Online shopping tends to increase significantly during the holiday season, but unfortunately, so does fraud.
Online vendor scams, also called shopping scams, occur when fraudsters pretend to be legitimate online sellers, using tactics such as fake advertisements or websites. This type of fraud frequently happens during the holiday season because scammers aim to use the dramatic surge in online shopping to their advantage. However, remember that these scams can also occur anytime during the year.
Fraudulent websites and ads often offer items such as popular clothing brands, luxury handbags, and electronics at lower prices. Typically, you will never receive the item you purchased. Sometimes, however, you may receive a knockoff version of whatever you ordered, which is still a scam because you did not receive the item you purchased.
Five common warning signs of Online Vendor Scams include:
- Method of payment: Scammers will often request payment via money order or pre-loaded money card, but if you send your money this way, it will be almost impossible to trace down the scammer and reverse the transaction. Plus, you’ll never receive whatever item you think you purchased.
- Bad reviews on other websites: One easy way to detect a fake seller or social media online shopping scam is by searching for reviews before purchasing – but not reviews on the potentially fake website itself, as these reviews could also be fake. We’ll get more into this on the next point. If you see bad reviews about a particular vendor on another website, primarily reviews saying not to trust a specific seller, this is a significant warning sign you should NOT ignore.
- Seemingly perfect reviews ON vendor’s website: While bad reviews can be a sign of a vendor scam, so can reviews on a website that seem almost too perfect. Some signs of fake reviews could include similar keywords in multiple reviews, positive but never specific reviews, or when there are numerous reviews within a short time frame. A scammer will say whatever they can to trick people into falling for their schemes!
- Questionably low prices: If a product is advertised at a much lower price than the market average or advertised to have benefits that seem too good to be true, this is more than likely a scam. It’s always best to trust your gut.
- No social media presence: This could be a major red flag if a vendor has no social media presence. In today’s day and age, legitimate businesses typically have at least one social media platform. No social media accounts could signify a fraudster who doesn’t want to be traced down or reported.
If you suspect you may have been scammed, we recommend first contacting the retailer to see if there is a valid reason for the problem. Especially during the holiday season, it is common for there to be delays in shipping. However, if the response seems sketchy, you can contact your financial institution and dispute the charge.
You can also report these scams to the Federal Trade Commission, your state attorney general, or your state’s consumer protection agency.