It is becoming increasingly difficult to identify holiday scams. Here are some tips for online shoppers to avoid falling victim to scammers.
Melanie Duquesnel believed that wearing a pair of sequined pants would bring a touch of glamour to the Hob Nobble Gobble fundraiser in Detroit.
Shiny tank tops, dresses with sequins, and sparkly trousers are popular choices for holiday outfits. However, when Duquesnel received her online order from Old Navy, she found that the sparkly pants were too reminiscent of disco fashion for her taste.
Their appearance and demeanor gave off a strong 1970s vibe, leading Duquesnel, the president and CEO of Better Business Bureau Serving Eastern Michigan, to immediately think, "I cannot handle this."
Despite some challenges during her holiday shopping, she had a positive outcome. She was able to return the pants she purchased online to a physical Old Navy store nearby and got a complete refund.
Regrettably, not all individuals will have a joyful experience with their returns during the holiday season
Challenges during the holiday season for shoppers who buy online include receiving counterfeit products or never receiving their purchases at all. Two major issues for online shoppers are unreasonable return policies and vendors who disappear when issues arise.
Duquesnel emphasized the importance of knowing the seller's background, understanding their return policy, and having a plan in place in case things don't go as expected.
Coming across a discounted offer on Facebook can be dangerous if you don't spend time looking into the deal, checking for any complaints, like the ones found on BBB.org, and making sure the company is trustworthy.
The Better Business Bureau has warned that scammers often target popular brands such as Nike, NFL, Apple, Louis Vuitton, Tiffany, and LEGO.
Duquesnel emphasized that just because something is posted on the internet, it doesn't automatically make it accurate.
Prior to making a purchase online, it is advised by experts to search for the website's name along with keywords like "complaints," "reviews," and "scam" to gather information from other customers. The Better Business Bureau suggests examining the "About Us" or "Contact Us" section on the company's website before making a purchase to ensure legitimacy. Look for genuine contact information on the website as it is suspicious if the only option for reaching the seller is through a form.
Relying on trust by association is not a recommended approach. It is important to take the time to research anyone you collaborate with, as emphasized by Duquesnel.
According to the National Retail Federation, online shopping is becoming more and more popular and is considered one of the major changes in consumer behavior as a result of the COVID-19 pandemic. The organization predicts that online and non-store sales will increase by 7% to 9% during the holiday season, compared to the $255.8 billion in sales from the previous year.
Despite efforts to combat fraud, online shopping continues to be a target for scammers who set up fake websites, sell fake products, and cause alarm by contacting customers to report issues with their orders or deliveries.
Deceptive advertisements are likely to deceive many individuals this year. Consumers are being advised to be cautious of amazing gift suggestions, rare products, and unbelievable bargains that appear on social media sites like Instagram or Facebook.
The BBB Scam Tracker has gathered numerous complaints from online shoppers regarding deceptive ads on Facebook and Instagram. The Federal Trade Commission cautions that scammers are using social media platforms to deceive consumers.
According to the FTC, 25% of individuals who have experienced financial losses due to fraud since 2021, particularly younger consumers in their 20s, mentioned that the fraudulent activity initiated on social media. The total reported monetary losses from scams on social media amounted to $2.7 billion, surpassing losses from any other communication method. Consumers are falling victim to 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 money lost to fraud on social media was due to fake investment schemes.
Adolescents and young adults in their late teenage years and early twenties who frequently make purchases on the internet may be at risk
According to the FTC, in the first half of this year, consumers between the ages of 20 and 29 reported that they were scammed on social media platforms 38% of the time and lost money as a result.
Customers are expressing dissatisfaction with receiving online orders of clothing, electronics, and other goods that were never delivered.
Scammers design impressive advertisements and websites that imitate well-known brands, often convincing consumers that they have come across an amazing deal.
Just a reminder, it's possible for someone to take a picture of a Nintendo Switch OLED or PlayStation 5 and share it online at a tempting price that may lead you to quickly make a purchase with your credit card.
There have been reports of customers not receiving their packages after ordering them. Additionally, the Better Business Bureau has cautioned that some consumers have ordered a gaming console at a discounted price and received a completely different item, such as a phone cover, in the package instead.
As holiday shoppers begin to make their shopping lists weeks in advance, scammers have likely been strategizing their schemes for months. Teresa Murray, who leads the Consumer Watchdog office for U.S. PIRG, warns consumers to be vigilant against potential scams.
This year, we are encouraging consumers to be extremely cautious when viewing ads on platforms like Instagram, TikTok, and Facebook," Murray emphasized. "It is very simple for scammers to pose as sellers on social media and disappear once they have taken your money."
Some customers have expressed their dissatisfaction online after coming across images on Instagram promoting vividly colored clothing that appear to be created by AI. These customers have reported receiving items that don't match their expectations after making a purchase at a discounted price. Additionally, the repeated use of the same images across various websites is a major cause for concern.
