LEGAL ONLINE TRANSACTIONS

When a company insures an individual entity, there are basic legal requirements. Several commonly cited legal principles of insurance include:

Indemnity – the insurance company indemnifies, or compensates the insured in the case of certain losses only up to the insured's interest

Insurable interest – the insured typically must directly suffer from the loss. Insurable interest must exist whether property insurance or insurance on a person is involved. The concept requires that the insured have a "stake" in the loss or damage to the life or property insured. What that "stake" is will be determined by the kind of insurance involved and the nature of the property ownership or relationship between the persons.

Utmost good faith – the insured and the insurer are bound by a good faith bond of honesty and fairness.

Contribution – insurers which have similar obligations to the insured contribute in the indemnification, according to some method.

Subrogation – the insurance company acquires legal rights to pursue recoveries on behalf of the insured; for example, the insurer may sue those liable for insured's loss.

Causa Proxima or Proximate Cause – the cause of loss (the "peril") must be covered under the insuring agreement of the policy, and dominant cause must not be excluded.

To "indemnify" means to make whole again, or to be put in the position that one was in, to the extent possible, prior to the happening of a specified event or peril. Accordingly, life insurance is generally not considered to be indemnity insurance, but rather "contingent" insurance (i.e., a claim arises on the occurrence of a specified event). There are generally two types of insurance contracts that seek to indemnify an insured:

1. an "indemnity" policy and
2. a "pay on behalf" or "on behalf of" policy.

The difference is significant on paper, but rarely material in practice.
An "indemnity" policy will never pay claims until the insured has paid out of pocket to some third party; for example, a visitor to the home slips on a floor that you left wet and sues you for $10,000 and wins. Under an "indemnity" policy the homeowner would have to come up with the $10,000 to pay for the visitor's fall and then would be "indemnified" by the insurance carrier for the out of pocket costs (the $10,000).

Under the same situation, a "pay on behalf" policy, the insurance carrier would pay the claim and the insured (the homeowner) would not be out of pocket for anything. Most modern liability insurance is written on the basis of "pay on behalf" language.
An entity seeking to transfer risk (an individual, corporation, or association of any type, etc.) becomes the 'insured' party once risk is assumed by an 'insurer', the insuring party, by means of a contract, called an insurance 'policy'. Generally, an insurance contract includes, at a minimum, the following elements: the parties (the insurer, the insured, the beneficiaries), the premium, the period of coverage, the particular loss event covered, the amount of coverage (i.e., the amount to be paid to the insured or beneficiary in the event of a loss), and exclusions (events not covered). An insured is thus said to be "indemnified" against the loss covered in the policy.

When insured parties experience a loss for a specified peril, the coverage entitles the policyholder to make a 'claim' against the insurer for the covered amount of loss as specified by the policy. The fee paid by the insured to the insurer for assuming the risk is called the 'premium'. Insurance premiums from many insureds are used to fund accounts reserved for later payment of claims—in theory for a relatively few claimants—and for overhead costs. So long as an insurer maintains adequate funds set aside for anticipated losses (i.e., reserves), the remaining margin is an insurer's profit.

An online identity, internet identity, or internet persona is a social identity that an Internet user establishes in online communities and websites. Although some people prefer to use their real names online, some internet users prefer to be anonymous[original research?], identifying themselves by means of pseudonyms, which reveal varying amounts of personally identifiable information.

In some online contexts, including Internet forums, MUDs, instant messaging, and massively multiplayer online games, users can represent themselves visually by choosing an avatar, an icon-sized graphic image. As other users interact with an established online identity, it acquires a reputation, which enables them to decide whether the identity is worthy of trust Some websites also use the user's IP address to track their online identities using methods such as tracking cookies .

The concept of the personal self, and how this is influenced by emerging technologies, are a subject of research in fields such as psychology and sociology. The Online disinhibition effect is a notable example, referring to a concept of unwise and uninhibited behavior on the internet, arising as a result of anonymity and audience gratification

Identity expression and identity exposure
The social web, i.e. the usage of the web to support the social process, represents a space in which people have the possibility to express and expose their identity (Marcus, Machilek & Schütz 2006) in a social context. For instance people define explicitly their identity by creating user profiles in social network services such as Facebook or LinkedIn or in online dating services (Siibak 2007). By using blogs and expressing opinions, they define more tacit identities.

The disclosure of a person's identity may present a certain number of issues (Nabeth 2006) related to privacy and the undesired disclosure of personal information. However many people adopt strategies allowing them to control the level of disclosure of their personal information online (Tufekci 2008).

