This year has been a lucrative one for scammers. As of late September, more than 200,000 complaints of scams and fraud had been filed, and more than $145 million had been lost by Americans in COVID-19 scams. That’s a ton of money.
Part of the problem is the pandemic. COVID-19 has caused a spike in online scams over the last several months, and as we get closer to the holiday season, scammers are kicking into high gear. It’s easy to become a victim of an online scam right now — especially if you aren’t careful.
You need to arm yourself with as much information as possible to avoid being taken for a ride. We’ve already seen a bunch of online scams this year — and some new data from the Better Business Bureau (BBB) is proof that you need to watch your back while shopping online this holiday season.
A spike in online scams
According to the BBB, there has been a massive spike in online purchase scams since COVID started. Online scams made up just 13% of scams reported with a monetary loss in 2015. That number jumped to 64% in 2020 — a 51% increase in just five years.
The number of online scams isn’t the only thing that’s increasing, though. The number of people who have lost money to these scams has also skyrocketed. About 80.5% of online scam victims reported losing money in 2020 — up from 71.2% in 2015.
The median dollar loss for this type of scam increased during 2020, too. This year, the average amount each victim lost to scams was $93. That average was $76 just one year ago.
According to the BBB, the top reason people lost money to these scams was the enticement of sale prices. Crooks offered high demand products at a significantly reduced dollar amount, which increased the desire to purchase the item. Once the purchase was made the buyers either never received it, got the wrong product, or had overcharges, extra fees, or recurring charges tacked on.
That’s just one of the tricky techniques being used. Other common tactics involve using fake emails, phishing schemes and fake landing pages to lure in unsuspecting victims. In other words, there’s a ton of underhanded behavior to watch out for online.
There’s more data worth noting in the BBB report, too — including who’s most at risk for being scammed.
BBB data shows you’re most at risk for online purchase scams if:
- You’re between the ages of 35-44
- You’re a younger consumer
- You’re a service member, military spouse or veteran
- You’re an older adult. While older adults are less at risk of being victimized, they’re at risk of losing more money if they fall victim to a scam
This information is important because we’re not just in the middle of a pandemic right now. We’re also in the middle of the holiday shopping rush — which adds to the risk of becoming a victim via online shopping scams. With COVID driving many people to shop online this year, it’s a perfect time for criminals to target online shoppers.
If you’re going to shop online this year, you need to take some measures to protect yourself. Otherwise, you could lose money before you even realize you’re being targeted.
How to protect yourself from online scams
There are a number of ways to protect yourself from online scams, but the top one is to go with your gut. If something feels off about a transaction, it probably is. Don’t risk a financial catastrophe to save a few bucks. Trust your instincts instead.
You should also:
- Avoid clicking and shopping on ads that pop up on social media. According to the BBB, social media platforms like Facebook are plagued by scammers, so don’t just click and order if you see a good deal on an item you’ve been looking for. Scammers on social media have access to the same tools that legitimate businesses have to target customers, so it’s hard to parse out the fakes. It’s best to avoid this type of shopping altogether or go directly to the website instead.
- Be wary of deals that look too good to be true. Cheap deals on expensive items are almost always a sure sign of a scam, so don’t shop on price alone. Do your homework before buying from an unfamiliar website just because it’s cheap.
- Watch out for fake websites. If you’re shopping on an unfamiliar site or via a link, be sure to check the URL for errors and inconsistencies, which are a sure sign of a scam site. Watch for bad grammar. Beware of odd domain names. Search for accessible contact information. Read online reviews about the company or website.
- Do your homework. Out of the 57% who did not research the website or business via an independent source before making a purchase, 81% lost money.
- Only use secure and traceable transaction methods. Is a website asking for payment by wire transfer, prepaid money card, gift card, or other non-traditional payment methods? Don’t do it. It’s probably a scam. Reputable sites will offer better ways to pay — methods that protect the customer during the transaction.
- Check to make sure the website is secure. Look for “HTTPS” in the URL (the extra “s” is for secure) and a small lock icon on the address bar. Never enter payment or personal information into a website that starts with only “HTTP” — if you see that, the site is not secure.
Follow these simple safety precautions and you’ll be able to shop online confidently this holiday season. Believe it or not there are already great bargains to be had out there.