The rapid growth of ecommerce has revolutionized the way in which people buy and sell goods. Over the past year, U.S. ecommerce reached its highest annual growth in at least two decades – up 44% over the previous year to a whopping $861.12 billion! – largely in part because of the coronavirus pandemic (COVID-19). (1) While people have been spending more time at home and social distancing, consumer spending habits have shifted drastically, putting ecommerce at the forefront of retail. This shift has provided greater convenience for consumers during stay-at-home orders; however, it has also created more opportunities for counterfeit goods and online scams to penetrate our communities and homes.
How Fake Websites Work
Unlike a physical store where inventory is controlled through an established and routine supply chain system that verifies the legitimacy of suppliers and their products, ecommerce platforms operate more like virtual flea markets, allowing individuals to advertise and sell their products to consumers. (2) Unfortunately, falsely selling and trafficking illicit goods is no longer confined to street-corners and flea markets.
Scam websites are aimed at consumers with specific interests, and they typically follow the headlines. In other words, they typically leverage what is happening in the news to get peoples’ attention and convince them to spend their money. Often times, counterfeit products are listed by imposter sites located overseas.
Scammers typically rely third-party services like PayPal to processes consumers’ payments. They will also create hundreds of accounts on the platform, using various email addresses so as not to get caught easily. Things get even murkier when consumers complain to PayPal about never receiving their orders. One of three things typically happens:
- The seller does send a shipment, but the contents inside aren’t relevant to what was ordered and are typically worth pennies compared to what the consumer actually paid. When the package shows as “delivered”, Paypal routinely rejects any dispute claim that the consumer makes.
- The seller provides Paypal with a fake tracking number, which leaves the consumer empty handed while the seller gets paid. Unfortunately, Paypal typically sides with the seller as long as they do provide a tracking number, even if it is not legitimate.
- The seller deletes one of their accounts on Paypal after they accept a consumers’ payment and then moves on to using a different account to start the scheme all over again and scam someone else. The same thing will happen if a scam website receives too many consumer complaints.
The Implications of Fake Websites
Ultimately, fake websites have duped tens (if not hundreds) of thousands of victims across the US and abroad into making online purchases, even when no orders were actually shipped or received. Counterfeit goods sold to consumers by ecommerce platforms and online third-party marketplaces do in fact threaten public health and safety, as well as national security. This illicit activity also directly impacts business innovation, competitiveness of manufacturers and workers, as well as consumer trust.
We can certainly attest to this at Kymera. After our appearance on Shark Tank, our business grew substantially – not just in the U.S., but also internationally. Scammers have repeatedly ripped videos and photos of our unique electric body boards from our website, and from many media outlets that feature us, which they use to create fake storefronts and collect money from consumers. Over the past year, we have seen a dramatic increase in the number of people who have been duped, wondering where their Kymera Body Board is after they tried to purchase one from a counterfeit website. And unfortunately, it is very difficult for consumers to get their money back from Paypal once the scammer has cashed it and run.
How to Spot and Avoid Fake Websites
It is very important to us that we do everything we can to protect consumers from buying counterfeit items on the Internet. Here are a few tips to follow:
- Pay attention to the address bar
Does the website show https:// or htts:// (no S) at the beginning? The “S” is important as it stands for secure and indicates that the website uses encryption to transfer data. This encryption is a layer of protection for consumers against hackers, especially if they are inputting sensitive data (i.e. credit card information).
If a website uses http:// (no S), that doesn’t necessarily mean that a website is a scam, but this is a potential flag to be aware of. Also note that some internet browsers are better than others in terms of letting consumers know whether a site is secure or not. You may see a padlock near the address bar if a website is secure, or you may see “Not Secure” shown in this area.
- Check the domain name
Scammers are looking for ways to get peoples’ attention and money quickly. One of the most effective ways for them to do that is to create website that look like large brands or companies – starting with the URL. They might choose a website address like nike.net or Yah00.com to mimic other sites that you may be familiar with in the hopes of you skimming over the page quickly and falling into their trap.
- Be on the lookout for poor spelling and grammar
Legitimate companies typically don’t have spelling or grammatical mistakes throughout their website. If you notice these types of errors on a website, it could indicate that it was created quickly and/or that it belongs to someone overseas whose native language is not English.
- If a deal seems too good to be true, it probably is.
This one may seem cliché, but it really is true. We have had many people ask us why their Kymera Body Board that they purchased for less than $50 never arrived. This is how we immediately know that they unknowingly gave money to a scammer as our boards cost over $5,000 USD. Given that we are in the water sports industry, there is some onus on the consumer to do their research when they are looking for suitable products for their lifestyle. The same can be said when purchasing any product online. If you find a website that claims to have the latest iPad model or jet ski listed at an 80% discount, walk away.
- Check online reviews
A company’s reputation is very important. You can research the reputation of the seller through various official review sites, such as the Better Business Bureau, Google, and Yelp.
- Only use secure payment options
Most websites give consumers multiple payment options, such as credit or debit cards and Paypal. If a website requires you to pay for a product via wire transfer, money order, or some other unsecured (and nonrefundable) form of payment, this is a big red flag of potential fraud.
- Look for reliable contact information
Legitimate brands and companies want to interact with their customers and do what they can to offer support when it’s needed. Scam websites on the other hand are set up with zero intention of helping the consumer while executing a fraudulent scheme. When shopping online, look to see how you can contact the company (phone, email, live chat, physical address) and give at least one of these methods a try. Additionally, verify their social media accounts. Beware of “live” chats that generate automated responses. These are often set up to make the website look more legitimate but may not be monitored. It is a good sign if they have someone answering the businesses’ phone; however, if a website’s only contact method is an online form of a spoof website, beware.
The bottom line: Always be wary when shopping online. Ask questions, use a secure form of payment, preferably on a secure website. Be sure to save any emailed receipts or other documents involved in your online transactions. And of course, trust your gut.