Protecting Yourself Against Online Shopping Scams

Fraud is not something new to us. The growth of technology has caused an influx of varying scams. Most people are aware of identity theft and the precautions to take. First-party fraud is also on the rise, with people intentionally fabricating all or part of their identity to avoid paying for products or services or to receive reduced rates.¹ With online shopping at large and the holiday season upon us, we want to talk about online shopping scams we’ve been seeing lately that we might be more likely to fall for.

This week, a conversation among employees sparked our desire to dig deeper into this subject matter. An employee said, “My husband was browsing Facebook this weekend and came across a sponsored post for some tools that looked interesting. They were a “special deal” and looked very intriguing. The package had everything he needed and then some. He mentioned “If this is legit then I need like four of these because it’s such a good deal.” I then said, “How do you know it’s real or a great deal??” So he googled the company and turns out it was a complete sham!”

Scammers are now going to deeper depths to entice you to hand over your credit card information. They’re not just sending you emails anymore; they’re letting you come to them. These advertisements of fake products are paid ads, meaning the scammers are paying for a wider reach of people to view the ad. Many people view the “sponsored” tag as a mark of credibility on social sites. After I grabbed my Sherlock hat and cape, I did some investigating in the hopes of finding what we should be looking out for and steps we can take to protect ourselves.

The online shopping scam is very common, but the social media aspect is newer. These scammers set up fake websites, often with very sophisticated web design and sometimes stolen logos from legitimate businesses. While a major warning sign is that the website you’re directed to doesn’t use a common domain extension such as .com or has a ridiculous or nonsensical domain name, some have found ways to obtain the .com extension. Another major red flag is that the price is unbelievably low or the features are too good to be true. The biggest sign though, is the payment method. It’s common for scammers to ask for money orders, pre-paid gift cards, or wire transfers. These “stores” are often only open for a short amount of time before disappearing.

Ways to Avoid These Scams:

- Look at the review section of the business page on social media or do a quick Google search of the company.

- Ensure the payment service is secure. You will see an ‘https’ url and a closed padlock symbol or a trusted payment provider such as PayPal. If the seller requires immediate payment such electronic funds transfer or wiring money, run!

- Avoid social-media based stores that are very new and offer extremely low prices.

- Look for information about delivery, privacy, terms and conditions of use, contact information, and dispute information. Most online shopping and auction sites have detailed resolution processes.

Sources:

1. https://www.experian.co.uk/blogs/latest-thinking/identity-and-fraud/what-is-first-second-and-third-party-fraud/What Is First, Second, and Third Party Fraud?
2. https://mashable.com/article/facebook-scam-crowdfunding-ads/
3. https://www.scamwatch.gov.au/types-of-scams/buying-or-selling/online-shopping-scamsgov Online Shopping Scams