most Europeans from buying online 

Consumers - Credit cards are not designed to stop web theft

Security concerns are holding back e-commerce - especially in Europe, which is regarded as being less net-savvy than the US. 

According to a Forrester research report last week, only 4% of internet users in France, Germany, Sweden, the Netherlands and Britain have bought anything online, and 40% of users say they do not intend to buy anything online in the next six months. 

Consumers imagine anonymous computer geeks stealing personal information and credit card details as they travel across the internet, or cracking website defences and extracting them directly from the web trader's computers. 

Last year PriceWaterhouseCoopers said fraudulent e-commerce transactions made up half the annual fraud total in the US. 

Fears centre on credit cards, the main method of payment online. In face-to-face transactions, signatures and the card's magnetic strip and hologram act as protection against fraud. Online, a hacker only needs the card's number - and take a guess at its expiry date - to make purchases. 

Anthony Abraham, of the Canadian-based watchdog Fraud Watch, says: "The credit card has always been meant to be used in person, where a person can actually go to a store, which can ensure that his signature is the one on the back of the card." 

Fraudsters use credit cards anonymously, often to buy "virtual" goods like software and pornography which can be downloaded rather than posted to a real address. They don't even need to steal a credit card, or the number: programs on the internet will randomly generate working credit card numbers. 

The most likely remedy will be the smartcard, a credit card with an embedded microchip, which can be inserted in the side of a computer or mobile phone before an e-commerce transaction. That will, at least, confirm the purchaser physically has the card. 

Until smartcards become widely available, use only UK-based websites which have a "real world" address (not a PO box) and have encrypted connections. And pay by credit card: you will be liable for only the first £50, at most, of any fraudulent transaction. 

The Guardian Thursday February 10, 2000