You may come across an advertisement from a seemingly small business selling cute jewelry, shirts, or unique items. The seller mentions that a portion of the sales will be donated to a charity that aids in rescuing animals, supporting foster children, or other causes. The Better Business Bureau cautions that some customers have received messages from sellers promoting their products and requesting them to share with others.
However, the major concern for individuals who report these scams is that the products they ordered are never received. When attempting to reach out to the company, they are unable to be contacted or only receive unhelpful automated responses.
The Better Business Bureau cautioned in early November that the product was never actually real.
Additional: The newly introduced INFORM Consumers Act aims to tackle the issue of counterfeit products being sold online. Here is how it operates.
Beware of counterfeit products being sold online at incredibly low prices. These fake goods can be priced 30% to 50% lower than the authentic products.
According to consumer advocacy groups, there have been reports of misleading Facebook and Instagram ads this year that mimic popular brands and offer significant discounts of up to 90% on last year's inventory. However, many customers who fell for these ads were disappointed to receive either damaged products, counterfeit items, or nothing at all.
Duquesnel mentioned that if something is priced very low, it's likely to be counterfeit.
When considering counterfeit products, people often think of fake designer handbags, luxury items, electronics, or discounted jackets with popular sports team logos. However, the range of counterfeit goods available online extends well beyond these typical items.
Kari Kammel, who is the director of Michigan State University's Center for Anti-Counterfeiting and Product Protection, stated that any item with a brand name can be illegally copied and sold as a counterfeit product.
Kammel, speaking to the Detroit Free Press, mentioned that counterfeit products can be found in a wide range of industries and product categories.
According to her, people shopping for gifts during the holidays should be aware that counterfeit products available online can range from toys, bikes, helmets, clothing, electronics, and other potential presents. The concern is that these items may not be made or treated correctly.
During the Senate's Shop Safe Act hearings in October, Kammel spoke about the need to reduce the sale of harmful counterfeit products on online platforms. She explained that trademark counterfeiting has been a long-standing issue, but has become more widespread due to the increasing popularity of online shopping.
Kammel emphasized the importance of holiday shoppers being aware of the sellers they are purchasing from when looking for gifts online.
Numerous websites such as Amazon, Walmart, and Target have third-party marketplaces where individuals who are not the original manufacturers can sell popular products. This poses a significant risk, according to Kammel.
The seller may also be an individual who is selling items from their basement.
When comparing shopping in physical stores to online shopping, it's important to understand that stores have a limited amount of space to stock products based on what is in demand in the market. This was explained by Saleem Alhabash, a professor of advertising at MSU and associate director of research at MSU's Center for Anti-Counterfeiting and Product Protection.
On the internet, there is virtually unlimited space available for products to be displayed and sold, as explained by Alhabash
According to him, online marketplaces have provided benefits for small businesses and entrepreneurs to sell their products directly to customers. However, it has also made it easier for scammers to take advantage of the system.
The problem with counterfeit products is that many sellers are individuals who are deliberately selling items that do not meet the manufacturer's quality standards.
Customers may not always receive consistent quality or safety standards.
According to Kammel, not all third-party sellers are dishonest or selling fake products, but it's also difficult to determine 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 carefully check the website's URL and look for any signs of deception, such as misspelled words, to ensure that the website is not being operated by a scammer pretending to be a well-known brand.
She mentioned that it might be slightly more expensive or take a bit longer to purchase directly from the manufacturer, but consumers can feel more assured that they are receiving an authentic product rather than a counterfeit one.
When purchasing from a third-party seller on popular websites such as Amazon, it is important to thoroughly research the seller. While some authorized retailers may be included, consumers may not be aware of the identities of other sellers.
The name of the seller can be found on the product page close to the button for purchasing the item, along with other key details such as the seller's location.
When looking for a specific item like a bicycle helmet online, you might come across 30 different sellers offering it on various online platforms. However, it's important to consider the credibility of the seller before making a purchase. For example, if a seller goes by the name CheapPetStuff, it could be a red flag that they may not be a trustworthy source.
Upon viewing numerous listings for a particular product, she explained that some customers may choose to organize them by price in order to locate the most affordable option.
Kammel explained that in certain situations, counterfeiters will slightly lower the price compared to the genuine manufacturer by one cent, as they are aware that consumers often search for products based on price.
If you have received fake products from a seller, make sure to notify the online platform where you made the purchase and report the situation to the Federal Trade Commission (FTC) at reportfraud.ftc.gov.
If you suspect that you have bought a fake or imitation product, you can notify the U.S. Consumer Product Safety Commission through SaferProducts.gov or by calling 800-638-2772. Issues related to counterfeit drugs, food, and other items regulated by the Food and Drug Administration can be reported directly to the FDA.
To get in touch with personal finance columnist Susan Tompor, you can email her at stompor@freepress.com. You can also follow her on Twitter @tompor for updates.
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