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Senior Program Manager, Tech for Good & TELUS Wise
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.
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?
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?
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?
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.