The identities that people define in the social web are not necessarily reliable. For example studies have shown that people lie in online dating services. (Epstein 2007) (Hancock, Toma & Ellison 2007). In the case of social network services such as Facebook, companies are even proposing to sell 'friends' as a way to increase a user's visibility, calling into question even more the reliability of a person's 'social identity

Dorian Wiszniewski and Richard Coyne in their contribution to the book Building Virtual Communities explore online identity, with emphasis on the concept of "masking" identity They point out that whenever an individual interacts in a social sphere they portray a mask of their identity. This is no different online and in fact becomes even more pronounced due to the decisions an online contributor must make concerning his or her online profile. He or she must answer specific questions about age, gender, address, username and so forth. Furthermore, as a person publishes to the web he or she adds more and more to his or her mask in the style of writing, vocabulary and topics. Though the chapter is very philosophical in nature, it spurs the thinking that online identity is a complex business and still in the process of being understood.

First of all, does the mask truly hide identity? The kind of mask one chooses reveals at least something of the subject behind the mask. One might call this the "metaphor" of the mask. The online mask does not reveal the actual identity of a person. It, however, does reveal an example of what lies behind the mask. For instance, if a person chooses to act like a rock star on line, this metaphor reveals an interest in rock music. Even if a person chooses to hide behind a totally false identity, this says something about the fear and lack of self-esteem behind the false mask.

Second, are masks necessary for online interaction? Because of many emotional and psychological dynamics, people can be reluctant to interact online. By evoking a mask of identity a person can create a safety net. One of the great fears of online identity is having one's identity stolen or abused. This fear keeps people from sharing who they are. Some are so fearful of identity theft or abuse that they will not even reveal information already known about them in public listings. By making the mask available, people can interact with some degree of confidence without fear.
Third, do masks help with education? Wiszniewski and Coyne state "Education can be seen as the change process by which identity is realized, how one finds one's place. Education implicates the transformation of identity. Education, among other things, is a process of building up a sense of identity, generalized as a process of edification." By students interacting in an online community they must reveal something about themselves and have others respond to this contribution. In this manner, the mask is constantly being formulated in dialogue with others and thereby students will gain a richer and deeper sense of who they are. There will be a process of edification that will help students come to understand their strengths and weaknesses.

A debit card (also known as a bank card or check card) is a plastic card that provides an alternative payment method to cash when making purchases. Functionally, it can be called an electronic cheque, as the funds are withdrawn directly from either the bank account, or from the remaining balance on the card. In some cases, the cards are designed exclusively for use on the Internet, and so there is no physical card.

In many countries the use of debit cards has become so widespread that their volume of use has overtaken the cheque and, in some instances, cash transactions. Like credit cards, debit cards are used widely for telephone and Internet purchases and, unlike credit cards, the funds are transferred immediately from the bearer's bank account instead of having the bearer pay back the money at a later date.
Debit cards may also allow for instant withdrawal of cash, acting as the ATM card for withdrawing cash and as a cheque guarantee card. Merchants may also offer cashback facilities to customers, where a customer can withdraw cash along with their purchase.

There are currently three ways that debit card transactions are processed: online debit (also known as PIN debit), offline debit (also known as signature debit) and the Electronic Purse Card System. It should be noted that one physical card can include the functions of an online debit card, an offline debit card and an electronic purse card.

Although many debit cards are of the Visa or MasterCard brand, there are many other types of debit card, each accepted only within a particular country or region, for example Switch (now: Maestro) and Solo in the United Kingdom, Interac in Canada, Carte Bleue in France, Laser in Ireland, "EC electronic cash" (formerly Eurocheque) in Germany and EFTPOS cards in Australia and New Zealand. The need for cross-border compatibility and the advent of the euro recently led to many of these card networks (such as Switzerland's "EC direkt", Austria's "Bankomatkasse" and Switch in the United Kingdom) being re-branded with the internationally recognised Maestro logo, which is part of the MasterCard brand. Some debit cards are dual branded with the logo of the (former) national card as well as Maestro (e.g. EC cards in Germany, Laser cards in Ireland, Switch and Solo in the UK, Pinpas cards in the Netherlands, Bancontact cards in Belgium, etc.). The use of a debit card system allows operators to package their product more effectively while monitoring customer spending. An example of one of these systems is ECS by Embed International.

Online Debit System
Online debit cards require electronic authorization of every transaction and the debits are reflected in the user’s account immediately. The transaction may be additionally secured with the personal identification number (PIN) authentication system and some online cards require such authentication for every transaction, essentially becoming enhanced automatic teller machine (ATM) cards. One difficulty in using online debit cards is the necessity of an electronic authorization device at the point of sale (POS) and sometimes also a separate PINpad to enter the PIN, although this is becoming commonplace for all card transactions in many countries. Overall, the online debit card is generally viewed as superior to the offline debit card because of its more secure authentication system and live status, which alleviates problems with processing lag on transactions that may only issue online debit cards. Some on-line debit systems are using the normal authentication processes of Internet banking to provide real-time on-line debit transactions. The most notable of these are Ideal and POLi.

