Be careful of Facebook identity fraud
Online fraud damages e-commerce revenues
Club Oho, an online distributor of dietary supplements for weight loss operated on Facebook, recently made headlines when the company announced it loses a million baht each month in compensation to its customers who were victims of online fraud due to fake Facebook pages.
Thanakin Siridusitwong, Oho’s managing director of marketing, said that it is very difficult for customers to differentiate between Oho’s official page and fake ones.
“To lure potential customers into buying their products, criminals create a website or [Facebook] pages with a similar design to make it look like the real one,” said Thanakin. Thailand has seen a drop in the country’s overall e-commerce and it is not just a result of the economic downturn but also due to online fraud cases. Club Oho is one such example. Oho claims to be Thailand’s number one revenue generating page on Facebook, with nearly 100 million baht in revenue each month. The company has around a million customers, and spends almost 10 million baht each month on Facebook advertising. With its two lines of goods: beauty and weight loss products, Oho claims to grow more than 50% each month.
On the fake Facebook page, customers were given a bank account number different from that on the company’s official page.
“Some customers were informed that the account number of Oho had changed, and they were told to transfer their money to the new account,” said Thanakin, adding that this is just one of the many tricks criminals use to cheat. Some fake Oho pages claimed their new products came with a special discount but actually they did not have any products for sale.
“We made an announcement that our genuine products have no discount. Those that advertise special prices are not the real ones.”
Comments posted by potential customers on the Oho page is also a loophole where criminals look for victims. Comments allow criminals to contact customers directly, offering them advice to make them think the page is real.
Victims of the fraud are advised to notify the police. Customers who decided to take legal action might, unfortunately, find the procedure discouraging because legally speaking, a case is considered fraud only when there are more than 10 reports. Legal protocol takes such a long time that it disheartens the victims to deal and fight for themselves.
“We initially solved the problem by offering customers who were deceived a free set of products as replacement. If we do nothing, it’s unfair to our customers. And we also tried to collect as many customer notices [of the fraud] as possible, but the problem is that customers, mainly in provincial areas, don’t know how best to approach the authorities,” said the managing director, noting that more than 70% of Oho customers are in provincial areas.
On average, the value of Oho’s purchased products is around 1,000 to 4,000 baht per bill. Criminals mainly target new customers or purchases with a higher value, or more than 4,000 baht.
Having operated for almost four years, Club Oho first started facing fraudulent claims in the middle of last year.
“The company now has a special team to take care of this issue,” Thanakin said. “We collected the names of all fake pages and sent them out as ‘blacklisted pages’ to our customers.”
To solve further problems, Oho had their products insured. Therefore, the insurance company will pay up to 10 million baht per case if products from fake pages are proven to be harmful to customers.
Customers can also trace their product delivery via the logistic system and the post office system. The company is now working with a logistic company in developing a GPS tracking system, which will enable customers to check the products’ whereabouts more precisely.
The company has also invested in a management software system, which functions as a customer relationship management system. “These features allow us to understand the consumers, what they want at a certain moment, so we can adjust things at the right time,” said Thanakin.
The problem is that customers don’t know how best to approach the authorities