How Online Shopping Fraud is Still Big Business in the USA

Cyber fraud in the USA and around the world has gone through a lot of iterations and variants throughout the years. Criminal syndicates that operate these fraudulent Web schemes constantly devise new ways to trick unsuspecting users into becoming victims of their Internet scams and online shopping fraud. This is one of the main reasons behind the almost 30% growth in monthly online scam cases that were reported in the USA during the first half of 2016. This was from over 6000 monthly Web crime reports that were filed by American users last year.

Online shopping fraud continues to be a big problem in the USA despite the most advanced Internet security technologies today. Credit card theft is among the most prevalent objectives of these criminal syndicates for these fraudulent schemes on the Web. This is why card not present theft is predicted to cause more than $19 billion of losses for businesses in the USA by 2018. This is from the over $8 billion of losses that were estimated by many US cyber security groups in 2014.

So, how exactly is online shopping fraud still a huge problem in the USA? Here are some of the main reasons why these online scams continue to victimize many Web shoppers in the USA this year:

How Online Shopping Fraud Continues to Victimize American Users

  1. Fake Web Stores – Clones of popular shopping sites are used by many scammers for fraud. These are designed to trick users into thinking that they’re entering their credit card details to place orders in their favorite online shopping platforms like Amazon. Some fraudsters find it difficult to get a merchant account to process these transactions, so they just steal the user’s credit card credentials. They then sell it to other scammers who have merchant accounts where they can cash out these stolen credit cards.
  1. Rogue Seller Scams – This is where fraudsters pose as legitimate sellers of products in widely used Web shopping platforms like Amazon. These criminals commit this online shopping fraud by contacting users who have recently left reviews for the products that they purchased from these Web shopping platforms. They then trick users into believing that they can get good discounts from their purchased products if they send cash through money ordering or cash remittance service portals instead of credit card payments. Posing as the legitimate sellers of the product, these fraudsters tell users that they’ve already canceled their credit card payments.
  1. Fraudulent Internet Retail Shops – There are also many Web stores that are designed to look like legitimate Internet shops, but are in fact operated by criminal syndicates. A lot of these fake online retail stores only accept cash payments via money ordering platforms and cash remittance service providers like Western Union. To make sure that many users fall for this type of fraud, scammers post popular products at ridiculously low prices in these fraudulent online retail shops.
  1. Online Auction Scams – These scammers contact users of popular auction sites. Scammers carry out this online shopping fraud by tricking unsuspecting users into believing that the winning bidder in an auction that these users participated in has just pulled out from the auction. These fraudsters then convince their victims to send cash via money ordering or cash remittance platforms to avail of the auctioned product.
  1. Internet Classified Ad Scams – Fraudsters perpetuate this online shopping fraud by posting fake ads for products and services at bargain prices in popular classified ad sites. They create captivating ads that deceive users into sending cash through money ordering and cash remittance platforms.
  1. Product Fencing Operations – This online shopping fraud involves sophisticated methods for convincing unsuspecting users to unknowingly participate in moving products that are purchased using stolen credit cards. This is where scammers sell popular products at very low prices in the Deep Web to other fraudsters. They then offer money and products to unsuspecting users in exchange for receiving and sending these products to the safety drop-off addresses that are provided by their buyers.

Now that you know how online shopping fraud is still a big problem in the USA, you must learn about the different methods that these scammers use to lure as many users as possible. Here are some of the top tactics and strategies that are used by fraudsters to commit online shopping fraud this year:

Widespread Methods Used by Scammers for Online Shopping Fraud

  1. Online Social Marketing Scams – These fraudulent schemes are designed to trick users into unknowingly participating in product fencing operations. Once victims receive and send products on the scammer’s behalf, they have just unknowingly participated in this online shopping fraud. Many of these fraudsters use hacked accounts in popular Web mail platforms and social networks to send deceptive messages to the contacts of the legitimate account owner.
  1. Phishing Scams – These are designed to trick users into giving away their account credentials in their online banking portals. These stolen details are then used by these criminals for online shopping fraud and for their other illegal activities.
  1. Malware – Malicious applications are distributed all over the Internet by these fraudsters. Once secretly installed in a device, these malicious applications initialize redirect functions in the user’s compromised Web browser right after the user takes a pre-designated action, such as going to a popular Internet shopping platform like Amazon. The user is redirected to a clone of the Web store, which is operated by these scammers. The user is then tricked into buying products at very low prices in these fake sites using cash remittance service portals and money ordering providers like Western Union.

These are the most widely used methods of many scammers for perpetuating Web shopping fraud this year. Keep these things in mind, and you’ll be able to quickly spot and safely avoid these online scams. Because many of these fraudsters use malicious applications, it’s also recommended for you to install a good system security program in the devices that you use for buying products and services on the Web.

Have you been a victim of online shopping fraud? Please create an account on this site and leave a report to make others aware and help put a stop to cyber crime for good!