By Tj Horan vice president of product management, leading the solutions of Fraud
Welcome to the holiday shopping season for 2021, the second impacted by the pandemic. Global Supply chain issues and scenes of countless ships waiting to unload their global cargo have certainly reminded us all of how interconnected we are around the globe. When we combine those logistics challenges with lingering fears of entering crowded malls, we have certainly injected a heightened level of stress and scarcity into this year’s e-commerce bonanza.
However, spending is booming too! E-commerce surged 26 percent in 2020 and is expected to grow 17 percent this year. The final quarter of 2021 is expected to hit $910B, an 11 percent rise on last year.
This busy and complex environment provides the perfect conditions for consumers to fall for scam deals or buy products that aren’t quite what they expected. Not to mention, the window for fraud has grown because retail events kicked off in October to counter concerns about supply chains and logistics.
Growth in e-Commerce has Seen Fraud Surge
The fraud problem has gone viral. Three-quarters of retailers across the U.K., U.S., France and Germany have seen fraud increase during the pandemic. A further third of global retailers say they have lost 5% to 10% of revenue to fraud last year. Online fraud has become a massive issue, so it’s important to be aware of the impact on consumers as well. For instance, online shopping scams in the U.K. surged by 65% over the year, with more than £69 million lost. In the U.S. digital fraud was up 25% in the first four months of 2021 and continues to grow during the holiday season.
With that in mind, there are actions you can take right now to protect yourself from fraud and identity theft, regardless of your location around the globe.
Tip #1: Revisit Your Password Habits
So many of us write our passwords down in a diary or an online doc or worse, use the same three passwords for almost every online account (and we all know that “three” might be generous). There is a better way to safeguard accounts during the holiday season; your new habit should be to use a password manager. Go ahead, make this your New Year resolution!
These effective and simple services store your passwords in the cloud so you can use them anywhere. They work using high levels of security and you only need to remember a single master password coupled with your phone’s biometrics or an OTP to access all your data.
Importantly, these services help you create unique passwords for each account that are both complex and long. This is important, as when hackers try to use brute-force computing power to input thousands of random passwords, it’s the length and strength of a password combined that becomes the most effective deterrent.
Remember to use a unique password for each of your accounts, particularly important ones — not just bank and brokerage accounts, but PayPal, Gmail and Amazon, everything!
Tip #2: Think Before You Click
It's the giving season — during a pandemic — which multiplies the opportunities for fraudsters to try to scam you. Check twice before clicking on an SMS or email to confirm it is genuine. Look at the design, copy, spelling and of course the intended URL link to see if its genuine. Better still, navigate to the intended site yourself, without clicking on the link, to be sure you’re reaching the genuine landing page.
In 2021 we have seen a huge increase in parcel delivery scams, with more than 60% of Britons receiving at least one fake text in the past year. These messages often include a "tracking link" that you are urged to click in order to update your delivery or payment preferences. You might also get a voicemail message with a call-back number, or a "missed delivery" tag on your door with a number to call.
It’s very easy for criminals to create lookalike websites of postal or parcel delivery companies that siphon off credit card and personal information, which can then be quickly used to run up fraudulent transactions.
Tip #3: Don’t Act In Haste
We all know someone in our social circle who has bought a pet to help with the isolation of lockdown or as the perfect family antidote to a tough year.
Unfortunately, rushing to get a new pet in the unusual circumstances of COVID-19 makes it harder to be sure what’s real or a scam. Fraudsters will scrape the photos and details from genuine dog breeders and set up copycat websites or social media accounts to scam people.
The scammer will usually ask for up-front payments via money transfer to pay for the pet and transport it to you – they may pile on the pressure, even persuading you that your new best friend will go to someone else if you don’t make the payment now. Then once you have paid, they will find new ways to ask for more money like using the COVID-19 pandemic to claim higher transportation costs to get across closed interstate borders or additional fees for temperature-controlled travel boxes or various medical treatments.
Australians have lost $2.5M in pet scams so far this year, so it’s important to do your research on sellers. Google the person’s name and web copy, check for customer reviews, do a reverse image search to see if you find a duplicate site. Insist on meeting up in person, and if you are in doubt seek advice from a vet, local pet shop or breeders association. But my best advice of all is to explore all your options at local animal shelters when looking for a new furry (or not!) companion. Fortuitous timing allowed my household to adopt two cats (brother and sister) from a shelter about a month before the pandemic hit in early 2020 and they’ve made an amazing difference in our lives. Adopting from reputable local animal shelters not only gives a deserving animal a home but also helps you avoid some of the pet scams!
This approach isn’t limited to pet scams, fraudsters know if they build up a sense of urgency you may act in haste. If you’re being pressurized to make a payment straight away, stop and give yourself time to think.
Tip #4: Be Skeptical of Amazing Deals
Whether you think you have found the last baby Yoda toy, been offered a lucrative stock or cryptocurrency tip or been fortunate enough to find a fantastic holiday deal, you need to stop and ask yourself, “Is this too good to be true?”
Everyone likes to think they might have gotten lucky, but it pays to pause and check-in with your inner skeptic. Are your internet sleuthing skills really that good that you managed to find the very last item? Scarcity is a persuasion tactic that is used by legitimate retailers but also by scammers. Remember that scams succeed because they look like the real thing and catch you off guard when you’re not expecting it.
Stick to legitimate retailers, be wary of new retailers advertising to you in your social feed. Google the name of the company plus the word “complaint” to see what consumers have said about it. When you shop online think about the payment method you use and if your provider offers additional protection – for example paying by credit card generally allows you to recover losses to fraud.
Tip #5: Communicate Directly with Your Bank
Bank scams are a common way for criminals to gain access to people’s personal and financial information. In 2020, the Federal Trade Commission received more than 2.1 million fraud reports from consumers. Phishing scams are popular because of the accessibility of reaching large numbers of people through email and text messages.
If you receive a fraud alert from your bank by SMS don’t click on any links, even if the message mentions suspicious activity on a personal account. Log directly into the mobile app or site for your bank or card to make sure it’s real. Ensure any communication with your bank or credit card company is direct.