Part 2 – Buyer beware: get savvy about marketing scams

In part one of our two-part Buyer Beware series, we profiled three popular marketing scams including phony crypto investments, fake reviews and non-delivery dupes.

In part two, we highlight three more scams that are causing frustration and costing people in Canada a lot of money.

#4: Subscription traps

Free trials are a great way to test out a product or service before you commit. However, limited time offers with no strings attached aren’t always what they seem. There is often a catch. Subscription traps come in many forms, but the most common include being charged for the full cost of the product, getting locked into a costly monthly subscription and being charged for things you didn’t order.

To illustrate, there was one company that owned a network of streaming websites, offering customers free unlimited access to what was promoted as premium content. But the movies, books and music on offer weren’t premium at all and potential customers were lured with misleading ads for a five-day trial. After the five days, monthly auto-billing charges occurred costing consumers hundreds of millions of dollars.

How can you avoid subscription trap scams?

• Know the signs: recognize high pressure sales tactics including pop-up surveys, countdown timers and customer queues.
• Have a critical eye: claims and celebrity endorsements can be fake – do more research.
• Read the fine print: take the time to familiarize yourself with the terms and conditions of the offer.
• Stay vigilant: keep all receipts and communications and check your credit card statements often for unwanted charges.
• Act on your suspicions : if you fell victim to a fraudulent offer, contact your bank and stop payments right away and report your experience to the appropriate authorities.

#5: Home improvement scams

The Better Business Bureau (BBB), which advocates for education to protect consumers, released its Scam Tracker Risk Report in March 2023. Home improvement scams topped the list of the top 10 riskiest scams in 2022, with reports of home improvement scams increasing 51.2% last year. Median dollar loss for this type of scam was $1900, a dramatic 187.4% increase from $661 in 2021.

We’re all familiar with the spam calls from the duct cleaning companies. But many home improvement scammers peddle their cons door-to-door, taking advantage of a misplaced sense of trust of engaging in real life vs. online.

How can you avoid home improvement scams?

• Question the offer: fast turnaround, super cheap prices and cash only deals can indicate a potential scam.
• Be wary of people that solicit you: with such an important investment, it’s advisable to go out to your network of friends and family for recommendations for trustworthy, proven professionals.
• Get proof of legitimacy: websites can be made up or brand spoofed. Ask for specific details including ID, licensing and insurance.
• Shop around: with such a significant investment, getting multiple quotes can help you gauge the industry standard price for the type of work you are looking to get done.

#6: Third-party sellers

If you shop on sites like Amazon or Walmart, chances are you’ve come across third-party sellers in their marketplaces. These big companies have policies and mechanisms in place to verify the legitimacy of these sellers. But sometimes, scammers find the loopholes.

In March 2022, Market Watch reported on a third-party seller that managed to steal $1.3 million from Amazon over seven years selling fake items and gaming the refund process. He created multiple seller accounts on Amazon offering high-ticket furniture and home décor at lower prices than other sellers. But he never shipped the items. Sometimes he would send a cheap crystal ornament, so the customer would receive a tracking number, delaying any refund requests to Amazon. He was able to figure out the timeframe required for the money to land in his account before the customer requested a refund. He now faces 20 years in prison for his crimes.

How can you avoid third-party reseller scams?

• Know who you’re dealing with: if you see sold by, shipped by or fulfilled by, a third party is likely involved.
• Be wary of unusually low pricing: do your research so you roughly know the cost of what you’re coveting. If you find a moderate deal, great! If it seems too good to be true, it most likely is.
• Read profiles: familiarize yourself with return policies, shipping prices and customer service contacts of the vendors you are doing business with.

Shopping online and taking advantage of door-to-door sales can offer great convenience. But there are always going to be people who want to exploit others for a quick buck. It’s important to differentiate good marketing from deceptive marketing. Spotting the difference early and often can help you save yourself time, frustration and money.

Check out this TELUS Wise online basics video on shopping online for more tips to protect yourself.