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To go with gift-giving season, scammers have a “crafty new con” for snaring online shoppers, according to Better Business Bureau.
It works like this: The scammer lures Joe the shopper to a website. Joe selects an item and purchases it. Shortly after Joe’s credit card is charged, he gets an email saying the item is out of stock and the cost will be refunded.
Joe waits for the refund to be posted to his account. It doesn’t appear. Joe sends email after email asking about the refund but never gets a response.
The most likely fact is that the item Joe ordered, and the shop he ordered from, don’t exist, according to BBB. Shoppers like Joe, who used a credit card and monitored his refund, usually can contest the charge and get their money back.
But scammers count on shoppers prolonging the deceit by not noticing their refund didn’t materialize and, if they do, not reporting the fake online shop. Either way, the scammers get money for nothing.
This holiday season, scammers are busier than ever, running all manner of online shopping cons and making a living at it.
“Online shopping expanded during COVID because more of our lives were online during the pandemic,” said Kristen Johnson, director of communications for Better Business Bureau Serving Connecticut. “Scammers like to be where we are. They saw us doing business online so they hopped online and tried to take advantage.”
The percentage of online scams reported to the BBB Scam Tracker increased 87 percent between 2015 and 2022, Johnson said.
Online purchase scams are the most prevalent type by far, she said. They comprise 37 percent of all scam types, which includes cryptocurrency, employment, home improvement, investment, government grant, check and money-order scams, and more.
Three-quarters of people who reported an online purchase scam said they’d lost money. According to the 2022 BBB Online Scams Report, the median loss was $114.
Most people, 55 percent, come in contact with a scammer on a website, social media site, or by email. About 35 percent of scams are perpetrated by phone call or text, according to the report.
Among online purchase scams, the means of contact with the highest reported median dollar loss is text message, at $638.
Scammers use texts to push people online, according to the BBB.
Scammers are insidious, Johnson said.
“As soon as we educate people about one kind of scam, they are moving on to the next one,” Johnson said. “Right now there’s a phony U.S. Postal Service text out there. It says, ‘We can’t make your delivery because the address is wrong.’ It directs you to a website where they capture your name, address and credit card information. As soon as that information got out, they changed the text from USPS to FedEx, but it was the same scam.”
BBB’s Scam Tracker, at https://www.bbb.org/scamtracker, logs the fraudulent schemes that dog consumers.
“We get reports all the time about people purchasing items and not receiving them, or getting a tiny trinket in place of what they actually ordered,” Johnson said. “Around Halloween, people were ordering these tall skeletons online. But they got a T-shirt or a ring instead. More recently people have been ordering artificial Christmas trees, but what they get can fit in the palm of their hand.”
Scammers do that because of rules set by some of the cash apps people use for online purchases, Johnson said.
“As long as something is delivered, the seller is not culpable, even if it’s not the item you actually purchased,” she said.
It’s amazing how easy it is to deceive online, and how quickly scammers can steal people’s information and money, Johnson said.
“They buy stolen credit cards off the dark web, from data breaches we don’t even know about. We don’t realize how much of our information is out there,” she said. “Many of the scammers are halfway around the world. The Federal Trade Commission and other government organizations try to get people their money back, but it can be impossible.”
The Federal Trade Commission reports that only about 5 percent of victims report scams, Johnson said.
“A lot is out of embarrassment — people who have lost money are ashamed to talk about it. But they are being targeted. Highly educated people fall victim to these scams,” she said.
What strikes her about scammers is “their ability to prey upon people’s emotions,” Johnson said. “This is particularly true with online pet scams and romance scams. We often ignore the red flags in these circumstances because it’s something we want … At Christmas, we may get so excited when we see a product that’s sold out in stores that we are more likely to fall for deals that are really too good to be true.”
All age groups reported losing more money last year than the previous year, BBB found. The median loss was highest, $200, among people 65 and older. Those aged 25 to 34 were not far behind, with a median loss of $175.
Women reported 68 percent of all the online purchase scams to BBB. Men reported only 32 percent of the scams but lost significantly more money than women in 2022, as they have in past years, according to the BBB report.
Sadly, about a third of consumers reported a loss of confidence and diminished well-being after they were targeted by scammers, the report found.
Johnson offered a few tips.
First, make sure you know what business you’re doing business with, she said.
“Research research, research. Check www.BBB.org. If the business is not listed there, Google the name of the business with the word ‘scam.’ See what you find.”
Second, many scams this holiday season involve texts and emails that pretend to come from Amazon, Walmart, FedEx and other well-known companies, so be cautious.
“Do not click on a link unless you know where it’s coming from or where it will lead,” Johnson said. “There’s a law that companies can’t contact you by text unless you sign up for that communication. So if you get a text you didn’t sign up for, don’t open it.”
Third, take a close look at the web address, or URL.
“Make sure it says ‘https’ and not just ‘http.’ The ‘s’ at the end stands for ‘secure,’” Johnson said. “And make sure the little lock symbol is in the browser bar at the top.”
The BBB encourages people to use its Scam Tracker, Johnson said.
“It allows us to see which scams are popular at a given time. And people can see the kind of things that are going on in their town and the state,” she said. “When we see a pattern of scams we can take it to the state attorney general or the Department of Consumer Protection or police or a federal agency. But it only works if people report it. We have to educate each other.”
The BBB was the subject of a recent CNNMoney investigation that questioned BBB’s rating system for member businesses, finding that more than 100 businesses had top BBB ratings even though government regulators have taken serious actions against them.