Consumer Economics Chapter 11 The Internet, Technology, and Identity Theft Copyright©2009 Taylor & Francis Group, an informa business

Learning Objectives Discuss the role of the Internet, technology, and technical disruption on consumption Explain the environmental impact of the Internet Define identity theft, biometrics, and privacy protection Describe how to do self-background checks Discuss the federal agencies involved in resolving identity theft List deceptions occurring online in regard to charitable giving

Introduction Emphasizes growing consumer and privacy issues Explores technical disruptions How consumers can protect themselves from identity theft

The Internet: Consumption Patterns Common complaints about online shopping Internet use is based on several factors Consumers use the Internet for several tasks As one source of information, the Internet is especially important The Internet is a major force in the worldwide economy

Search Engines There are at least 10 major search engines Web search engines are software programs They compile information and make it available Search engines are a profitable source of advertising revenue

Typical Online Auction Categories Smartphones and tablets High-end clothing and accessories Art and musical instruments Sports and fitness equipment Antiques and collectibles Home furnishings and electronics Travel packages/hotels Cars

Security and Trust The marketspace – buying and selling on the Internet Trust is needed in the process, fairness, and institutions Privacy is easily compromised Many federal regulations address privacy issues Benefits of shopping include 24/7, comparison shopping, and safety if good practices are followed

Children as Online Consumers FTC specifically protects children online Children are heavy consumers of specific products Parents must partner with children as consumers to protect them

Environmental Impact of the Internet The Internet has both positive and negative influences on the environment The Internet saves paper The Internet uses electricity Reduces need for warehouses and excess transportation

Biometrics Using one’s unique physical traits for ID Although spreading, raises privacy issues

Identity Theft and Privacy Protection The Internet increases identity theft The Internet increases threats to privacy Many Federal statutes address these issues

Identity Theft: Methods and Protections Watch credit card statements Guard checkbooks, pay stubs, credit card receipts, credit & ATM cards, driver’s licenses, and health insurance cards. Use difficult passwords Secure personal information at work Update virus protection regularly Never click on hyperlinks from strangers Log off computers when finished Use post office for mailing Use a “wipe” program to protect personal information on the computer Copyright©2009 Taylor & Francis Group, an informa business

Self-Background Checks More and more organizations are using background checks Use Google to check yourself Use Experian, TransUnion, or Equifax to monitor your credit score and identity safety

Recourse for Victims of Identity Theft Contact your financial institutions Contact the local police Contact fraud departments of the three credit reporting bureaus File a complaint with the FTC. This can be done online

Charities Many charities use the Internet to solicit donations Confirm the genuineness of the charity before donating Evaluate how efficiently the charity spends its money Ask how the money is spent

Chapter Summary Technical disruption is changing the marketspace Consumer behavior online is different from offline Opportunities for identity theft and privacy invasion have multiplied Consumers must use information wisely to protect themselves from identity theft