8 Red Flags When Online Shopping That Likely Point to Fraud
Online shopping can help you save money and access a wide variety of products, but there are downsides, too. Hackers and other online criminals are constantly trying to scam shoppers by offering fake deals and discounts. In fact, according to a Better Business Bureau Scam Tracker report, online purchase scams are the second-riskiest type of fraud after employment scams.
Although shopping online doesn't always result in identity theft, there are other risks, too. You might lose money, get a bogus product or not get anything at all -- and you might even convince yourself to spend more than you planned to.
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By knowing the most common scams and traps that shoppers encounter, you can set your finances up for a better future. Here are eight worth keeping an eye out for as you online shop.
1. Requests To Pay With Wire Transfers of Gift Cards
Sound the alarm if a retailer asks you for a wire transfer, a money order or a gift card as payment for your order. In this case, your money will likely fall directly into a scammer's pocket and you won't receive anything for the money you paid. If you want to protect yourself, always pay with a credit card or other secure forms of payment, according to the Better Business Bureau.
2. Links Sent via Text Messages (Smishing)
If you receive a random text message telling you to click on a link that advertises some amazing deal or prompts you to cancel a particular service, this is most likely a smishing scam. A smishing scam is a strategic way for criminals to get you to give out your personal information by taking action on a fraudulent link in a text message.
"Smishing professionals use text messages that lure you into clicking on links or providing personal information in response to a text message from what appears to be a trusted source," Steven J.J. Weisman, author of the book "Identity Theft Alert," told Experian. "They'll use other strategies, too."
3. Fake Websites or Domains
Although many online retailers are legitimate, many others are not. If you shop on a fake website, you might receive a knockoff product, something completely different from what was advertised or nothing at all.
One way to identify if you're browsing a fake website is to look at the domain name. As a rule of thumb, most legitimate URLs will not have extraneous characters or misspellings. Retailer websites are simple and typically match their trademark name. For example, the domain name for the fashion brand Michael Kors is MichaelKors.com. Likewise, the domain name for high-end designer Gucci is Gucci.com.
4. Outrageous Discounts and Too-Good-To-Be-True Deals
Say you come across an ad for 95% off your favorite item. You click on the ad and are taken to a website where you can shop for deals. You subsequently put in your personal information to redeem the ad and get your product. At that point, the scammer has your information and will leave you high and dry.
If you're skeptical of a deal, see what the item is selling for at other retailers. Conducting a simple price comparison can help you spot if the deal is truly legitimate or just an attempt to lure you into throwing money at a product or service that doesn't exist.
5. Phishing Emails
Shopping phishing emails can happen at any time of the year, but be especially on the lookout during trending events and the holidays. What appears to be an email from a reputable retailer lists a coveted discount or informs you that something went wrong with your order. The email usually comes with a link for you to click on so that you can get the advertised discount or fix the problem with your order. Clicking the link, however, downloads malware on your computer.
Double-check the email address to confirm the sender's identity's legitimacy. In addition, be on the lookout for poor spelling and grammar and links that require you to supply your personal information, the e-commerce site Etsy recommends. That's a way to avoid falling victim to these money scams.
6. Fake Shipping Alerts
If you receive an email from a major shipping service such as FedEx claiming that your package is delayed or there is a problem with your order, this might be a phishing scam. Typically, this kind of email will ask you to click on a link for more details of the purported problem. But clicking the link can result in downloading malware that hackers use to take information from your computer.
Rather than click on the link, you should visit the shipper's website directly and use your tracking or order confirmation number to verify the status of your package.
7. Fake Coupon Sites
Beware of clicking on coupons from social media. If the coupon comes from the retailer's official social media page, then you should be in the clear. Other times, fake coupons surface on social media pages that claim to be affiliated with retailers.
For example, say you stumble onto a deal at Ross that isn't promoted on any of Ross' official media platforms. Instead of assuming that the deal is an inside scoop, contact your local Ross or try to track down the deal on Ross' official website. Otherwise, you're vulnerable to malware attacks.
8. 'Designer' (Likely Counterfeit) Products at Deep Discounts
Even if you're purchasing a product from a reputable site like Amazon, Walmart or eBay, you might still end up with a counterfeit good sold by one of their third-party sellers. A telltale sign of a counterfeit item is a price that seems too good to be true -- in this case, chances are that it is.
Gabrielle Olya contributed to the reporting for this article.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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