Online shopping scams flourishing during holidays, authorities say
A shift toward online shopping during COVID-19, the global supply chain crisis and a resurging economy have combined to create a frantic shopping season and a wide pool of victims for online scammers.
Fraud targeting cybershoppers has been growing for several years, but online rip-offs have skyrocketed during the pandemic and social media ads are playing a key role in the mushrooming problem, according to federal authorities and the Better Business Bureau.
The Federal Trade Commission reported a surge in reports from people who say they lost money to a scam that started on social media, including a spike in the spring of 2020 at the height of the pandemic. Complaints about scams that started on social media more than tripled between 201920, the agency reported. Shoppers
lost more than $117 million to scammers in just the first six months of last year compared to $134 million for all of 2019, the agency reported.
Most online fraud reports involved a response to ads on Facebook and Instagram. Consumers report rip-offs ranging from sales of nonexistent vehicles, pets and products to counterfeit goods to costly free trial offers. Scammers often take product photos or pages from legitimate businesses, post them on Facebook and Instagram and take online orders at websites they create. This leads to complaints against legitimate businesses, as victims often do not realize they have lost money to a scammer rather than the business the scammer was portraying.
But counterfeit and pirated goods, the subject of a 2019 BBB investigative study, are rampant in online shopping scams, according to the organization.
“Fraudsters understand how
Facebook targets shoppers and have developed strategies to reach those likely to be interested in buying their bogus products,” according to a BBB news release.
Credit cards and Paypal offer some protection by allowing buyers to dispute charges, although scam victims have reported difficulty getting refunds through Paypal. In addition, scammers employ a variety of tactics to circumvent the dispute process, including exorbitant shipping costs to return items for a refund, supplying bogus shipping tracking numbers, and delaying the process in order to run out the clock for a dispute claim, according to the BBB news release.
Counterfeit goods operations, and those who sell goods online that are not delivered or send items significantly different from what was described have been tracked to businesses and organized gangs based in China. Vehicle scams have been traced to
gangs from Romania and freetrial offer scams have been found to be operated mostly by people in the U.S. and Canada, the BBB reported.
Law enforcement actions mostly have been limited to scammers and their accomplices operating in the U.S. and Canada. In 2020, U.S. customs agencies seized $1.3 billion in counterfeit goods, arresting 203 individuals and securing 98 convictions.
Avoid online purchase scams
Scamadviser.com can often tell you how long a website has been in operation. Scammers create and close websites regularly, so a site that has only been operating for a short time could raise red flags.
Do an internet search with the company name and the word “scam.” This may locate other complaints about the site.
Scrutinize reviews: Scammers frequently post positive reviews on their websites, either copied from honest sites or created by scammers. Look at the bad reviews first. These are more likely to be real and can help identify scams.
Search for contact information: Use caution if the site does not have a U.S. or Canadian phone number, or uses a Gmail or Yahoo business email address.
Keep a record of what you ordered: Make a note of the website where you ordered goods. Take a screenshot of the item ordered, in case the website disappears or you receive an item that differs from what was advertised.
Pay by credit card: Credit cards often provide more protection against fraud than other payment methods.
See the BBB study at bit. ly/31nnk4c.