Identifying holiday scams has become more challenging, especially for online shoppers. Here are some tips on how to avoid falling victim to fraudulent schemes.
Melanie Duquesnel believed that wearing sequined trousers would bring a touch of glamour to the Hob Nobble Gobble fundraiser in Detroit.
Shiny tanks, dresses with sequins, and sparkly pants are very popular this holiday season. However, when Duquesnel received the package she ordered from Old Navy online, she found that the sparkly pants were a bit too flashy and reminiscent of disco style for her taste.
Duquesnel, the president and CEO of Better Business Bureau Serving Eastern Michigan, immediately felt overwhelmed by the '70s style vibes they exuded, causing her to think, "I can't handle this."
The woman's experience with holiday shopping ended well. She was able to return the pants she purchased online to a physical Old Navy store nearby and was given a complete refund.
Regrettably, not all individuals will experience joyful returns during this holiday season.
Challenges faced by online shoppers during the holiday season
Online scams can include fake products or orders that are never delivered. Two common issues for online shoppers are unreasonable return policies and vendors who vanish when issues arise.
Duquesnel emphasized the importance of knowing the seller, their return policy, and what steps to take if things don't go as expected during the purchase process.
Seeing a bargain on Facebook can be risky if you don't do your due diligence by researching the offer, looking into any possible complaints, checking the company's legitimacy, and reviewing feedback on sites like BBB.org.
According to a warning from the Better Business Bureau, scammers tend to target popular brands like Nike, NFL, Apple, Louis Vuitton, Tiffany, and LEGO.
Duquesnel mentioned that people should not automatically assume that something is true just because it is found online.
Prior to making a purchase online, it is advised to search the website name along with keywords like "complaints," "reviews," and "scam" to read feedback from other customers. The Better Business Bureau also suggests looking at the "About Us" or "Contact Us" section on the website to verify the company's legitimacy. Make sure the website provides legitimate contact information, as it can be suspicious if the only way to reach the seller is through a form.
Relying on trust based on association alone is not a wise approach. It is important to take the time to conduct research on anyone you collaborate with, according to Duquesnel.
The National Retail Federation predicts that online shopping will continue to rise in popularity, marking a significant change in consumer habits due to the impact of the COVID-19 pandemic. They anticipate that online and non-store sales will increase by 7% to 9% during the holiday season, surpassing the $255.8 billion in sales from the previous year.
Despite the convenience of online shopping, it is still a breeding ground for scammers who deceive consumers through fake websites, selling fake products, and causing alarm through misleading phone calls or messages about issues with orders or deliveries.
Beware of fake advertisements that may deceive many people this year. Consumers are advised to be cautious of amazing gift ideas, rare products, and unbelievable discounts that appear on social media sites like Instagram and Facebook.
The BBB Scam Tracker has been flooded with complaints from online shoppers regarding deceptive ads on Facebook and Instagram. The Federal Trade Commission cautions that scammers are using social media platforms to carry out their fraudulent activities.
According to the FTC, one out of every four people who have experienced financial losses due to fraud since 2021, including a significant number of individuals in their twenties, stated that the fraudulent activity began on social media. The total reported monetary losses from scams on social media amounted to $2.7 billion, which is significantly greater than losses through any other means of communication. Consumers are being deceived by both online shopping scams and investment scams that originate on the internet.
According to the FTC, during the first half of 2023, over 50% of the funds lost to fraud on social media were due to fake investment schemes.
Adolescents and young adults in their late teens and early twenties who frequently make purchases online may be at risk of being exploited
According to the FTC, in the first half of the current year, a significant number of consumers between the ages of 20 and 29 reported losing money to scams that originated on social media platforms around 38% of the time.
Customers are expressing dissatisfaction with online purchases, such as clothing, electronics, and other products, that they ordered but never received.
Scammers make impressive advertisements and websites that mimic well-known brands, often fooling consumers into believing they have come across a great deal.
However, it's important to keep in mind that anyone has the ability to take a picture of a Nintendo Switch OLED or PlayStation 5 and share it online for a price that may tempt you to quickly make a purchase with your credit card.
There is a risk that if you make a purchase, you may not actually receive the item you ordered. The Better Business Bureau has issued warnings about instances where customers have ordered a gaming console at a discounted price, only to receive a completely different item such as a phone cover or small accessory instead.
As holiday shoppers begin to plan out their shopping lists well in advance, scammers have also been preparing to deceive and steal from them for months. Teresa Murray, who leads the Consumer Watchdog office for U.S. PIRG, warns that con artists are already scheming ways to exploit unsuspecting consumers during the holiday season.
This year, we are advising individuals to approach advertisements on Instagram, TikTok, and Facebook with a high level of caution," Murray stated. "Scammers can easily pose as legitimate sellers on social media platforms and disappear once they have taken your money."
Some customers have expressed dissatisfaction on the internet after coming across images on Instagram promoting vibrant clothing that appear to be created by AI. A number of these customers have reported receiving items that were significantly different from what they expected when they purchased them at a discounted rate. Additionally, the reuse of the same images on various websites is a major warning sign.
