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An age-old cliché is worth remembering in the digital age

Delia Rickard
3rd April, 2017

‘If it’s too good to be true it probably is’ is a well-worn adage we’ve all heard but it’s too-often ignored – and ignored at our peril, as Delia Rickard, Deputy Chair of the ACCC explains.

Everyone loves a bargain, and no one knows this better than online scammers. Increasingly, scammers, masquerading as legitimate online retailers, are luring bargain hunters by selling well-known brands at too-good-to-be-true prices.

In the first three months of 2017 alone, the ACCC’s Scamwatch service has received more than 1,000 reports of online shopping scams, netting more than $150,000.

Australians in the 18-to-24 age bracket made up the biggest group of people who reported losing money to online shopping scammers. Worryingly, Scamwatch statistics also show nearly one in every two people reporting the scam lost money.

The scam itself is alarmingly simple.

Scammers set up fake websites that look like genuine online stores, including professional-looking design, stolen logos, and even a ‘.com.au’ domain name and/or stolen ABNs. The scammers running these sites will advertise goods, often well-known and trusted brands, at unbelievably low prices to lure in unsuspecting consumers shopping around for a good deal.

This is the best clue that you’re shopping with a scammer because if something looks too good to be true, it probably is.

There are other signs you should also look out for. Aside from (literally) unbelievable prices, the biggest tip-off is the method of payment: scammers will often ask you to pay using a money order, pre-loaded money card, or wire transfer, even gift cards from well-known retailers. If you make a payment this way to a scammer, you’re highly unlikely to see that money again. That’s why they avoid traditional payment methods such as credit cards.

We all love a bargain, the bigger the better, but scammers prey on this and will use the ‘fear of missing out’ to cloud your judgement. If in doubt, do a Google search on the website you’re thinking of buying a product from. There are many great product review services that can tip you off to stay clear of a fake retailer

For more advice on how to avoid online shopping scams, visit scamwatch.gov.au.

 

Scamwatch Tips

  • Do some independent research on a website you’re thinking of buying a product from and check out reviews from other consumers.
  • Avoid any arrangement with a stranger that asks for up-front payment via money order, wire transfer, international funds transfer, pre-loaded card or electronic currency. Never send money or give credit card or online account details to anyone you don’t know or trust and never by email.
  • When making online payments, only pay for items using a secure payment service—look for a URL starting with ‘https’ and a closed padlock symbol, or a payment provider such as PayPal. Think twice before using virtual currencies such as bitcoin—they do not have the same protections as other transaction methods so you can’t get your money back once you send it.
  • When using retail websites, find out exactly who you are dealing with. If it is an Australian company, you are in a much better position to sort out the problem if something goes wrong. You can check ABNs at: http://abr.business.gov.au/.
  • Check if the website site has a refund or returns policy, and that their policies sound fair. The better online shopping sites have detailed complaint or dispute handling processes in case something goes wrong.
  • Avoid clicking on pop-up ads that can download viruses, spyware, malware, and other unwanted software to your computer.

 

Delia Rickard is Deputy Chair of the Australian Competition and Consumer Commission

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