Don't Get Caught Out
In hindsight, there were some red flags. But the offers on the barbecue website bbqarena.com.au were too good to pass up – several hundred dollars off a Weber barbecue. Enticed by the large (but not too large) discounts on a range of reputable brands and the site’s apparent legitimacy, numerous buyers clicked through to the purchase button. They were then prompted to pay by bank transfer. Three weeks later, still no delivery. When they called to follow up, no one answered the phone and the website was ‘down for maintenance’.
Like more than 1000 other Australians in the first eight months of 2017, the would-be barbecue owners had been scammed by a fake online shopping site posing as the real thing. “Please don’t make the same mistake I did,” wrote one in an online forum recently. “One important thing when buying online from an unknown (to you) seller is to ask on forums like this. More than likely someone else will have had some experience and advise a No Go,” wrote another.
The Australian Competition and Consumer Commission (ACCC) receives more reports each year about online shopping scams than any other scams. Australians lost more than $700,000 this way in the first eight months of 2017 alone. While people of all ages are likely to fall victim – people aged 25 to 34 make up the largest category, with women more prone to being scammed than men.
Executive director of the Australian Retailers Association, Russell Zimmerman, this number is set to rise as online shopping gains popularity. Australians now spend about $24 billion a year shopping online, representing about 7.5% of all retail turnover. Online shopping is predicted to increase to about 12% of turnover and then plateau. “Everybody is doing more online shopping – it means you don’t have to go out to get your goods,” Zimmerman says. “There are very strict guidelines in place for retailers in Australia, but often online you’re dealing with retailers from overseas. The only real way to protect yourself is to either deal with someone who has been recommended to you, or deal with an organisation that’s readily recognised.”
The reality is, unlike face-to-face shopping, the very appeal of online shopping is its ease, and it’s this laid-back simplicity – and the lapse in caution that comes with it – that allows scammers to target and lure their victims into thinking they and their money are safe.
In hindsight, there were some red flags. But the offers on the barbecue website bbqarena.com.au were too good to pass up – several hundred dollars off a Weber barbecue. Enticed by the large (but not too large) discounts on a range of reputable brands and the site’s apparent legitimacy, numerous buyers clicked through to the purchase button. They were then prompted to pay by bank transfer. Three weeks later, still no delivery. When they called to follow up, no one answered the phone and the website was ‘down for maintenance’.
The would-be barbecue owners had been scammed by a fake online shopping site posing as the real thing. “Please don’t make the same mistake I did,” wrote one in an online forum recently. “One important thing when buying online from an unknown (to you) seller is to ask on forums like this. More than likely someone else will have had some experience and advise a No Go,” wrote another.
With New Zealanders having spent $3.8 billion online last year, and online shopping growing at a ‘double digit’ rate, some are falling victim to shopping scams and tricks.
Executive director of the Australian Retailers Association, Russell Zimmerman, this number is set to rise as online shopping gains popularity. Australians now spend about $24 billion a year shopping online, representing about 7.5% of all retail turnover. Online shopping is predicted to increase to about 12% of turnover and then plateau. “Everybody is doing more online shopping – it means you don’t have to go out to get your goods,” Zimmerman says. “There are very strict guidelines in place for retailers in Australia, but often online you’re dealing with retailers from overseas. The only real way to protect yourself is to either deal with someone who has been recommended to you, or deal with an organisation that’s readily recognised.”
Netsafe, a non-profit organisation that assists victims of online scams, received over $13 million reports of losses from online scams in 2015. The average loss was $12,995 with the highest loss being $2.1 million.
The World of Fake Websites
The message is clear – online shopping scammers are successful thanks to their ability to hide behind fake websites. Using the latest technology, scammers can create a site that looks like a genuine online retail store. They will often advertise these sites on Google, so when you search for a product they will pop up at the top of your results page. More often than not, these online stores are replicas of large stores that you’re familiar with, created using stolen logos, or they have sophisticated, high-end designs. They may have a ‘.co.nz’ at the end of the address, but their NZBN will be fake.
Often those unscrupulous traders are based overseas, making the chance of a shopper getting their money back low.
The Commerce Commission’s Consumer Issues 2016/2017 report found around 20 per cent of ‘.co.nz’ websites were registered to individuals based abroad, which is lulling some online shoppers into a false sense of security, believing they are dealing with a New Zealand–based company.
The swindle works because you trust everything is above board – you make your purchase in good faith but the product never arrives.
