Online auctions continue to be the top source of Internet fraud, reports a leading American consumer organization.

The National Consumers League says fraud in the first 10 months of 2001 topped $4.3 million, up from $3.3 million from the year before.

"(It's) more important than ever for consumers to understand how to avoid online scams and shopping mishaps," said Susan Grant, director of the National Consumers League's Internet Fraud Watch.

NCL's survey concerns American figures, but they are applicable to Canada where online auctions are also a leading source of Internet fraud.

The NCL says money orders are the most common way Internet fraud victims paid for their products or services.

"Credit cards are the safest way to pay because you can dispute the charges if something goes wrong," says Grant.

"And new technologies like substitute or single-use credit card numbers add an extra measure of protection against someone else fraudulently using your account."

In Canada, American Express and CIBC Visa are offering temporary credit card numbers.

The NCL has come up with six tips for avoiding online fraud:

• Check complaint records at your local consumer protection agency and Better Business Bureau. Get the physical address and phone number to contact the seller offline
• Use a credit card because you have the legal right to dispute charges for goods or services that were never ordered, never received, or misrepresented
• Ask your credit card issuer about substitute or single-use credit card numbers
• Look for clues about security. When you provide payment information, the "http" at the beginning of the address bar should change to "https" or "shttp." The site should have information about how they protect personal information
• Get all details before you buy: a description of items; total price, including shipping; delivery time; warranty information; return policy; and what to do if you have problems

The other top Internet frauds are: non-auction sales of general merchandise, Nigerian money offers, Internet access services, Internet adult services, computer equipment/software, work-at-home plans, advance fee loans and credit card issuing.

Canadians spend almost $1 billion a year over the Internet primarily for books, toys, musical merchandise and videos.

Other tips that may help you include using your browser to determine if a site is secure. In Netscape, when a site is secure, a little padlocked icon at the bottom left-hand corner of the screen will appear locked.

Most retailers use Secure Socket Layer (SSL) encryption, which scrambles your information before it's sent to the retailer. Experts say it would take a well-funded organization hundreds of years to break the lock on your information.

You may also want to designate a credit card for online purchases, giving it a low limit.