New report shows fraud increasingly common in cross-border e-commerce transactions
European Consumer Centre Network (ECC-Net) today launches a report which finds that consumers increasingly encounter fraud when making cross-border purchases online. Entitled “Fraud in cross-border e-commerce”, it summarises problems reported by individual consumers to ECC-Net. It highlights the problems and risks faced by consumers when shopping online and provides practical advice on how to recognise and avoid scams.
The report found that the most common scams reported to ECC-Net are those involving fraudulent items or tickets, counterfeit products, alleged free trials, data phishing, and the purchasing of used cars online. 70% of participants reported fraudulent websites, many of which entice consumers by offering items such as phones at cheap prices only to demand further payment for delivery or customs charges. In other situations, consumers pay significant sums of money for tickets that are never delivered and which may not even exist. 30% of participants reported instances of consumers being caught out by “free” trials of a product or service which then turned out to be a front for costly subscription services. The proliferation of counterfeit products (reported by 41% of participants) is particularly worrying, as purchasing these items is considered a criminal offence in some European countries.
In addition to these established scams, newer threats are emerging to take advantage of changes in the way consumers use the internet. Mobile fraud is increasingly common – indeed, the report notes that smartphone users are 33% more likely to fall victim to identity fraud than the general public. Phones tend to be less secure than regular computers and consumers less vigilant with their personal information when using them. Other growing scams include gaming fraud, animal rescue tricks, and online dating fraud – the latter particularly devastating, as fraudsters often spend long periods of time building a bond with the victim only to then seek money for supposed travel or health issues.
A Maltese consumer ordered tickets from an online trader for a football match for the price of €827.50. Subsequently, the trader informed the consumer that the tickets were not available and that a refund would be processed, but this was never received.
A Bulgarian consumer was contacted by a British seller on Skype. The consumer ordered three mobile phones for a total price of 600 USD which was paid via a money transfer service. The consumer had suspicions about the trader’s credibility, but as the price was so low, he decided to buy anyway. The trader reassured him that he had a legitimate business in the United Kingdom and that he could be easily pursued in case of non-compliance. After a few days the trader requested the consumer pay an additional 750 USD for tax and custom fees. The consumer paid this money but did not receive the phones. He was then asked to pay 1000 USD more. The consumer did not agree and asked for his money back. The trader never reimbursed him or delivered the phones.
Speaking at the launch, Caroline Curneen, Assistant Legal Advisor at ECC Ireland said, “Regrettably, consumers encounter scams online with disheartening frequency. Fraudsters are becoming ever-more inventive and sophisticated in their approaches and it is crucial that consumers remain vigilant and are aware of the latest threats. With Irish consumers spending over €4.1 billion on online shopping in 2012, it’s more important than ever to be informed and vigilant about fraudulent behaviour.”
ECC Ireland has the following tips for consumers shopping online this Christmas.
• Buy from familiar, reputable traders. If using an unfamiliar site, research the seller thoroughly and verify available information before placing an order. Sellers are legally obliged to provide contact details, including a full postal address, on their site. It is also recommended that consumers check how long the site has been operating for – fraudulent websites tend to pop up quickly and then disappear when the cash has been handed over.
• Be vigilant with your personal information. Never store passwords or login details on your phone and make sure the website is secure – check for a padlock symbol at the bottom right of the screen, and that the address begins with https://. Don’t click on links in messages and remember that no financial or government institution would ever seek your personal data via e-mail.
• Pay with a safe payment method. Never send cash via bank transfer or money wiring services as these leave no recourse if anything goes wrong. Paying by credit card or Paypal means the consumer can seek redress if they have been scammed.
• Remember that if an offer seems too good to be true, it usually is.