You may come across an advertisement from what seems to be a small company selling cute jewelry, T-shirts, or unique items. The seller mentions that a portion of the sales will be donated to a charity that assists in rescuing animals, supporting foster children, or backing another cause. The Better Business Bureau cautions that some customers have received personal messages from sellers promoting their products and requesting them to share with their loved ones.
Once more, the main concern for those who expose these scams is that the products are never received. When attempting to reach out to the company, they are either unreachable or provide unhelpful automated replies.
The Better Business Bureau cautioned in early November that the product was never actually real.
Additional: The new INFORM Consumers Act aims to combat the sale of counterfeit products online. Here is an explanation of how the act operates
Beware of counterfeit products and incredibly low prices. An indication of potential fraud is when prices seem significantly lower than the actual retail price, with discounts ranging from 30% to 50% off.
According to consumer protection organizations, there have been instances of misleading ads on Facebook and Instagram this year, where they falsely appeared to be from a reputable company promoting clearance sales with discounts of up to 90% on last year's products. However, customers who fell for these ads were disappointed to receive damaged products, counterfeit items, or nothing at all.
Duquesnel mentioned that if something is priced very low, it is likely to be a counterfeit product.
When people think of counterfeit products, they often think of knockoff designer handbags, luxury items, electronics, and jackets with fake logos. However, the range of counterfeit goods available online is much wider than just those items.
Kari Kammel, who directs the Center for Anti-Counterfeiting and Product Protection at Michigan State University, stated that counterfeiters can replicate any product that carries a brand name.
Kammel, who spoke to the Detroit Free Press as part of the USA TODAY Network, mentioned that counterfeiting occurs in a wide range of industries and product categories.
According to her, people shopping for gifts during the holiday season should be aware that fake products sold online can range from toys and bikes to clothing and electronics. The concern is that these items may not be made or stored correctly.
In October, Kammel spoke in front of the Senate during the Shop Safe Act hearings to push for measures to reduce the sale of harmful fake products on online platforms. She mentioned that trademark counterfeiting has been a longstanding issue, but it has significantly worsened with the rise of online shopping.
Kammel emphasized the importance of holiday shoppers being aware of the sellers they are purchasing gifts from online.
Numerous online platforms such as Amazon, Walmart, and Target host third-party marketplaces where individuals or businesses not directly affiliated with the manufacturer can sell popular products. This practice can pose risks, as pointed out by Kammel.
The seller may also be an individual who is selling items from their basement.
Saleem Alhabash, a professor of advertising at MSU and associate director for research for MSU’s Center for Anti-Counterfeiting and Product Protection, suggests that considering the brick-and-mortar shopping experience compared to online shopping involves understanding that physical stores have limited shelf space which is filled based on market supply and demand.
Alhabash mentioned that online, there is an infinite amount of space available for products to be displayed and sold.
According to him, online marketplaces have provided small businesses and entrepreneurs with opportunities to sell their products directly to customers. However, this has also made it easier for scammers to take advantage of the platform.
The problem with counterfeit products is that many sellers are individuals who are making and selling items that do not meet the manufacturer's standards.
Customers frequently do not receive equal levels of quality or safety standards.
Kammel mentioned that not all third-party sellers are malicious or attempting to sell fake products, but it is also difficult to verify the source of their products.
According to Kammel, the best way to purchase multiple items safely is to buy them from the official website of the manufacturer or brand. It is important to check the website URL and watch out for any misspellings to ensure that you are not falling for a scam by someone pretending to be a well-known brand.
She mentioned that it might be slightly more expensive or take a bit longer to receive the product by purchasing directly from the manufacturer, but customers can have more trust that they are getting an authentic item, rather than a counterfeit one.
Before making a purchase from a third-party seller on popular websites like Amazon, it is recommended to thoroughly research the seller. While some sellers may be licensed retailers, consumers may not have any information about the other sellers on the platform.
The name of the seller can be located on the product page next to the button for purchasing an item, along with details such as the seller's location.
When looking for a specific item like a bicycle helmet online, you may come across multiple sellers offering the same product on various online platforms. However, it is important to be cautious when buying from a seller with a questionable name like CheapPetStuff, as it could indicate that they are not a trustworthy or legitimate seller.
When browsing through numerous listings for a certain product, she explained that some consumers may choose to organize them by price in order to locate the cheapest option.
Kammel explained that sometimes counterfeiters will slightly lower their prices compared to the genuine manufacturer in order to attract customers who are specifically looking for the lowest price.
If you have been sold fake products by a seller, make sure to inform the online platform where you made the purchase and report the incident to the FTC through reportfraud.ftc.gov.
If you suspect that you have bought a fake or imitation product, you can report it to the U.S. Consumer Product Safety Commission at SaferProducts.gov or by calling 800-638-2772. Any issues with counterfeit drugs, food, or other items regulated by the Food and Drug Administration can be reported to the FDA.
For questions or inquiries about personal finance, reach out to columnist Susan Tompor via email at stompor@freepress.com. Stay updated on her insights and news by following her on Twitter @tompor.
GIPHY App Key not set. Please check settings