Consumers should beware of scammers when shopping online. Scammers may advertise really low prices using a fake website full of stolen images, a fake ad on a genuine retailer’s website, or through an auction site. They’ll pocket your money and never deliver any of the products, or perhaps send you a cheap knock off of what was advertised.
Sellers are also not immune to online scams. Scammers may pose as buyers and send faulty money orders for more than the item’s asking price. Banks will initially accept the money orders as legitimate and so the seller will send the buyer a refund of the overpaid amount only to have the deposited money reversed after the bank catches on to the fraud.
Tips to Avoid this Scam:
Here are a few tips to help you avoid these online scams.
- Be Suspicious. If a price of an item is too good to be true, it probably is. The seller may have no intention of delivering the goods, or you may be paying for counterfeit or stolen goods. For sellers, beware of buyers overpaying for goods with a check or money order and then asking for refunds. They may be setting you up for a scam where you write a good check to them, but their payment is fraudulent and ultimately worthless.
- Get the Details. Read the description of the item closely. The fine print may explain that the item is not what was advertised. Ask about returns, warranties, delivery dates, whether they provide tracking numbers, and who pays for shipping and handling to prevent any unforeseen charges.
- Research the Company. A quick internet search of the company may tip you off to whether the seller is legitimate. Here are some tips on how to do a background check on a company. Do not buy anything from an untrustworthy company.
- Use a Credit Card. Credit card purchases are protected by the Fair Credit Billing Act, which means that you can dispute charges if something goes wrong. Some credit cards also provide additional warranty, return, and purchase protection benefits. PayPal may also provide certain protections if you do not receive the goods purchased. Do not pay with cash, money order, bitcoin, or wire transfer because you will not have the ability to reverse the charge if something goes wrong.
- Purchase within the Online Auction Platform. Online auction sites often have strict policies to provide protection from the consumer. Scammers will often advertise on the auction site but then approach you to purchase outside of the online platform claiming that the winner of the auction backed out, or something like that. Don’t fall for it. You won’t be protected if you do not receive the item.
- Make Sure You Have a Secure Connection. Before providing any personal or financial information online, make sure that the website is secure. You can do this by looking at the URL address to see if it begins with https (the “s” indicates its secure) and/or has a lock icon displayed, as demonstrated below. Do not email your credit card number, checking account, or social security number. It is not a safe way to transmit financial information.
- Keep Records and Check Your Credit Card Statements. Keep Records and Check Your Credit Card Statements. Save your receipts, the description and price of the product, and any communications with the seller. Check your credit card statements to protect yourself from any undisclosed charges.
What to Do If You’re a Victim
If you have problems during an online transaction, try working it out with the seller, online retail website, or online auction site first. If that doesn’t work, call your credit card company to dispute and reverse the charge.
For more information about protecting yourself while shopping online, check out the following webpages:
- FTC’s page titled, “Shopping Online”
- FBI’s page titled, “Non-Delivery of Merchandise”
- FBI’s page titled, “Business Fraud”
- Better Business Bureau’s page titled, “BBB Tip: Online Purchase Scams”
- Australian Competition & Consumer Commission’s page titled,“Online shopping scams”
- Scam Alert Singapore’s page titled, “What is an Online Purchase Scam?”