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Online purchase fraud

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What is an Online Purchase Scam?

Online purchase scams typically involve the purchase of products and/or services where the transaction occurs via a website or other online means. Scammers utilize online technology to offer attractive deals, but once the payment is made no product or service is delivered. 

If the deal looks too good to be true, it probably is. Low price is the top reason victims purchased a product online and lost money. The top motivating factor for people who made a purchase and then lost money was price. Don’t shop on price alone. 

  • Fake Check - Fraudsters pretend to purchase an item only to send a fake check and ask for a refund of the 'accidental' overpayment; by the time the victim realizes the check is bad they've already sent the funds from their account. 
  • Wire Fraud - An individual is sent a payment significantly higher than an owed amount and is instructed to deposit the money in their bank account and wire transfer the excess funds back to the bank of the individual or company that sent it. 
  • Charity fraud: Using deception to get money from individuals believing they are making donations to legitimate charity organizations, especially charities representing victims of natural disasters shortly after the incident occurs. Learn More
  • Non-payment of funds: Fraud occurring when goods and services are shipped or rendered but payment for them is never received.
  • Re-shipping scheme: An individual is recruited to receive merchandise at their place of residence and subsequently repackage the items for shipment, usually abroad. Unbeknownst to them, the merchandise was purchased with fraudulent credit cards, often opened in their name.
  • Auction - Non-delivery of goods or failure to ship merchandise is the simplest type of auction fraud. A seller lists an item, the item is purchased, the seller collects the funds, and the seller does not send the item.  Sometimes, this type of fraud is done as part of a larger phishing scam in which a shill auction is set up solely for the purposes of obtaining credit card information or other details from a buyer. In other cases, however, the goal is simply to take buyer funds without properly following through on the transaction.

Tips for avoiding Online Purchase Fraud:

  • Purchase merchandise from reputable dealers or establishments.
  • Purchase merchandise directly from the individual/company that holds the trademark, copyright, or patent.
  • Make sure you are purchasing merchandise from a reputable source.
  • Do your homework on the individual or company to ensure that they are legitimate.
  • Obtain a physical address rather than simply a post office box and a telephone number, and call the seller to see if the telephone number is correct and working.
  • Send an e-mail to the seller to make sure the e-mail address is active, and be wary of those that utilize free e-mail services where a credit card wasn’t required to open the account.
  • Check with the Better Business Bureau from the seller’s area.
  • Be cautious when responding to special investment offers, especially through unsolicited e-mail.
  • Be cautious when dealing with individuals/companies from outside your own country.
  • Inquire about returns and warranties.
  • If possible, purchase items online using your credit card, because you can often dispute the charges if something goes wrong.
  • Make sure the transaction is secure when you electronically send your credit card numbers.
  • Consider using an alternate payment service.
  • Use secure and traceable transactions. Avoid paying by wire transfer, prepaid money card, gift card, or other non-traditional payment methods.
  • That shipment tracking information you received might be fake. Don’t just click on the tracking link; go to the shipper’s website and type in the code yourself to see if it’s real.
  • Be careful purchasing sought-after products, especially during the holiday season. The risk of online purchase scams rises during the holidays because more people are making online purchases, but also because scammers are offering the most popular products for the season at great prices.

Beware of fake websites. 

Don’t judge a person or company by their website; flashy websites can be set up quickly.  Click here for free online tools to check a Web site domain.
  • Check the URL for errors/inconsistencies. 
  • Watch for bad grammar. 
  • Beware of new domain names. 
  • Search for accessible contact information. 
  • Read online reviews about the company and/or website.
  • Check out other websites regarding this person/company.
  • Don’t believe everything you see. Scammers are great at mimicking official seals, fonts, and other details. Just because a website or email looks official does not mean it is.
  • Make sure the website is secure. Look for the "https" in the URL (the extra s is for "secure") and a small lock icon on the address bar. Never enter payment or personal information into a website with only “http” (it is not secure).

Social Media

Like marketers for real companies, scammers have access to the tools they need to learn about your buying behaviors, offering up exactly what you want at enticing prices.
  • Beware of making quick purchases while scrolling social media.

Tips for Avoiding Internet Auction Fraud:

  • Understand as much as possible about how the auction works, what your obligations are as a buyer, and what the seller's obligations are before you bid.
  • Find out what actions the website/company takes if a problem occurs and consider insuring the transaction and shipment.
  • Learn as much as possible about the seller, especially if the only information you have is an e-mail address. If it is a business, check the Better Business Bureau where the seller/business is located.
  • Examine the feedback on the seller.
  • Determine what method of payment the seller is asking from the buyer and where he/she is asking to send payment.
  • If possible, purchase items online using your credit card, because you can often dispute the charges if something goes wrong.
  • Be cautious when dealing with sellers outside the United States. If a problem occurs with the auction transaction, it could be much more difficult to rectify.
  • Ask the seller about when delivery can be expected and whether the merchandise is covered by a warranty or can be exchanged if there is a problem.
  • Make sure there are no unexpected costs, including whether shipping and handling is included in the auction price.
  • There should be no reason to give out your social security number or driver's license number to the seller.











eFraud Prevention™, LLC