Buyers must beware phony sellers
BBB says number of online scams up 87% since 2015
The online retailer Bombas sells socks that are durable, popular and pricey. One pair of women’s ankle socks, for instance, can go for $15.
So when Stephanie Lee, a 36-year-old mother of three from Seaford, Virginia, was alerted to a Bombas sale on the day after Christmas, she jumped at it. Her mother had sent her a Facebook message showing an ad for Bombas socks that were 53% off. When Lee clicked on the ad, she was sent to a page that had all the trappings of the company’s website, including a heading advertising “free shipping.”
“Of course, they’re going to be discounting things right after Christmas because they are getting ready for the next season,” Lee said she recalled thinking.
She snagged a pair for her husband, a sock bag for the washer and a six-pack of Disney Princess-themed socks, perfect for her and her mother to wear while running the Disney Princess Half Marathon next month. Her total came to $116, and she entered her husband’s credit card information to pay.
The Disney socks alone usually cost $120. But Lee became suspicious when a confirmation email did not arrive in her inbox right away as it normally did when she ordered from Bombas.
Lee is just one of many shoppers lured in by a phony site peddling another company’s merchandise. It’s a problem increasingly confounding companies like Bombas, whose business model depends on advertising online and generating traffic through social media channels.
“It’s been a total game of whack-a-mole,” said Dave
Heath, CEO of Bombas, which has taken a proactive approach to rooting out fake sites that purport to sell its products. “The second that we report a site and it gets blocked on one of the social media channels or blacklisted, they just spin up another instance, and then there’s ads running almost kind of instantly.”
Online scams, which have existed for as long as things have been sold on the internet, are adapting to the budget-conscious behaviors of American consumers. Shoppers held out for bargains during the holiday season, knowing that stores, needing to get rid of inventory and worried about slowing sales, were more likely to offer them.
That dynamic has created a ripe environment for fake sites to dupe unassuming shoppers who are strapped for cash and time by claiming to offer deep discounts
on premium brands.
“It’s playing on the emotion of the consumer,” said Douglas LaGore, a principal in KPMG’s cybersecurity services division.
Many of these fake sites are run by networks of swindlers seeking to target large organizations, LaGore said. Over the past couple of years, many of these networks have produced a “cyber threat supply chain,” he said, meaning different groups gain specialized skills. One group in the network might identify potential targets, for instance, while another creates the deceptive material.
Impostor sites often use the same tactics as retailers — like paid search optimization tools, mobile apps and advertising strategies — to generate traffic, said Rick Farnell, CEO of Tracer, which uses artificial intelligence to identify potential cases of fraud through
text and images. Tracer has taken down as many as 20,000 fake sites in a month for a client, he said.
About 35% of Tracer’s clients are retailers. Among them is Rothy’s, the women’s shoe brand known for its ballet flats. Rothy’s also works with Facebook’s parent company, Meta, and, using tips from customers on Facebook who flag fake ads, said it now deals with a few dozen impostor sites per month.
Toward the end of 2020 and beginning of 2021, Rothy’s was “easily dealing with hundreds of fake websites per month,” said Zoe Richards, a company spokesperson.
The Better Business Bureau said the number of online scams in general has risen 87% since it began tracking them in 2015.
Of all online scams, retail-related ones are considered the most harmful in
terms of the likelihood that a victim will lose money and the median amount of money at stake. They make up about one-third of all scams, and 72% of people lose money when targeted, according to an October report from the bureau.
Nearly one-quarter of the victims of online fraud said they were roped in by the offer of a great price.
For e-commerce retailers, especially those that rely on customers coming to them through ads on social media, dealing with these sites can feel like a never-ending task. As soon as one site is flagged and shut down, another one pops up promising a new, eye-popping discount.
In 2022, Bombas documented more than 9,000 instances in which customers encountered impostor sites, said Heath. It found 900 different sites claiming to be Bombas, many of them offering discounts.
Some of the fake sites completely mirror Bombas. In at least one instance, an impostor site for the luxury brand Paul Smith listed marked-down copycat Bombas socks. On TikTok, an account called @BOMBASS pushed a 50% discount for Cyber Monday. Some shoppers have received texts about flash sales with discounts of 80%.
The steepest discount Bombas offers is 25% off, and it runs one promotion from Black Friday through Cyber Monday, Heath said.
To try to tamp down on the fraud, Bombas has trained workers in its customer service department on how to advise affected shoppers. The company sometimes sends duped customers a free pair of socks, as it did for Lee, who wrote a long email to Bombas explaining why she thought the fraudulent site was real.
“We’re really at the mercy of the technology companies that we’re advertising on because they’re the ones who kind of can control the flow of whether the sites get posted,” Heath said.
Meta said that it takes the threat of scams seriously, removing any offending ads when it finds them.
“We’ve created tools that people can use to report suspicious businesses, ads and product listings on Facebook and Instagram, as that information can help us improve our ability to combat fraudulent activity on our platforms,” the company said in an emailed statement.
TikTok said that advertising needed to pass through “multiple levels of verification” before being approved.
“We have measures in place to detect and remove fraudulent ads,” the company said in an emailed statement. “We regularly review and improve our policies and processes in order to combat increasingly sophisticated fraud attempts and further improve the experience for our community.”