Watch out for fake online deals and avoid scammers this sales season

Australians have already lost about $12.9 million to online shopping including classifieds scams so far this year, and the ACCC is urging consumers to watch out for dodgy deals as pre-holiday sales approach.

Scamwatch has received over 26,000 reports of online shopping scams, more than the total reported through all of 2020. This is consistent with global trends from 2020 as more people shop online during the pandemic.

"This is a very busy time of year, and scammers often try to take advantage of unsuspecting shoppers rushing to organise gifts," ACCC Deputy Chair Delia Rickard said.

"People are often searching for the best deals online, especially in the Black Friday and Cyber Monday sales, so it's easy to be caught off guard and fall for a scam."

In an online shopping scam, scammers create realistic looking fake online stores selling items at heavily discounted prices, however the items are fake, or never delivered to buyers.

Scammers have also created fake stores on social media platforms or post fake ads on legitimate classifieds websites. They may request payment or offer discounts for payments made through direct bank transfers or cryptocurrency.

"Before you buy, it's important to be aware of the possibility of scams. While some scammers try to make online stores look legitimate by requesting payment via PayPal or credit card, always double check that the real PayPal platform is being used. Be suspicious of too good to be true offers and any sellers that ask you to pay by bank transfer, gift cards or cryptocurrency," Ms Rickard said.

"Research the seller and make sure you know who you are buying from. Search online for the product or company name, plus "complaint" or "scam" to see what other people are saying. If you are buying from a social networking site, check the seller's history and read reviews from other people who have dealt with them."

"When you're paying, avoid arrangements that ask for up-front payment via bank transfer, or payment through digital currency, like Bitcoin. Always try to use a secure payment service such as PayPal or credit card transaction," Ms Rickard said.

If you're waiting for your parcel, remember that scammers also take advantage of people expecting deliveries.

"Australia Post and other parcel delivery companies will never email, call or text you asking for personal or financial information or a payment. Many delivery companies have apps where you can track your parcels rather than clicking on links in messages or emails," Ms Rickard said.

Losses to online shopping scams are spread across most age groups, but people aged 25-34 lost the most money, at $2.4 million.

The number of reports involving a financial loss has decreased this year, indicating that more people are able to recognise and avoid online shopping scams, however those that are losing money are losing more, with an average loss of more than $1,450, compared to $1,190 last year.

Some of the more significant losses reported to Scamwatch during the year relate to high value purchases:

• Pet scams were the most reported when it came to online shopping scams and were also the most financially damaging. Scamwatch received over 2,800 reports and almost $3.5 million in losses so far, a 78 per cent increase compared to the same period last year.
• Vehicle sale scams resulted in big losses at more than $1.9 million, while other common products included caravans, shipping containers and electronics such as laptops, phones, and gaming consoles.
• Shipping container scams were a new trend this year, fleecing consumers of over $676,000. They were popular on marketplaces and classified sites, but scammers also created fake websites and pretended to have real ABNs. Scamwatch has taken action to get some fake websites removed.

People who think they have been scammed should contact their bank or financial institution immediately. If the scam occurred on a social media platform, contact the platform and inform them of the circumstances surrounding the scam.

They can also make a report to Scamwatch and find more information on where to get help on our website.

Know your consumer rights

The ACCC is also urging people to be aware of their consumer rights if something goes wrong, even if the item was purchased during the sales season.

"Remember that you are entitled to consumer guarantees under the Australian Consumer Law, so if you've received a gift or purchased something in the sales and the product stops working or isn't as it was described, you are entitled to a remedy depending on the nature of the problem," Ms Rickard said.

"If you're having an issue with your product, you should first contact the retailer. They cannot refuse to help by sending you to the manufacturer. Your local state and territory consumer protection agency can provide more information about your rights, and may also be able to help negotiate resolutions between you and the seller."

More information about consumer guarantees is available on the ACCC's website.

Note:

Figure 1: Age of people reporting online shopping scams (and classified) by reports and losses (1 Jan - 31 Oct 2021 compared with all of 2020)

Table 1: Top 10 products reported in online shopping scams in 2021 (until 31 Oct), by highest losses

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