Unfortunately, whenever money is involved, there is always bound to be underhanded crooks looking to exploit gullible victims.
That is especially the case when it comes to online shopping. Instead of the slick salesmen of the past that preyed on unsuspecting marks by pitching them a product that either didn’t exist or was substantially inferior to how they presented it, the perpetrators now are tech savvy schemers operating anonymously from around the world.
Though the game may have changed, the objective remains the same … to swindle shoppers and take their money. There are several techniques that online scammers use to fool their patsies. In an effort to help keep online shoppers from being victimized, we have compiled a list of five red flags to watch out for that frequently indicate possible scams.
Most Commonly Targeted Users: Classifieds sites are plagued with these types of scams, but they are also prevalent on real estate sites and used car sites. Industry leaders like Craigslist and Trulia have done their best to stamp out these type of scams, but they still sneak through every so often.
How It Works: This is one of the oldest tricks in the book, but it still works often enough that it remains a popular method for digital con artists. A shopper finds an item he/she wants to buy and contacts the seller. The shopper then receives correspondence, usually in the form of an email (although it could be a message via social media or a chat client like Skype), detailing some sort of reason why they can only send the desired item after receiving a wire transfer. Once they receive the wire transfer, they disappear without ever sending the purchased item.
Why It Works: Typically, the seller first gets the buyer’s attention by advertising a spectacular price for something that might otherwise be unattainable. That’s why this particular scam is so routine for pets, apartments, houses and cars. Those are expensive items that many shoppers can only afford if they get a great deal and that desperation hurts their judgment and makes them vulnerable.
Scammers then seek to further capitalize on that vulnerability by using dramatic stories to try and pull at the buyer’s heart strings. Incredible tales of missionary work, sick relatives and tragic financial losses are often cited as reasons for why the transaction can only occur via wire transfer.
How to Avoid It: No matter how convincing or emotional the plea, never proceed with an online purchase that requires a wire transfer. Odds are overwhelming that it’s a scam.
Most Commonly Targeted Users: This scam doesn’t usually take place on the retail site itself, but rather manifests itself in emails from impostors claiming to be from a particular store or company for which the shopper is a loyal patron. While the most popular email clients like Gmail have gotten extremely proficient at filtering out these emails into the spam folder, some still find their way into inboxes, especially on less advanced email clients.
How It Works: A shopper gets an email from someone purporting to be either a representative of one of their favorite stores or pretending to be the store itself. Occasionally, the email will come from an actual friend or relative’s address that has already been compromised. Included in the email is generally a link for some kind of amazing discount offer or gift for being a loyal customer.
In some cases, that link then takes the shopper to a phishing site that plants a virus or spyware on the shopper’s computer, allowing the scammer to seize the shopper’s data, which often includes financial information.
In other cases, that link then takes the shopper to a shadow site that looks very similar to the regular store site. Once the shopper enters and submits his/her payment details, then the scammer steals the information.
Why It Works: By creating email addresses that are very similar to stores and writing emails in such a way that are very reminiscent of those stores, scammers are able to immediately gain the trust of their victims, especially when those victims already regularly receive emails from the company the scammer is imitating. The emails from compromised friends and relatives with apparent shopping links are particularly dastardly and difficult for shoppers to discern.
How to Avoid It: Don’t click on links in emails unless you carefully look at the sender’s email address and closely examine the link itself before clicking on it. Always compare it to previous emails you’ve gotten from the company to make sure everything matches.
As for emails from relatives and friends, it’s a good practice to always check with them before clicking on any links to make sure they sent the email and weren’t hacked recently.
Most Commonly Targeted Users: Bargain hunters and those seeking obscure or discontinued products. It’s very easy to set up an e-commerce site these days and with tons of new ones popping up each day it’s impossible for the authorities, let alone shoppers, to keep up with and verify them all. Scammers use this to their advantage by creating fake online stores that sit under the radar and cater to niche audiences.
How It Works: A swindler builds an e-commerce site that appears to sell real products or services, but in reality just collects billing information that is then stolen and either used, sold or both by the scammer. Many scammers scout potential victims via social media and then approach them with messages, often posing as real users.
Why It Works: Thieves typically go after shoppers looking for an amazing deal or rare item, because those shoppers can’t always find what they want from established merchants and are more willing to take a chance on unknown stores. By designing faux e-commerce sites that are tailored to the needs and preferences of specific groups, it’s not hard for scammers to persuade them that the site is legitimate.
How to Avoid It: There are so many great small e-commerce sites that aren’t famous and we don’t want to discourage you from shopping at these sites. That said, there are a couple of precautions you should always take. E-commerce sites are required to have privacy notices and should have contact information. Don’t shop at sites that don’t have either. Also check review sites like Angie’s List for any information and perform due diligence by doing online research on the company before entering your billing information.
If you decide to proceed, then always use a credit card rather than a debit card, just in case, as credit cards provide more consumer protections.
Most Commonly Targeted Users: Casual shoppers passing time by surfing the web for various items they are considering buying are prone to false advertising, although it can afflict anyone.
Re-sale sites such as eBay have done a lot to thwart false advertising by implementing extensive ratings systems, but that doesn’t keep scammers out completely and there are other sites that don’t have such sophisticated systems in place to protect consumers from false advertising.
How It Works: A scammer either posts an item on a re-sale site or in some cases builds an entire e-commerce site. The item is typically advertised at a decent price and is listed as being in excellent condition or being brand new. Once the item is delivered, however, it turns out to be broken or in poor condition. At that point, the scammer disappears with the money and the customer is left with a defective product.
Another example is when a crook advertises a popular brand name item that is sold out everywhere else, but says he/she has it available. The shopper buys the product only for a cheap knock-off to arrive. By that time the money is long gone and the scammer is nowhere to be found.
A third common way scammers use false advertising is that they hype up a big discount for a trendy product. Instead of sending that trendy product, however, they send a substandard imitation.
Why It Works: False advertising works online for the same reasons it has worked offline for centuries: Because people want to believe the offer being presented. If a seller devises an attractive and convincing enough deal, then it’s inevitable at least a few people will get duped and the scammer will come out ahead.
How to Avoid It: Stay true to the old adage that if something appears too good to be true, it likely is too good to be true. If you are shopping at eBay or a similar type site, stick to the well-rated and verified sellers. Also check sites like RipoffReport.com to see if the seller has a reputation for poor business practices.
Most Commonly Targeted Users: Shoppers seeking a way to get something back when they make purchases.
How It Works: Scammers conceive of persuasive cash-back and rewards programs designed to mimic those that are legitimate, but force the shopper to divulge financial information in order to take part. They then steal the data and never provide any cash-back or rewards.
Why It Works: There are a multitude of authentic cash-back and rewards programs and they have become so ubiquitous that many shoppers have been conditioned to trust they are real. Scammers take advantage of that trust and convince incentive-happy consumers to give up crucial private data and then use that data to steal from under their nose.
How to Avoid It: To be safer, it’s wise to only use cash-back or rewards programs that mail you a check or gift card and don’t require you to submit any type of financial information. If financial information is required, you should probably pass on the program, unless it is clearly associated with a reputable bank or institution.
