How to protect yourself against fraud while shopping or selling online this holiday season

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Net Patrol International Inc.  Data Investigation and Forensic Services
Bankruptcy and Insolvency Trustees

November 26, 2020 – ‘Keep the Grinch out of the holidays,’ warns the Canadian Anti-Fraud Centre (CAFC) in their recent bulletin on holiday scams. Fraudsters are taking advantage of people’s increased online activity during the pandemic and especially during events as ‘Black Friday’ and ‘Cyber Monday.’ Stay vigilant if you plan on shopping or selling products online this holiday season.

Online shopping scams or e-commerce fraud

Due to the pandemic, more people have shifted their shopping endeavors online and fraudsters are exploiting the situation. In 2019, already 1,759 victims reported 2,452 online shopping scams to the CAFC with a combined loss of more than $2.5 million, which made it one of the top frauds affecting Canadians last year.

Read more: CAFC’s list of top frauds in 2019

The agency warns online shoppers to be vigilant because ‘fraudsters easily create websites that share the look and feel of legitimate manufacturers.’ They use classified ads sites, resale sites, website pop-ups, as well as fake company apps and websites under an intentionally misleading, legitimate-sounding name. The rogues often reach their victims and create traffic to their sites by advertising their products at huge discounts. Subsequently, it is recommended to stay clear of online ads for cheap or scarce items like hand sanitizer and cleaning products. If it sounds too good to be true, it probably is.

Other red flags are spelling mistakes and grammatical errors, no customer phone number or email listed on the website, as well as, if the transaction is in a different currency.

The American FTC also recommends to ‘read the seller’s description of the product closely, especially the fine print. Words like ‘refurbished,’ ‘vintage,’ or ‘close-out’ may indicate that the product is in less-than-mint condition, while name-brand items with bargain basement prices could be counterfeits.’

Apart from that, the only purpose of some websites is to steal the personal information of the shoppers. In other cases, consumers may receive counterfeit products, lesser valued, and unrelated goods, or nothing at all. According to the CAFC, counterfeit products are not only upsetting for the buyer, they could also pose significant health risks.

How to protect yourself

  • Only shop at secure websites.
  • Researching the website before placing an order by verifying the URL and seller contact information.
  • Look at the URL of the website to see if it starts with ‘https’ and displays a tiny padlock icon in the address bar. If it begins with ‘https’ instead of ‘http’ it means the site is secured using an SSL Certificate (the s stands for secure).
  • Search for any warnings posted online and read reviews before making a purchase.
  • Beware of pop-ups that direct you away from the current website.
  • Use a credit card when shopping online. Consumers are offered fraud protection and many receive a refund. If you have received anything other than the product you ordered, contact your credit card company to dispute the charge.

Online sellers or sale of merchandise fraud

The CAFC also warns online sellers against fraudsters. Sellers, who have posted an online ad may be contacted by fraudulent prospective customers.

These cybercriminals use various tactics to dupe the seller when it comes to paying for the product. Often fraudsters claim to be located out of town and offer to buy the item unseen and then in most cases, consumers will receive fraudulent payments from compromised accounts or counterfeit cheques.

‘Unfortunately, the consumer will only discover that they have not received a real payment until after they have already sent the merchandise and/or sent additional funds to a third party,’ explained the CAFC in their bulletin. Online sellers should be cautious about bad spelling and grammar while communicating with any prospective customer.

Spoofed payment

One tactic of online criminals is to send out a fake message or email money transfer notification to the seller. These messages claim that the payment is pending and to release the money, the seller must provide a tracking number for the shipment. However, since the payment notification is spoofed, there is no payment pending and the seller lost the product.

Account problems

Some scammers falsely say that they cannot send the money because of a problem with the seller’s Paypal or bank account. Subsequently, they claim that the seller needs to pay $500 to get a business account with the selected payment provider to complete the transaction and offer to pay the fee if they get reimbursed for the cost. After the seller has sent the reimbursement to the fraudulent buyer, the seller discovers that there is no payment pending.


The CAFC also described a fraud tactic where the scammer apparently sends the seller a payment that is higher than the asking price. Thereafter, the scammer explains that it was an honest mistake and asks to simply send back the excess funds to them. But after sending the funds, the payment turns out to be fraudulent.

For the fraudulent payment, scammers often use compromised bank accounts, fraudulent cheques, or stolen credit cards.

How to protect yourself

  • Never send merchandise without confirming that payment has been received. Digital payments are either sent and received or not. They will not be pending until a tracking number is received.
  • Never send money to get money.