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Shoppers are increasingly, and exclusively, shopping online over shopping at brick-and-mortar stores. More than 4,300 stores are closing this year, marking 2020 as the “Retail Apocalypse.” Although it’s a significant loss for businesses, it’s a huge gain for cybercriminals.
The “2019 BBB Scam Trackersm Risk Report” found that online purchase scams made up 24.3% of all reported scams (up from 2018 and 2017). In 2019, 81.2% of consumers reported losing money to online fraudsters, revealing that online purchase scams were the most common scam type with the most victims.
To help you keep you guard up while shopping online, we’ve rounded up common online scams to be aware of. Learn more about how these scams work and take the necessary precautions to protect yourself!
According to FTC Consumer Information, the FTC has received 18,235 reports of COVID-19-related fraud between January and April 2020. Victims reported losing $13.44 million to fraud, and top complaint categories included online shopping. Fraudsters have been using the pandemic as a snake oil opportunity to sell miracle cures, vaccines and other preventative and treatment products — which are currently fake and illegitimate. To learn more, visit:
Scammers create a faux e-commerce site or app that mimic trusted retailers. The platform’s design, logo, slogan and URL can be easily mistaken for the real retailer. Their hook is to offer steep discounts on products and promises like free shopping and overnight delivery. You may never end up receiving the purchase, or you get counterfeit, low-quality or damaged merchandise. AARP lists these warning signs to look out for:
It’s not hard to fall for it: You’re mindlessly scrolling your Instagram feed and a sponsored ad offering a killer deal pops up. Despite being sold by a peculiar company you’ve never heard of, you jump to buy the merch within the Instagram app. Then the product never arrives, or you get a cheaply made item that came from a “dropshipping" store. This means the retailer doesn’t keep its products for sale in stock. Instead, they purchase products manufactured somewhere else, like China, and it’s directly shipped to the customer.
These schemes target shoppers with a scarcity tactic, which is making a product look more desirable because of an incredible price or limited availability. To make sure you don’t fall for scarcity trickery, keep these tips in mind:
Online auction sites (like eBay, eBid and Bonanza) operate like a massive virtual flea market where merchandise is up for trade. Buyers bid on items and the highest bidder is expected to buy the item as the auction closes. Next, the buyer and seller arrange for payment and delivery.
Auctions are a great platform for selling a wide variety of items at a great value; however, fraud is a major consumer concern. Fraud involves misrepresentation or non-delivery of an advertised product, untimely delivery and compromised bank accounts. The FBI has issued a list of 10 fraud-prevention tips, including:
Among all the top product categories of online purchase scams, pets (including puppies, kittens, birds and exotic animals) ranked fourth, with 7.1% exposure, 85.2% susceptibility and $153 median loss, according to the “2019 BBB Scam TrackerSM Risk Report.” The ruse works when a perpetrator, pretending to be a breeder, posts a fake photo of a pet — or the scammer acts as a devastated owner desperate to rehome their pet as soon as possible. You think you’ve found the newest furry member of a family, only to find out that you’ve been duped and the scammer disappeared with your money.
Before you adopt a pet from internet, make sure to learn about 10 do’s and don’t’s in our “Don’t Fall for an Online Pet Adoption Scam” video!
It can feel euphoric to buy something online, or maybe you’re quickly going through the steps to get a necessity. Either way, it’s easy to ignore the risks of being scammed and rush into making an online purchase. Check out an online purchase scams tip from the Better Business Bureau® and learn more about scams!
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The material presented here is for educational purposes only and is not intended to be used as financial, investment or legal advice.