Holiday season warning: Scammers heading to social media to catch their targets, BBB says

DALLAS — With the holiday season finally here, that also means scammers are out there trying to take advantage of shoppers. And one of their main places to go? Social media.

Since the pandemic, shoppers remain increasingly susceptible to online retail fraud that entices shoppers with hard-to-find items, promises of low prices and easy delivery, according to reports by consumers to the Better Business Bureau (BBB).  

As of November 2022, online shopping scam reports to the BBB Scam Tracker remain just under all-time highs reached in 2021 when the organization issued an in-depth study last December: Theft on a Massive Scale: Online Shopping Fraud and the Role of Social Media.

The way many people on social media will jump around quickly between different links and websites is often times when people get caught without thinking through what they’re clicking on, according to Better Business Bureau spokesperson Monica Horton.

“Just scrolling through those social media feeds,” Horton said. “And you see an advertisement pop up in that feed. A lot of times the hook is that it’s a very rare item that you are in search of. Hard to find. Hard to get. If it sounds too good to be true, it usually is.”

Ronnie Lewis lives in Las Colinas and initially saw a necklace from an Instagram advertisement from a small, local company. He liked it, bought and it was properly delivered.

However, when he bought two more for $100, that’s when the company started saying there would be a delay in getting his items.

“They went on and on how they were a small company and COVID has messed up their supply chain,” Lewis said. “They kept telling me to be patient over and over.”

Lewis eventually decided it wasn’t worth the hassle and asked for a refund. The company again strung him along and told him to wait. But after months of going back and forth, the company eventually stopped communicating with Lewis and the online website went offline.

No necklace, no refund,” Lewis said. “Once you purchase and they take your money, you don’t hear anything so you’re just kind of stuck in limbo.”

Shannon Wolf also recently clicked on a social media ad for some jewelry that she thought was from Kay Jewelers.

But when she received her email receipt after ordering it, it was in another language from a different country.

“That’s when I immediately knew: Not Kay Jewelers,” Wolf said.

Wolf said her ring did eventually arrive. However, she also said it was clearly apparent it wasn’t close to the ring she ordered.

“It was supposed to be like a sapphire,” Wolf said. “It had a bunch of metal. The prongs. The metal wasn’t properly done and the metals was covering the stone.”

The Better Business Bureau recently worked with and collected data from the Federal Trade Commission Consumer Sentinel Network and Canadian Anti-Fraud Centre. Based on this data and current trends, North America is projected to reach more than $380 million in online retail scams in 2022.

Online retail scams remain one of the most reported frauds to these groups, according to the BBB.  

“Before you plug in any payment information, definitely scrutinize that website and make sure that you are where you think you are,” Horton said.

Emotional purchases, like wedding dresses or pets, can cause consumers to ignore red flags. The BBB said here are some common warning signs: 

Prices that are too good to be true. Websites that look legitimate but credibility falls apart with scrutiny. Credit card payment failure leads the seller to ask for payment over cash-sharing apps like Zelle and Venmo or with gift cards.

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Though monetary losses to scams appear down overall, they remain high compared to pre-pandemic years, the BBB said. Nearly 36% of all online retail fraud reports to BBB Scam Tracker originated through a fake website. Scammers used social media and email to initiate about 40% of reported scams. 

Scammers target three key moments in the shopping process, according to BBB Scam Tracker reports:  

Before the purchase, consumers may encounter advertisements for scams on social media.  While shopping, shoppers may be enticed by artificially low prices or fake websites.  After the purchase, fraudsters send fake tracking information and request more money for safe delivery. 

Online auto sale scams continue to come with high losses for consumers as well. A sampling of 100 BBB Scam Tracker reports found an average loss of more than $5,000. According to the BBB Institute, fake pet scams are some of the most common, at 18% of all online retail scams in 2022. These figures likely represent just a fraction of the problem. One study using FTC data determined that only 4.8% of victims of mass market fraud ever complain to BBB or a government entity. 

The BBB also provided these recommendations for researching online retail sellers: 

Check BBB.org for BBB Business Profiles and consumer reviews. Search for online reviews.Look at Scamadviser.com to learn how long a website has been in operation. A recently created website may be a red flag.  Review the website’s URL for misspellings or other errors. Examine the URL with Google’s Transparency Report tool. Use a map app to verify the business’s address. Remember the adage: If a price is too good to be true, it probably is.Make sure you can pay by credit card, which offers the most protection against loss. Treat a social media or email ad with suspicion until you have investigated the company behind it.