Back in June, two Latvian nationals living in Queensland, Australia, were arrested and charged after they set up 28 fake sites selling heavily discounted outdoor furniture, barbecues, marine motors and fitness equipment, with some items worth as much as $5000. The Queensland Police Service has alleged shoppers received what looked like genuine invoices and paid for the products with credit cards or bank transfers, but the goods were never delivered and their money disappeared overseas. It believes more than 200 people lost a total of A$250,000 in the scam. “We’re living in an environment where everyone wants a bargain,” said Detective Sergeant Kris Steadman. “I think if a deal’s too good to be true, it probably is.” Steadman urged online shoppers to restrict their buying to trusted websites and to pay using services that included buyer protection, such as PayPal.
The message is clear – online shopping scammers are successful thanks to their ability to hide behind fake websites. Using the latest technology, scammers can create a site that looks like a genuine online retail store. They will often advertise these sites on Google, so when you search for a product they will pop up at the top of your results page. More often than not, these online stores are replicas of large Australian stores that you’re familiar with, created using stolen logos, or they have sophisticated, high-end designs. They may have a ‘.com.au’ at the end of the address, but their ABN will be fake.
The swindle works because you trust everything is above board – you make your purchase in good faith but the product never arrives.
Back in June, two Latvian nationals living in Queensland were arrested and charged after they set up 28 fake sites selling heavily discounted outdoor furniture, barbecues, marine motors and fitness equipment, with some items worth as much as $5000. Queensland Police have alleged shoppers received what looked like genuine invoices and paid for the products with credit cards or bank transfers, but the goods were never delivered and their money disappeared overseas. Queensland Police believe more than 200 people lost a total of $250,000 in the scam.
“We’re living in an environment where everyone wants a bargain,” said Detective Sergeant Kris Steadman. “I think if a deal’s too good to be true, it probably is.” Police investigations into the fake trader website scam are expected to continue interstate and take up to two years. Steadman, speaking at the time of the pair’s arrest on June 27, urged online shoppers to restrict their buying to trusted websites and to pay using services that included buyer protection, such as PayPal.
Trading Sites
Fake sellers are having alarming success posing as genuine sellers on trading sites, often advertising prices much lower than everyone else. They might also approach you through social media or email with appealing offers and posts of pictures of the item they are purporting to sell (often copied from someone else’s genuine advertisement). The terms seem reasonable enough – pay up-front before receiving the item. Your suspicion isn’t aroused until you start getting excuses on why they can’t accept payment through the secure site – they say they are travelling or have moved overseas, for example – so they ask you to transfer funds directly to them.
The goods advertised this way can be anything, from pets to used cars, boats and even holidays. That’s what happened back in April when Nelson woman Mary Bier almost fell victim to a scam buyer when she posted her Suzuki scooter for sale on Trade Me for $2250. According to a report about the incident in Stuff.co.nz, when Bier listed the scooter, she received interest from a buyer who was happy to pay the asking price. To secure payment, the buyer – who had a US address – asked her to join PayPal, so they could deposit the money that way. After setting up a PayPal account, the buyer’s demands began to ‘smell bad’. She eventually terminated the sale, but not before the buyer asked her to pay $750 for a pick-up agent, promising to refund the money into her PayPal account along with the original purchase price of $2250.
Fortunately, the 73-year-old Bier wasn’t fooled by this bizarre request. “Why on earth would I have to pay anything before I get my money?” she told Stuff.co.nz. Her bank confirmed it was a scam, and that other, more trusting sellers, hadn’t been as smart.
“You should never pay by Western Union, telegraphic transfer, bank transfer or overseas money order in order to complete a trade you made on Trade Me,” the online auction site advises. “Everyone on Trade Me must have a New Zealand bank account.”
Fake sellers are having alarming success posing as genuine sellers on trading sites, often advertising prices much lower than everyone else. They might also approach you through social media or email with appealing offers and posts of pictures of the item they are purporting to sell (often copied from someone else’s genuine advertisement). The terms seem reasonable enough – pay up-front before receiving the item. Your suspicion isn’t aroused until you start getting excuses on why they can’t accept payment through the secure site – they say they are travelling or have moved overseas, for example – so they ask you to transfer funds directly to them.
The goods advertised this way can be anything, from pets to used cars, boats and even holidays. That’s what happened last year when Perth mother Sarah Vardy lost nearly $6000 when she tried to buy a puppy for her daughter’s 16th birthday through the Trading Post online classifieds. The scammer was posing as a breeder of cavoodle puppies and asked Sarah some convincing questions, appearing to establish that the dog was going to a good home. They also sent photos of the puppy and an ABN, which later turned out to be false.
Her mind at ease, Sarah transferred $1100 to a bank account for the puppy and interstate travel. She then received a phone call asking for $1800 for immunisation and puppy insurance, followed by another demand for $3000 for a climate-controlled crate. When she called to question the amount, she was reassured the puppy was on its way. The minute she’d transferred the money, she knew she had been scammed.
