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Social media ads help online retail scammers steal over $280 million ahead of Cyber Monday

Dallas Morning News logo Dallas Morning News 11/26/2022 Natalie Walters, The Dallas Morning News

Dallas resident Shannon Wolf clicked on a Facebook ad for Kay Jewelers that offered a steep discount and quickly took advantage of it. Her receipt came from Hong Kong.

“As soon as the charge went through, I knew it wasn’t legit,” she said.

She disputed the $48.90 charge with PayPal, but the company said, “tough luck,” she said.

“It’s very misleading because they had a website that says Kay Jewelers so if a deal looks too good to be true, it probably is,” Wolf said.

Scammers will be busy this weekend as a record 166 million people are expected to shop between Thanksgiving Day and Cyber Monday, according to the National Retail Federation and Prosper Insights and Analytics.

“While there is much speculation about inflation’s impact on consumer behavior, our data tells us that this Thanksgiving holiday weekend will see robust store traffic with a record number of shoppers taking advantage of value pricing,” NRF CEO Matthew Shay said in a statement.

The Better Business Bureau said reports to its scam tracker are just under all-time highs reached last year. From January to September, financial losses across North America from reported fraud in the “online retail” category hit about $280 million and are expected to reach $380 million by the end of the year.

“Likely, just under 5% of people who are scammed actually report it, so the real number is much larger,” said Brian Edwards, an investigator for the BBB.

Edwards was referring to a study that used Federal Trade Commission data to conclude that only 4.8% of victims of mass-market consumer fraud ever report it to the BBB or a government entity.

Last year, losses from reported fraud across all categories totaled more than $5.8 billion, a 70% increase from 2020, according to the Federal Trade Commission. Most of the scammers are located overseas in places where they won’t face consequences for running scams, Edwards said.

People between the ages of 18 and 24 may be digitally savvy, but they’re the most likely victims of online retail fraud because it’s their preferred shopping method. And scammers have gotten smarter to trick them, even offering fake tracking numbers.

“Scammers adapt to popular trends quickly and to different social media platforms quickly, like TikTok, which helps them target younger people,” Edwards said.

Leah Vestal said she ordered bean bag chairs for $63 from Toastfine after clicking on its Facebook ad. The company sent her two data cable sets instead and didn’t reply to her emails asking them to rectify the situation, she said.

Losses from online retail scams tend to be relatively low, with an average loss of $100, according to the BBB. Not all victims are able to recover their money, but reporting fraud is still worthwhile because it helps the BBB make recommendations to regulators and helps law enforcement know how to protect people, Edwards said.

With Cyber Monday coming up, Edwards spoke with The Dallas Morning News to give readers tips on how to protect themselves from online retail fraud.

Tips to avoid online retail fraud

1. Only use credit cards for online shopping.

Online retail fraud victims who use credit cards often get their money back, Edwards said. While the scammers get away with the stolen money, credit card companies will often refund victims in the amount stolen, Edwards said.

Consider it a red flag if the website says the credit card payment failed and asks for payment over a cash-sharing app like Zelle and Venmo or with gift cards.

2. Use extra caution with personal purchases.

Shoppers are more at risk of fraud when their purchases have an emotional component, such as shopping for a wedding dress or buying tickets to a nearly sold-out event, Edwards said. Watch for false ads for wedding dresses on Instagram and other social media sites. The BBB describes one instance in which a Louisiana woman paid $580 for a wedding dress that hadn’t been delivered a year later.

3. Make sure the website is legitimate.

More than 35% of the reported online fraud cases originate from a fake website. Sometimes scammers will create a website to mirror a legitimate one, like Amazon. Other times, they create a fake business.

Edwards recommends checking the length and spelling of the website address, especially if you’re looking for a known website like Amazon.

For a business you haven’t heard of before, Edwards’ biggest tip is to look up reviews of the site online. has BBB Business Profiles that let shoppers check for reviews. keeps track of when websites are created. If a website was only launched recently, that could be a red flag.

Whether you’re on a known website or not, Edwards suggests that you click around on the website to make sure it’s a fully built-out platform.

“Sometimes people tell us they avoided a scam because they poked around the website and saw that parts of it weren’t complete or there because the scammers didn’t bother to make it a full site,” Edwards said.

©2022 The Dallas Morning News. Visit Distributed by Tribune Content Agency, LLC.


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