Online Shopping Scams: Prevention and Reporting Fraud

SouthState customer shopping online.

It only takes a few clicks on your laptop or phone to find the perfect winter boots, football jersey or new dining table. Those clicks can also lead you to a harmful website designed to steal your credit card information, conduct identity theft, or sell you a product you never receive.

The Federal Trade Commission reports nearly 266,000 cases of online shopping and negative review scams in 2023 nationwide.

We’ve outlined some best practices to help you avoid online shopping fraud.

How can I avoid being scammed online shopping?

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If you’re a bargain hunter or on a budget, an amazing deal on the toy of the year is difficult to pass up. Remember: if it seems too good to be true, it likely is – especially online.

Be on the lookout for these red flags, especially when shopping on social media:

Unusually low prices

If you’re shocked by the price of that designer handbag, consider it a red flag. The Facebook ad may look convincing, but scammers may be selling you a fake or plan to charge your credit card without sending you the item.

Unusual payment methods

Not every scam revolves around credit or debit cards. Some fake shopping websites may ask for a wire transfer or online funds transfer to complete the purchase. Be wary if the seller isn’t allowing you to pay through secure methods.

Read the fine print

Is that low price because the item is damaged or open box? Understand what you’re purchasing before spending, especially if it’s expensive technology that may be refurbished.

Inactive social media

Social media ads are abundant, especially on Facebook and Instagram. If you visit an Instagram profile from an ad, pay close attention. Is the page brand new but has amassed hundreds of followers? Are there any privacy or contact details for the store? Check the tagged photos for anyone who posted about being scammed and tagged the profile.

What are ways to avoid being scammed online?

Do your research

If a company is scamming people with inferior products or fraudulent charges, chances are that a victim has reported them to a consumer protection agency.

You can also Google the name of the store or brand along with the word “scam” or “fraud” to see if other consumers have filed fraud reports.

Verify the seller

It’s wise to be cautious when you’re shopping from an online retailer that’s outside of the major brands. There are factors to look for that can help you determine if a store and its products are legitimate. 

  • Clearly outlined refund and return policies
  • Customer service information listed on the website
  • Verified social media pages
  • Secure payment methods – look for a URL with “https”

You can also use the Better Business Bureau’s online retailer search tool to learn more about a business before you buy.

Secure your spending

It’s good practice to use a credit card when shopping online. You may be charged twice by a scammer or never receive your item. Paying by credit card allows you to dispute the charge with your credit card company.

What can I do if I think I’ve been scammed by an online store?

You’ve waited months to receive an item that never arrives or you notice unusual activity on your debit or credit card. What should you do next?

  • Contact the store’s customer service to see if the item you ordered is backlogged or experiencing a shipping delay. Use email so there is a paper trail.
  • Request a chargeback if you’ve used a credit card.
  • Contact the gift card company right away if you paid the seller with a gift card. Provide any receipts or proof of purchase.
  • Contact your bank immediately if you paid via wire transfer or electronic funds transfer.
  • Report the seller to the Federal Trade Commission at The FTC advises reporting a business if you even suspect fraud. Each report filed can make a difference in preventing future scams.
  • File with your state attorney general or local consumer protection agency. Share what personal information you gave to the seller.

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