How to Avoid Fraud While Shopping Online
Online shopping makes it easy to find deals, compare prices to save money and shop from anywhere. Unfortunately, scammers use the convenience of online shopping to target shoppers.
Online shopping fraud can happen through fake websites, phishing messages, counterfeit listings, payment scams and stolen account information. Here’s what you need to know to protect yourself against online shopping scams.
What is online shopping fraud?
Online shopping fraud uses scams or deceptive activity designed to steal money, payment information, account credentials, or personal information from shoppers. Fraud sometimes occurs on unfamiliar websites, but it can also happen in the form of fake listings, emails, texts, social media ads and online marketplaces.
It’s worth noting that online shopping fraud isn’t the same as a legitimate purchase that results in a bad experience because of poor customer service or a shipping delay.
Common types of online shopping scams
There are lots of online shopping scams to watch out for, from phishing emails to counterfeit products. Understanding some of the common online shopping fraud tactics used by scammers can help you protect yourself when you shop online:
- Fake online stores: Scammers set up fake online storefronts that look legitimate but don’t actually sell anything. These online stores often look professional and advertise on social media.
- Phishing emails and texts: Texts and emails containing malicious links or attachments can steal your information, giving scammers access to your accounts or payment details.
- Too-good-to-be-true deals: Some websites offer products at unbelievably low prices, which encourages shoppers to take a chance. After you make a purchase, your items never arrive.
- Counterfeit products: Online stores pretend to carry legitimate products from brands you’re familiar with, like designer clothes or collectible cards. These products are affordably priced compared to other stores, but they’re counterfeits that are worth far less than the asking price.
- Marketplace scams: Platforms like Facebook Marketplace are a common place for scammers to hang out. Scammers might post fake listings, request payment upfront, ask to move off-platform, or send pictures of a fraudulent failed payment.
- Non-delivery scams: Non-delivery scams are one of the simplest forms of online shopping fraud. Sellers simply take your money and don’t send you anything in return.
- Account takeover: When scammers gain access to your online bank account or accounts you have through retailers, they can make fraudulent purchases and even get access to your payment information in some cases.
10 ways to avoid fraud while shopping online
Online shopping fraud is more common than you might think, but there are ways to protect yourself. These online shopping fraud prevention tips for consumers can help you identify and avoid fraud for a smoother online shopping experience.
1. Shop with retailers you trust
One of the most effective ways to avoid online shopping fraud is to shop with retailers you trust. Starting an online business is more accessible than ever, so there are a lot of new retailers popping up with promises of high-quality products at unusually low prices. If you use social media regularly, you’ve probably seen a lot of these products.
Choosing reputable retailers you’ve shopped with before is a simple way to avoid scams. Whether you have a favorite fashion retailer or a go-to online store for home decor, sticking with those retailers is your best bet.
2. Check the website carefully
If you’re shopping on a website you’re not familiar with, spend some time checking the website to make sure it’s legitimate. You can start by looking for common signs of scams like a lack of encryption, blurry pictures, poor spelling and a lack of details about the company.
Doing outside research can also be a good way to find out if a store is trustworthy. You can search for reviews from other customers online, but remember that positive reviews can be faked. There are also tools like Scamwise that you can use to check if a website is safe before using it.
3. Be skeptical of unusually low prices
Everybody loves a good deal, but sometimes a deal is simply too good to be true. It’s not unusual to find a lower price on an item from one retailer, but you should be wary if prices are significantly lower at one retailer.
While there are some exceptions, such as holiday sales, you’re not going to find premium brands at unusually low prices most of the time. If a price seems too good to be true, it probably is.
4. Research unfamiliar sellers
Doing your research is always a smart idea when you’re making an online purchase, but it’s especially important when you’re buying something from a seller you’re not familiar with. Before you provide your payment information or make a purchase, do your research.
You can look at reviews to see what other people are saying about a retailer. Searching for a retailer’s name on social media sites like Reddit can also be a good way to figure out if a seller has a legitimate history with various buyers.
5. Use safer payment methods
There’s always some risk when shopping online, but you can mitigate that risk by using safer payment methods for online purchases. Digital wallets are a great option because they hide your card number or bank account details from merchants, so you don’t have to worry about your information being stolen.
Credit cards are also a good option because you don’t have to share your bank account information and credit cards offer strong fraud protection.
6. Protect your shopping accounts
Make sure all your online shopping accounts have strong passwords and multifactor authentication if possible. If someone gains access to your Amazon or eBay account, they can use your saved payment methods to make fraudulent purchases. Securing your account is one of the best ways to prevent online shopping fraud.
7. Watch for phishing messages
With the volume of emails and texts many consumers receive, it can be hard to figure out which are scams and which are legitimate. Phishing emails and texts use malicious links or attachments to steal your sensitive information and they often appear to come from legitimate senders.
Check the email address to verify the email is coming from the right address. Instead of clicking on the link to log in, go directly to the actual website and log in from there. If you need to update your payment information or address, you can do it safely from the website.
8. Avoid shopping on unsecured networks
Shopping on the go can be convenient, but it can also increase the risk of online shopping fraud. You can keep your home wireless network secure with a strong password and up-to-date firmware, but you don’t know how secure public networks are.
Shopping on unsecured public networks can put your personal information at risk, including sensitive payment information. The best way to avoid this problem is to do your online shopping on a secured private network at home.
9. Review return, refund and shipping policies
Most reputable retailers will allow you to return or refund a product if you’re not satisfied, and you usually have several weeks or months to initiate the return. Fraudulent retailers often scam customers by selling low-quality products without offering returns or refunds, so you’re stuck with whatever you purchase.
Checking return, refund and shipping policies can help you avoid unexpected fees and surprises when shopping online.
10. Monitor your accounts after making purchases
After you make an online purchase, keep an eye on your accounts to make sure you recognize any recent activity. It’s not uncommon for fraudulent purchases to appear on your account after you buy something from a scam website, so watching for these purchases is important.
If you notice a fraudulent purchase, alert your bank or credit card provider to dispute the purchase and get your money back.
Online shopping fraud warning signs
Knowing the warning signs of a fake online store or shopping website helps you stay vigilant and avoid scams. Here are some warning signs you should watch for:
- Prices far below those offered by other retailers
- Misspelled or unusual website addresses
- Pressure to act immediately
- Requests for gift cards, cryptocurrency, wire transfers, or off-platform payments
- No physical address or customer-service information
- Recently created or poorly reviewed seller accounts
- Unexpected messages asking you to “verify” payment or login information
- Requests for personal information that is unnecessary for the purchase
What to do if you think you've been scammed online
Even when you’re proactive about protecting yourself, scams happen. If you think you’ve been scammed online, here’s what you should do:
- Contact your bank or card issuer to dispute any unauthorized charges
- Change passwords for compromised accounts
- Turn on multifactor authentication and review account activity
- Contact the retailer or marketplace customer support team
- Save receipts, emails, screenshots and transaction records as proof of online shopping fraud
- Report suspected fraud to the FTC, your state’s consumer protection office, or your state’s attorney general
- Consider using credit monitoring or placing a fraud alert and/or credit freeze if your information may have been exposed