Offline Debit System
Offline debit cards have the logos of major credit cards (e.g. Visa or MasterCard) or major debit cards (e.g. Maestro in the United Kingdom and other countries, but not the United States) and are used at the point of sale like a credit card (with payer's signature). This type of debit card may be subject to a daily limit, and/or a maximum limit equal to the current/checking account balance from which it draws funds. Transactions conducted with offline debit cards require 2–3 days to be reflected on users’ account balances. In some countries and with some banks and merchant service organizations, a "credit" or offline debit transaction is without cost to the purchaser beyond the face value of the transaction, while a small fee may be charged for a "debit" or online debit transaction (although it is often absorbed by the retailer). Other differences are that online debit purchasers may opt to withdraw cash in addition to the amount of the debit purchase (if the merchant supports that functionality); also, from the merchant's standpoint, the merchant pays lower fees on online debit transaction as compared to "credit" (offline) debit transaction.

Advantages and Disadvantages
Debit and check cards, as they have become widespread, have revealed numerous advantages and disadvantages to the consumer and retailer alike.
The following allegations seem to be based only on the current situation within the U.S.A. Please read with caution as they may not apply to any other countries.

Advantages are as follows:

A consumer who is not credit worthy and may find it difficult or impossible to obtain a credit card can more easily obtain a debit card, allowing him/her to make plastic transactions.

For most transactions, a check card can be used to avoid check writing altogether. Check cards debit funds from the user's account on the spot, thereby finalizing the transaction at the time of purchase, and bypassing the requirement to pay a credit card bill at a later date, or to write an insecure check containing the account holder's personal information.

Like credit cards, debit cards are accepted by merchants with less identification and scrutiny than personal checks, thereby making transactions quicker and less intrusive. Unlike personal checks, merchants generally do not believe that a payment via a debit card may be later dishonored.

Unlike a credit card, which charges higher fees and interest rates when a cash advance is obtained, a debit card may be used to obtain cash from an ATM or a PIN-based transaction at no extra charge, other than a foreign ATM fee.


The Debit card has many disadvantages as opposed to cash or credit:

Use of a debit card is not usually limited to the existing funds in the account to which it is linked, most banks allow a certain threshold over the available bank balance which can cause overdraft fees if the customer does not depend on their own records of spending.

Many banks are now charging over-limit fees or non-sufficient funds fees based upon pre-authorizations, and even attempted but refused transactions by the merchant (some of which may not even be known by the client).

Many merchants mistakenly believe that amounts owed can be "taken" from a customer's account after a debit card (or number) has been presented, without agreement as to date, payee name, amount and currency, thus causing penalty fees for overdrafts, over-the-limit, amounts not available causing further rejections or overdrafts, and rejected transactions by some banks.

In some countries debit cards offer lower levels of security protection than credit card]. Theft of the users PIN using skimming devices can be accomplished much easier with a PIN input than with a signature-based credit transaction. However, theft of users' PIN codes using skimming devices can be equally easily accomplished with a debit transaction PIN input, as with a credit transaction PIN input, and theft using a signature-based credit transaction is equally easy as theft using a signature-based debit transaction.

In many places, laws protect the consumer from fraud much less than with a credit card. While the holder of a credit card is legally responsible for only a minimal amount of a fraudulent transaction made with a credit card, which is often waived by the bank, the consumer may be held liable for hundreds of dollars, or even the entire value of fraudulent debit transactions. The consumer also has a shorter time (usually just two days) to report such fraud to the bank in order to be eligible for such a waiver with a debit card, whereas with a credit card, this time may be up to 60 days. A thief who obtains or clones a debit card along with its PIN may be able to clean out the consumer's bank account, and the consumer will have no recourse.

In the UK and Ireland, among other countries, a consumer who purchases goods or services with a credit card can pursue the credit card issuer if the goods or services are not delivered or are unmerchantable. While they must generally exhaust the process provided by the retailer first, this is not necessary if the retailer has gone out of business. This protection is not provided by legislation when using a debit card but may be offered to a limited extent as a benefit provided by the card network, e.g. Visa debit cards.

When a transaction is made using a credit card, the bank's money is being spent, and therefore, the bank has a vested interest in claiming its money where there is fraud or a dispute. The bank may fight to void the charges of a consumer who is dissatisfied with a purchase, or who has otherwise been treated unfairly by the merchant. But when a debit purchase is made, the consumer has spent his/her own money, and the bank has little if any motivation to collect the funds.

In some countries, and for certain types of purchases, such as gasoline (via a pay at the pump system), lodging, or car rental, the bank may place a hold on funds much greater than the actual purchase for a fixed period of time. However, this isn't the case in other countries, such as Sweden. Until the hold is released, any other transactions presented to the account, including checks, may be dishonoured, or may be paid at the expense of an overdraft fee if the account lacks any additional funds to pay those items.

While debit cards bearing the logo of a major credit card are accepted for virtually all transactions where an equivalent credit card is taken, a major exception in some countries is at car rental facilities. In some countries, such as Canada & Australia, car rental agencies require an actual credit card to be used, or at the very least, will verify the creditworthiness of the renter using a debit card. In Canada and additional unspecified countries, car rental companies will deny a rental to anyone who does not fit the requirements, and such a credit check may actually hurt one's credit score, as long as there is such a thing as a credit score in the country of purchase and/or the country of residence of the customer.