BBB: Online Purchase Scams Riskiest Fraud of 2017
Online purchase scams are now the riskiest form of consumer fraud, according to a new report released by the Better Business Bureau. The announcement comes on the heels of more than 47,000 online scams reported by consumers in 2017 to BBB’s Scam Tracker.
Released as part of National Consumer Protection Week (U.S.) and Fraud Prevention Month (Canada), the BBB report which measures scam risks and emerging trends, shows significant changes from the previous year:
- Tax collection scams fell by 60 percent;
- Online purchase scams grew from the fourth-riskiest to the most risky scams;
- Home improvement scams fell from the first to sixth riskiest.
The most common online purchase scams in 2017 were related to pets, clothing, cosmetics, electronics and automobiles. A common tactic was free trials of online products: 67 percent of scams involving cosmetics and 60 percent involving nutrition products mentioned a free-trial opportunity.
Another significant increase was in the category of investment scams, which tends to target older age groups and come with a higher average monetary loss. This scam type jumped from the sixth riskiest in 2016 to the second riskiest in 2017.
The top ten riskiest scams in 2017 according to the BBB were:
- Online purchase scam (up from #4 in 2016)
- Investment scam (up from #6 in 2016)
- Employment scam (no change)
- Advance fee loan scam (up from #5 in 2016)
- Fake check scam (down from #2 in 2016)
- Home improvement scam (down from #1 in 2016)
- Tech support scam (up from #8 in 2016)
- Travel/vacation scam (new to top 10, #12 in 2016)
- Family/friend emergency scam (no change)
- Government grant scam (new to top 10, #11 in 2016)
Regardless of the scam, scammers often rely on the following tactics:
- Promises of a great deal (that sounds too good to be true);
- Pressure to respond immediately to an offer where price and availability cannot be guaranteed;
- Intimidation (“You are under federal investigation,” or “You will be arrested within one hour if you don’t call this number”);
- Isolation, which aims to force a decision without consulting others.
The BBB warns that scammers can be clever, very personable, and are always changing their tactics. All consumers are advised to be wary of potential scams. Youth tend to be at higher risk of falling for scams, though older people tend to lose more money.
Despite the many possible dangers, the BBB report does hold some good news for consumers.
“Although we saw an increase in total scam reports, the good news is that susceptibility was down,” said Melissa Trumpower, director of programs and operations with the BBB Institute and co-author of the report. “The percentage of those reporting who actually lost money to a scam fell from 18.8 percent in 2016 to 15.8 percent in 2017. We also saw a 17 percent decrease in the median monetary loss, down to $228.”
For more information on specific scams and tips on how to avoid them, visit BBB.org/ScamTips.