Online safety / April 03, 2023

Part 1 – Buyer beware: Get savvy about marketing scams

Amanda Lee

Amanda Lee

Senior Program Manager, Tech for Good & TELUS Wise

Concerned young woman in wheelchair looking at smartphone

We are buying a lot online, scams are multiplying and becoming more intricate.

According to the Canadian Anti-Fraud Centre, fraud and cybercrime resulted in $530 million in losses in 2022 (up 40% from 2021). How can you protect yourself? Knowledge is the first step. As an online consumer, it’s critical to know how to spot a marketing scam and take the appropriate steps to avoid falling victim.

In part one of this two-part series, we are outlining three of the six most prevalent marketing scams that are currently costing people in Canada a lot of money.

1. Crypto

Everyone wants in on crypto. It’s touted as quick, easy money; however crypto is still relatively new and generally misunderstood.

In 2022 losses from crypto investment fraud totalled $308.6 million, up from $164 million in 2021, as reported by the Canadian Anti Fraud Centre. Crypto scams also claim the second spot in the Better Business Bureau’s ranking of the top 10 riskiest scams. Their risk index accounts for three key factors: exposure (volume of reports), susceptibility (percentage of people who lost money) and monetary loss.

In a January 2023 story, Global News detailed how the now popular “pig butchering” crypto scam originates and plays out. It starts when someone clicks on a fraudulent crypto trading ad online. They then receive an unsolicited message via text, email or social media and are quickly asked to move the communication to another, harder-to-trace messaging platform. Once a relationship is established, the scammer asks for a deposit. Fake screenshots of account statements showing large gains then follow. This technique is known as “fattening the pig.”

In addition to victims getting tricked into sending funds for fictional crypto accounts, they might also be convinced into downloading malicious trading apps or file sharing software which give scammers access to personal/financial information, or engaging with fake recovery specialists who promise to help get lost money back.

How can you avoid crypto scams?

  • Avoid the urge to act impulsively: take time to consider the offer and do more research. Crypto transactions can’t be reversed and once money is sent, it’s hard to get it back.
  • Be wary of offers that are too good to be true: if it sounds that way, it probably is. Offers to make fast money online are typically false promises.
  • Verify: check into the companies you are dealing with by researching them with regulatory bodies. Make sure they are Canadian-registered crypto trading platforms or dealers.

2. Fake reviews

Reviews have become a vital part of the digital economy and can be incredibly helpful in getting an unbiased opinion about hotels, restaurants, doctors and more. But what you read may not always be what it seems.

Fake reviews are a common practice online. Many companies recruit employees or hire reputation management firms to post positive reviews to influence their ratings and get a leg up on the competition.

How can you tell if reviews are fake? Typically, you’ll see a surge of glowing reviews in a short time period. Fake reviews often aren’t specific – lots of exaggerated praise, but no real explanation as to why the product/service/location was so great. They also have a scripted feel – a common language, tone and overuse of buzzwords.

How can you avoid falling prey to fake reviews?

  • Do your research: get a well-rounded perspective on the product/service and the company providing it.
  • Look for the patterns: go deep into the review history and see if you can spot spikes in positive reviews in short time periods.
  • Find balance: dig into the moderate or negative reviews for a balanced perspective.
  • Talk to people you know and trust: enlist the help of friends, family and representatives from the company to get firsthand accounts of any experiences with the product/service and/or company.
  • If you suspect, report: government agencies like the Competition Bureau Canada take fake reviews very seriously and offer mechanisms for reporting.

3. Non-delivery scams

You’ve been seeing the ads all over social media and finally decide to buy. Your transaction goes through and you are notified about the expected delivery date. The day comes. No package at your door. In fact, the purchase never arrives at all. According to the Competition Bureau Canada, in 2020 alone, merchandise scams, including non-delivery, accounted for $8.7 million in Canadian losses.

Going one step further, some scammers are now leveraging online deliveries to hook people into phishing scams. A recent City News story detailed the experiences of a Toronto woman who was expecting delivery of purchases made online when she received a text from Canada Post asking her to pay $1.25 to have the delivery rescheduled. The text requested debit card information, as well as her email and date of birth. She became suspicious and called her bank, requesting to cancel her debit card and freeze her accounts. According to the Canadian Anti-Fraud Centre, in January 2023 alone, there were 200 reports of this “brand spoofing” phishing text trying to take advantage of people buying online.

How can you avoid non-delivery scams?

  • Read the fine print: review the refund and return policies to understand what’s promised.
  • Read the reviews: make sure you can get a balanced perspective from actual buyers and look for any red flags.
  • Do your research: confirm the company is legitimate by reading its web site, contacting actual company representatives, looking for any negative media stories and consulting with the Better Business Bureau.
  • Use your credit card: if a purchase turns out to be fraudulent, you have an extra layer of protection.
  • Keep records: include the company’s web site, any claims about shipping, purchase date, any correspondence and all receipts.

Check out this TELUS Wise online basics video to learn more about avoiding online scams and look for Part 2 of the Buyer Beware series coming soon.

Online banking & shopping
Frauds & scams
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