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Online fraud concerns subdued by prepaid cards

27 May 2011 - 10:32 by Sarah Collinson

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People who are worried about whether or not they will have their credit card details stolen when using e-commerce sites, might be better off choosing a prepaid card to buy goods online, according to experts.

The recent hack of Sony's PlayStation Network and other key services, which saw card details stolen and hundreds of millions affected, has reignited the debate over whether it is safer to use traditional methods of online payment or stick with cards which can be topped up with a limited amount of cash, keeping your main account safe from exploitation.

At the moment if you carry out safe shopping online at a major e-commerce site you can expect to encounter various security checks to verify that you are legitimately using your credit card. However, recent events have shown that even trusted companies can lose customer details, which could open up users to fraud.

In a report for the Daily Telegraph it was journalist Kara Gammell who most recently suggested that people could switch to prepaid cards, which do not have any direct link to an account or credit allocation.

There are many different prepaid cards available, with some allowing you to top up by a maximum of £5,000 and then spend that cash via safe shopping online as you see fit. If your card details are somehow compromised in the process then any cybercriminal who gets hold of them will only be able to take a fixed sum and will not be able to have extensive access to your main account.

Most prepaid cards have a user protection scheme in place where money illicitly taken will be refunded, but it is worth bearing in mind that there may be a fee to pay for using such a service and single payments may also be subject to charges.