Online purchase scams now account for more than a third of all scam reports filed with the Better Business Bureau, and four out of five consumers who report such scams lose money, making it the No. 1 riskiest scam type.
BBB is warning consumers ahead of the holiday shopping season to be aware of how scammers deceive consumers, whether they are actively shopping or passively browsing.
Online purchase scams consistently rank among the top three riskiest since 2017, and a significant number of people continue to lose money when targeted by online purchase scams (74.8% in 2021). The median dollar loss for this scam type has risen in recent years, up from $76 in 2019 to $102 so far in 2021.
Experts are predicting an earlier start to the 2021 holiday shopping season because of supply chain concerns, microchip shortages, and holiday hiring. BBB warns scammers will find ways to take advantage of the situation by varying the product categories, capitalizing on what people are looking for online and focusing on the most sought-after gifts such as electronics, toys, and other trendy gift items.
“These critical findings can help guide our scam prevention outreach to those most vulnerable to these scam types,” said Melissa Trumpower, executive director of the BBB Institute for Marketplace Trust, BBB’s foundation. “Online purchase scams don’t just affect those who lose money. For every victim who lost money, that meant less income to buy groceries, gifts, pay the utility bill, or the loss of personal information that could lead to identity theft.”
Each year, the BBB Institute issues a BBB Scam Tracker Risk Report, which analyzes the previous year’s data. Since the advent of the COVID-19 pandemic, online purchase scams have jumped along with an increase in online shopping. BBB took a deeper dive into the data by surveying people who had reported scams to ask them more about their situation.
One man preordered a unique flashlight in February through a public Facebook group, paying $780 via PayPal. He wasn’t set to receive the item until June, a date late enough that would make it impossible to file and win a claim through the merchant service.
“Beforehand, I did extensive research and thought it was legitimate,” the man said to BBB Scam Tracker. He has contacted the seller over 15 times between his preorder date and the start of October, consistently given excuses and refusals for a refund. His attempts to get a refund through his bank and PayPal were unsuccessful due to the length of time since the purchase.
Whether a consumer was actively shopping for a product or passively browsing, it appears this activity had an impact on susceptibility. Sixty-four percent of survey respondents were actively searching for a product when they lost money to an online purchase scam. Thirty-six percent of those who lost money were passively looking or not searching.
When it came time to place an order and expect the item to be shipped, 32% surveyed reported receiving shipment tracking information that seemed authentic, 30% received fake shipping information, 2% received shipping information they didn’t verify, and 36% didn’t receive shipping information. Several survey respondents noted that they didn’t suspect a scam at first because they expected shipping delays due to the pandemic.
The analysis of online purchase scam reports submitted to BBB Scam Tracker found that more than 400 different types of products were used by scammers to perpetrate scams. Pets and pet supplies were the riskiest sales category in 2020. Almost 35% of online purchase scam reports were pet-related, with 70% of people losing money, and a median dollar loss of $750. The French Bulldog was the top breed used to perpetuate puppy scams.
For tips on how to avoid online shopping scams, visit BBB.org/OnlinePurchaseScams
To report a scam, go to BBB.org/ScamTracker.
To learn more about other risky scams, go to BBB.org/ScamTips and visit our scam news feed.
About the BBB Institute for Marketplace Trust
The BBB Institute for Marketplace Trust (BBB Institute) is the charitable arm of the Better Business Bureau. Our mission is to educate and protect consumers, establish best practices for businesses, and solve complex marketplace problems. Our consumer educational programs, which include a wide array of resources on fraud prevention and education, are delivered digitally and in person by BBBs serving communities across North America. You can find more information about BBB Institute and its programs at BBBMarketplaceTrust.org.
ABOUT BBB: For more than 100 years, the Better Business Bureau has been helping people find businesses, brands, and charities they can trust. In 2020, people turned to BBB more than 220 million times for BBB Business Profiles on 6.2 million businesses and Charity Reports on 11,000 charities, all available for free at BBB.org. Today, BBB serving Northern Nevada and Utah is supported by nearly 4,000 Accredited Businesses that have voluntarily committed to adhere to BBB’s Standards for Trust.
