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The move towards online shopping during COVID-19, the global supply chain crisis, and the economic recovery have all created a recipe for a frenzied holiday shopping season.
It’s a year when online shopping fraud poses a huge risk to consumers. A new study from the Better Business Bureau finds that online shopping scams have exploded during the pandemic and that social media ads are playing a key role in the growing problem.
The in-depth investigative study finds that the pandemic, along with lax social commerce shopping platforms, has opened the door for crooks in China to rob desperate online shoppers.
Following:Here’s how to tell if your phone has been hacked and what you can do about it.
Online shopping fraud has been on the rise for several years, BBB Scam Tracker’s reports of online shopping scams nearly doubled from 2019 to 2020, and the BBB Institute for Marketplace Trust has named online shopping scams as riskiest scam of 2020.
In addition, online shopping has more businesses rated BBB “F” than any other type of business. More online fraud reports examined involve a response to online advertisements on Facebook and Instagram.
After placing an order, victims report not having received anything or received items that are counterfeit or inferior to what the ads promised. Scammers often take photos of products or a landing page of legitimate businesses, post them on Facebook and Instagram, and take online orders from the websites they create.
This leads to complaints against legitimate businesses, as victims often don’t realize that they lost their money to a scammer rather than the business the scammer was describing.
BBB has found that it is common for people who are not actively researching a product, but losing money in the transaction, to start with Facebook or Instagram 70% of the time.
Scammers understand how Facebook targets shoppers and have developed strategies to reach those who are likely to be interested in purchasing their fake products. Many victims and legitimate businesses believe that Facebook and Instagram should do more to prevent this widespread fraud.
A recent federal class action lawsuit against Facebook claims it is complicit in fraudulent sales and is not following its own policies to address them.
While credit cards remain the most common form of payment in online scams, online crooks increasingly demand payment through PayPal. Credit cards and PayPal provide some degree of buyer protection by allowing buyers to dispute charges, although victims of scams have reported difficulty obtaining refunds through PayPal.
Additionally, scammers use various tactics to bypass the dispute process, including exorbitant shipping fees to return items for COD, providing fake shipping tracking numbers, and delaying the process so as to run out of time for a claim. in dispute.
Online shopping scams come from a variety of players. Counterfeit operations, and those who sell goods online that do not ship or ship items very different from what has been described, have been traced to organized companies or gangs based in China.
While China has blocked its people from using Facebook’s social media platform, some companies in China are counterfeiting products and spending billions on advertising on the site. Cameroon’s gangs mainly operate pet scams. The vehicle scams have been blamed on gangs in Romania, and the free trial offer scams have been found to be mainly exploited by people in the United States and Canada.
Law enforcement actions were mainly limited to con artists and their accomplices operating in the United States and Canada. In 2020, U.S. Customs seized $ 1.3 billion in counterfeit goods, arresting 203 people and securing 98 convictions.
Dennis Horton is the director of the Rockford regional office of the Better Business Bureau.
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