Home Payment processors BBB study shows online shopping scams flourish on social media during COVID-19 pandemic

BBB study shows online shopping scams flourish on social media during COVID-19 pandemic


Better Business Bureau - BBBNashville, Tennessee – The move towards online shopping during the COVID-19 coronavirus, the global supply chain crisis and the resurgence of the economy have all created a recipe for a frenzied holiday shopping season – a time when the Online shopping fraud poses a huge risk to consumers.

Online shopping scams have exploded during the pandemic and social media ads are playing a key role in the growing problem, according to a new study from the Better Business Bureau® (BBB®).

Comprehensive Investigation Study – Large Scale Theft: Online Shopping Fraud And The Role Of Social Media – Finds Pandemic, Along With Lax Social Commerce Buying Platforms, Has Opened The Door For Scammers In China to steal from desperate online shoppers. Read the full study here.

Online shopping fraud has been on the rise for several years, but according to BBB research it has increased dramatically during the pandemic as more people shop online. A BBB survey found that 29% of people were shopping online before the COVID-19 coronavirus, and that figure rose to 37% by the end of 2020.

In turn, BBB Scam Tracker reports that online shopping scams nearly doubled from 2019 to 2020, and the BBB Institute for Marketplace Trust has named online shopping scams as the riskiest scam of 2020, releasing special reports on this growing fraud in 2020 and 2021.

Complaints filed with the Federal Trade Commission (FTC) regarding online shopping more than doubled in 2020 and continue to rise through 2021. Additionally, online shopping has more businesses rated BBB “F” Than any other type of business.

Most of the online fraud reports reviewed 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.

Counterfeit and pirated products, which are the subject of a 2019 BBB investigative study, are commonplace in online shopping scams. Other reports of online fraud involve sites selling non-existent pets, vehicle shipping programs, and deceptive free trial offers.

A large number of online shopping complaints registered with BBB and reported to BBB Scam Tracker trace back to Facebook and its affiliate Instagram.

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.

Someone from Middle Tennessee recently received an advertisement on social media for a Christmas ornament sale. The individual bought a decoration on sale for $ 80.00 from what he thought was “a small business storefront that ships everywhere.” After a month of waiting, they received a package containing weeds instead of the decorations they had ordered.

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 products online that do not ship or ship items significantly different from what has been described, have been tracked with organized companies or gangs based in China.

While China has blocked its residents from using Facebook’s social media platform in China, companies there sell counterfeit products and spend billions to advertise on the site. Pet scams are mainly exploited by Cameroonian gangs. The vehicle scams have been attributed to 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.

The BBB study makes the following recommendations for consumer protection

  • Facebook should do more to enforce its policies on third-party sellers.
  • BBB urges credit card payment processors to do more to combat those who provide merchant accounts to sellers who engage in fraud.
  • US consumers would benefit from a counterfeit victim assistance program with chargebacks like the one operated in Canada by the Canadian Anti-Fraud Center (CAFC). Such a program can help identify rogue credit card merchant accounts, bogus websites, and points of origin for counterfeit products.
  • More regulatory oversight is needed with respect to companies that use websites to market products from China but deliver counterfeit products, non-advertised items, or nothing at all.

Tips for avoiding online shopping scams

  • Check the website before making a purchase
  • Visit BBB.org to check a company’s rating and BBB accreditation status. Some crooks may copy the BBB seal. If it is real, clicking on the seal will lead to the company’s BBB profile.
  • Scamadvisor.com can often tell you how long a website has been running. Scammers regularly set up and close websites, so a site that has only been running for a short time can set off red flags.
  • Search the Internet for the company name and the word “scam”. This may locate other complaints about the site.
  • Review the reviews: Scammers frequently post positive reviews on their websites, copied from honest sites, or created by scammers. A resource for checking reviews is at BBB.org; some review websites claim to be independent but are funded by scammers. Look at the bad reviews first. These are more likely to be real and can help identify scams.
  • Find contact information: Be careful if the site does not have a US and Canadian phone number, or uses a work Gmail or Yahoo email address.
  • Keep track of what you ordered: Note the website where you ordered goods. Take a screenshot of the ordered item in case the website goes missing or you receive a different item than advertised.
  • Pay by credit card: Credit cards often offer better protection against fraud than other payment methods.

Report online shopping fraud to:

  • Better Business Bureau – file a complaint on BBB.org or report a scam on BBB.org/scamtracker.
  • Federal Trade Commission (FTC) – file a complaint on reportfraud.ftc.gov or call 877-FTC-Help.
  • National Center for the Coordination of Intellectual Property Rights – report intellectual property and infringement violations to iprcenter.gov/referral/view.
  • Internet Crime Complaint Entry (IC3) – file a complaint on ic3.gov/complaint.
  • Facebook – report advertisements that violate Facebook policies by clicking *** next to an advertisement to go to facebook.com/business/help.
  • Instagram – report a copyright violation or other policy violations on help.instagram.com.
  • Amazon – report suspicious activity and web pages on amazon.com.
  • Google – report scams on google.com.
  • Pay Pal – call (888) 221-1161 to speak with a live person instead of using their automated system if you receive an item that is not as advertised.
  • Your credit card company – Call the phone number on the back of the credit card to report the fraud and request your refund.

About BBB of Middle Tennessee and Southern Kentucky

For over 100 years, the Better Business Bureau has helped people find businesses, brands, and charities they can trust. BBB provides objective advice, BBB company profiles on more than 5.3 million companies, 11,000 charity reviews, dispute resolution services, alerts and educational information on matters affecting the market confidence. Visit bbb.org for more information.

There are local and independent BBBs in the United States, Canada, and Mexico, including BBB Serving Middle TN and Southern KY, which was founded in 1961 and serves 45 counties in Middle TN and Southern KY.

Visit bbb.org for more information.