Recent events have given the e-commerce industry a steroid induced growth spurt that online scammers all over the world are rushing to take advantage of. Sophisticated fraudsters are now offering their products to unsuspecting consumers on slick websites, complete with excellent pre-sale service support. Even the usually wary consumer can find himself falling prey to these cons, as experience has taught scam artists to offer prices that are good, but not too good to be true.

Studies indicate that 1 in 10 adults fall victim to scams every year.

Since many orders are being fulfilled on international supply chains, long wait times between order and actual delivery has become a norm. As a result, it can take considerable time and effort by customers to determine whether they have been cheated or simply had their items lost in the mail. This compounds the problem as the longer a customer waits before reporting a suspicious transaction, the harder it becomes for authorities to take any action, let alone recover any money.

However, although con-artists now take great pains and efforts to conceal the obvious red flags, the discerning customer can still take some steps to protect himself/herself from falling prey to e-commerce scams.

1. Check for SSL security certificates installed on websites by inspecting the address of the site. If it starts with “https” instead of just “http”, it means the site owner has at least taken some steps to safeguard any information you eventually enter on the site. However, this is not a fool proof level of protection as hackers have managed to find ways to work around the security layer. Nonetheless, if the site does not have an SSL certificate installed, it is best to not even consider entering any payment information on it, as there is a significant risk that any data you provide can be stolen by hackers even if the site you are making the purchase from is known to be legitimate.
2. Look for, then test contact information you find on the site. Before you make a purchase from an online vendor, you should validate the company’s contact information. Do they have a valid operating address or have they listed just a secretarial office? Does the company provide a domain specific email address such as “[email protected]” or are they using a generic domain that anybody could freely sign up for? Do they have a contact number? Legitimate companies want to be easily contacted by customers, so they would offer as many different ways to contact them as possible. If the only contact information provided on the site is a generic email address, that is a big red flag.
3. Use PayPal or a debit card instead of your credit card. Using a debit card with limited funds ensures that even if your data is stolen, your immediate risk is limited to the value stored on the card. Using PayPal offers some level of risk mitigation as you may be able to leverage buyer protection features to protect yourself in case things go wrong. As far as possible, never directly enter your credit card information into an unfamiliar website.
4. Check for licensing controls. Some products like hazardous, explosive or corrosive chemicals, firearms including replicas, explosive devices, medical devices, pharmaceuticals, foodstuff, narcotics, tobacco or alcohol can require licenses for import. Licensing controls in many countries will depend on the HS code of the item, technical specifications of the product and the total quantity being imported. It is always a good idea to check for any such restrictions before you place an order. One common scam is to inform customers that the products they ordered need import licenses that require fees to be paid quickly. If you already did your homework, you will be in a better position to confidently handle such situations should they arise.
5. For large and bulky items, or at least for items that go above the formal entry value for Customs, check the Incoterms used for the transaction. A good rule of thumb here is that the seller should be selling to you on Delivered Duty Paid (DDP) terms. This means that the seller acts as the importer of record in your country and all you do is wait for the goods to appear at the agreed place of delivery. For large, heavy and/or bulky items, as an added precaution you should also ensure that the sales contract mentions that the seller will do the unloading for you. Using any other Incoterm may put you at risk, since the relevant responsibilities and obligations may come as a surprise to you. The seller, who would undoubtedly be familiar with the legal implications of where responsibilities and liabilities lie depending on the terms used, may choose to be crafty with the default sales agreement you would have agreed to as part of the online purchase. This would leave you to clean up the mess and pay all additional costs out of your pocket, while the seller has technically made good on his or her end of the deal.
6. Research for more reliable sources for the same product. Some online market places have been around for a long time and have built a strong reputation for themselves. If any online vendor seems suspicious, explore trusted marketplaces for the same or similar products instead. Using an online market place that has in-built buyer protection features may increase the costs of the purchase slightly, but for big ticket items the peace of mind it brings may well be worth it.
7. Insist on receiving a shipment tracking number as soon as possible. Within a few days of placing your order, the vendor should have handed over your products to a freight forwarder for transport to your location. Request for the shipment tracking number. Once you receive it, use any one of the free shipment tracking sites available online to track it. Any details you can see related to the package should be accurate. If anything seems to be suspicious, contact the freight forwarder directly to make clarifications.

A final word

Despite the associated risks, e-commerce plays a significant role in the new norm of consumer behavior. It also makes a wider variety of products available to consumers at competitive prices. Moreover, with the pandemic shuttering many local stores, consumers in many parts of the world cannot avoid making purchases online. As online scammers evolve as they undoubtedly will, so too must the consumer learn to take precautions to reduce risks when dealing with sellers located in different parts of the world.

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