As the holiday season approaches, Better Business Bureau (BBB) urges consumers to remain vigilant against a surge in online scams that could threaten their festive spirit. During the past five years, Texas residents have reported losing $17.5 million to scams, 21% due to online purchases. BBB has identified online purchase scams as the No. 1 riskiest scam encountered by North American consumers in both the 2021 and 2022 Scam Tracker Risk Report, and are often enacted by impersonating reputable businesses.
Since 2018, losses to online purchase scams reported to BBB by Texas residents have significantly increased during two times of the year – early spring and the holiday season – while the number of reports peaks during the summer months. Often, a sense of urgency and the fear of missing out on a great deal for a highly desired product are key influences if an online shopper loses money to a fraudulent seller. The holiday season is a busy time for most people as they purchase gifts, make travel plans, prepare holiday dinners, and get their homes ready for family and friends. In many cases, shoppers do not have the time to verify the legitimacy of an online seller as thoroughly as they typically do at other times of the year, and the existence of Black Friday, Cyber Monday, and other holiday promotions introduces difficulties in determining when a deal is “too good to be true.”
“It is important for online shoppers to protect themselves while interacting with digital marketplaces throughout the year, but especially during the holiday season when scammers are out in force to take advantage of shoppers,” said Heather Massey, vice president of communications and community relations for Better Business Bureau serving the Heart of Texas.
No matter the scheme, a key tactic of scammers is to disguise themselves as a reputable business or government agency (known as an impostor scam), and this strategy is more successful during the holiday season. Impostor scams have been identified as the No. 1 most-reported fraud to the FTC’s Consumer Sentinel Network since 2017, with a median loss of $1,000 in recent years. BBB’s 2022 Scam Tracker Risk Report found some of the most commonly impersonated companies include Amazon, Geek Squad, Publishers Clearing House, and the U.S. Postal Service. With more people ordering products online and expecting deliveries, fraudulent notifications about shipping issues or suspicious activity on an account from an impostor have a greater likelihood of being taken seriously, which often means a greater chance of losing money or personal information.
With $1.2 million reported lost across nearly 1,400 reports, the impact of online purchase scams on Texas residents this year has already broken 5-year records, and the holiday season will likely see these numbers increase. While BBB is concerned about these record-breaking numbers, they do not reflect the emotional, physical, and mental stress associated with falling victim to a scam, nor the long-lasting effects it has on an individual’s confidence to navigate a complex marketplace without being taken advantage of.
“Our goal is to empower consumers to recognize the signs of a scam and to give them the confidence to trust themselves when something doesn’t feel right,” said Massey. “Research conducted by BBB found that nearly 75% of people who encountered a scam but did not lose money simply felt something wasn’t right about the situation, so they walked away. The next two most powerful defenses are to be generally aware of scam tactics and to research the offer.”
This holiday season, BBB provides the following tips to help Texas residents avoid online scams, impostors, and counterfeit items:
Use protected payment methods. BBB research found that people who pay with a credit card or PayPal are more likely to recover their funds after sending money to a scammer. However, with PayPal, a buyer should not send money using the platform’s Friends and Family method. If an online seller directs you to use PayPal’s Friends and Family method, it is most likely a scam because they know PayPal’s protection policies do not cover money sent through that system in the same way as a business transaction.
Be wary of social media ads. Social media is a great way to stay connected with friends and family, and it is also a great way to get exposed to a lot of different products that appeal to you. However, not everything advertised on a social media platform is legitimate, and scammers can easily create sponsored advertisements that will appear on your news feed. If interacting with a social media ad, take a minute to verify it has routed you to the right website. Better yet, go directly to the website on your own and search for the advertised product.
Avoid links provided in unsolicited emails or text messages. If you receive an unsolicited text message with a link, avoid following it. In many cases, there is no way of knowing where that link will direct you, and even if you arrive at a website that appears to look official, it could very well be a lookalike website. It may automatically download malware on your device. If you receive a notification regarding suspicious activity on an online account, verify the facts by contacting the company using a known and trusted method, such as their official mobile app or the contact number on a recent bill.
Review protection policies. Become familiar with the protection policies established by the agency or company you are being contacted by. Many companies and government agencies prohibit their official representatives from asking you to verify personal or account information over the phone or through email. If you ever have doubts about someone’s legitimacy, it is best to hang up and contact the company through another method to double-check that everything is in order.
Verify you are at the right website. Pay close attention to see if any special characters are replacing letters, such as the Greek alpha (α) instead of ‘a’, and the domain and subdomain match the official company website. While looking through the URL, take a second to verify the website is secured. Poor grammar is also a good indication that a scammer may have put together a website hastily. However, this is something that they are getting better at avoiding, due in large part to AI content creation tools. Check the age of the domain – a well-known company isn’t likely to have just registered their website in the past few years.
For more information about how to avoid holiday-related marketplace issues this year, visit BBB.org/Holiday.
If you or someone you know has been affected by a scam or unethical business practice, report it to BBB through an official business complaint or Scam Tracker report. Information provided may help another person from being affected and assist BBB in recognizing trends in marketplace behavior.