BBB Study: Reported online retail fraud losses approach $380 million in 2022
RENO — It’s the holiday shopping season and many consumers are searching online for the perfect gifts. While shopping online is easy and convenient, Better Business Bureau warns shoppers to research before buying, be mindful of social media scrolling, and use credit cards to avoid scammers.
The warning is an update to BBB’s in-depth online shopping study issued last December, supported in part by consumer statements to BBB Scam Tracker with losses totalling nearly $380 million just in online purchase fraud. According to an October BBB Institute for Marketplace Trust report, scams being perpetrated online have risen 87% since BBB Scam Tracker launched in 2015.
Of those reports, a vast majority of consumers lost money. According to the BBB Institute’s research, that means online shopping fraud is one of the most dangerous and successful scams buyers face.
In many cases reported to BBB’s Scam Tracker, scammers entice shoppers with hard-to-find items, low prices, and fast delivery. About 40% of all online retail fraud reports said scammers used social media and email to initiate the scam. Nearly 36% said scammers used fake websites.
In 2022, online retail scams also remain one of the most reported types of fraud to the Federal Trade Commission (FTC) Consumer Sentinel Network, whose findings mirror BBB’s.
“Fraudsters have found the shift to online shopping to be lucrative and convenient,” said Jane Rupp, President and CEO of BBB. “It’s not as hard as it should be to trick us.”
According to BBB Scam Tracker, scammers target three key moments in the shopping process:
— Before the purchase, with ads that appear on social media and other websites,
— While shopping, with enticing low prices and fake websites,
— And after the purchase, where fake tracking info is sent or more money is requested to ensure safe delivery.
All online scams have these three warning signs in common:
— Prices that are too good to be true,
— Websites that may look legitimate at first glance,
— Frequently either do not accept credit cards or state a preference for peer-to-peer payment apps or gift cards.
“Credit cards offer consumers the most protection. Scammers know this and turn to gift cards or money transfer services like Venmo, Zelle, Cash App, and PayPal,” Rupp continued. “Start strong and pay with a credit card when possible—those companies have strong procedures in place for disputing fraudulent transactions.”
BBB recommendations for researching online retail sellers:
— Check BBB.org for BBB Business Profiles and consumer reviews
— Search for online reviews
— Review the website’s URL for misspellings or other errors
— Examine the URL with Google’s Transparency Report tool
— Use a map app to verify the business’s address
— Make sure you can pay by credit card, which offers the most protection against loss
— Treat a social media or email ad with suspicion until you have investigated the company behind it
Visit BBB.org/Holiday to learn more about holiday scams, and if you've been the victim of online shopping fraud, please report it at BBB.org/ScamTracker. Your report can help others avoid falling victim to similar scams.
About BBB Scam Tracker
BBB Scam Tracker is an online platform that enables consumers and businesses to report attempted and successful acts of fraud. The platform also enables people to search scam reports to help determine if they are being targeted.
About BBB
The Better Business Bureau has empowered people to find businesses, brands, and charities they can trust for over 110 years. In 2021, people turned to BBB more than 200 million times for BBB Business Profiles on 6.3 million businesses and Charity Reports on 25,000 charities, free at BBB.org.