Online shopping is one of the simple pleasures of life. Had a bad day? Enjoy some online retail therapy. Got a promotion at work? Buy yourself a reward online. And when a sale comes around, you best believe we’ll have our credit cards at the ready. But while online shopping has made our lives easier, it’s also increasing the risk of financial fraud through online shopping scams.
In April 2024, the ACCC announced Australians had lost an eye-watering $2.7 billion to online scams in the previous year. This is down 13 per cent from 2022, but up 50 per cent in 2021 and 320 per cent in 2020.
The AFCA (Australian Financial Complaints Authority) announced in October 2024, that they had resolved more than 10,000 scams in 2023-34. This included scams from consumers and small businesses. This figure is up 8 per cent from the previous year. However, the monthly average of scams reported has dipped, which the Chief Ombudsman of the AFCA David Locke called “encouraging, but not a cause for complacency.”
“It appears that initiatives such as the Federal Government’s National Anti-Scams Centre and steps like account name checking by some of the banks are starting to have an impact,” he said.
So how can you protect yourself from scams? Especially in a world where we are more distant from sellers and spend most of our money online. Despite growing up with technology, a Deloitte report found that Gen Z was three times more likely to get caught up in an online scam than Baby Boomers. This is because they rely on technology more often, and are more exposed to the threat of scams. Regardless, it pays for anyone, no matter the demographic, to be vigilant when purchasing online.
“Online shopping scams involve scammers pretending to be legitimate online sellers by using a fake website, or setting up a fake profile on a genuine website or social media platform,” says, Yish Koh Managing Director of Commonwealth Bank’s kids’ money app Kit, which is helping educate young people about how to spot a scam.
Here’s what you need to know to keep yourself safe online.
What are the most common online scams?
There are four common types of online shopping scams.
- Scam merchants: “Websites or ads that lure people to spend money without sending out a product, or collect personal information for identity theft,” says Yish. This could be by running a competition on social media.
- Online marketplace scams: “You are selling an item online, and an interested party will ask for a small payment (e.g. to upgrade to a “business PayID” account – which doesn’t exist) before they will pay you, but the payment doesn’t come.”
- Phishing emails/SMS: “Emails pretending to be from a merchant or courier with details of an online shopping order, which may contain suspicious links to gather your personal or bank details.”
- Online gaming scams: “Scammers in online games may try to convince you to give them your virtual currency, tradable characters, or personal information in exchange for something they don’t actually have. Or trick you into buying something (often paying outside of the gaming platform) they don’t have. There are a plethora of websites or apps offering free or cheap in-game currency in return for sharing details, or completing surveys, but which are intended to steal login information.”
How to detect online scams
There are different ways to detect online scams, Yish tells us.
- Be suspicious of any offer that sounds too good to be true — it probably is.
- Do your research — have a look at reviews on Google or social media.
- Look closely at the website address. Scammers try to purchase domains that may be similar but are not the same as the legitimate merchant.
- Be wary of any unsolicited emails, text messages, or phone calls.
- Don’t give out personal information, such as your bank card information, to anyone – including websites you don’t know and trust.
- If a merchant or courier contacts you and you aren’t sure if they are genuine, contact the company. They can verify that they were trying to reach you.
How to protect against online scams
When it comes to online sales, in particular, preparation is key to avoiding scams.
“Plan ahead and research the items you’re interested in buying so that you are less likely to fall prey,” says Yish.
“Be aware that if something is too good to be true, it probably is.”
What to do if you are a victim of an online scam
There are a few actions you should take if you think you have been the victim of a scam.
“If you have not received the goods, contact the merchant,” says Yish. “You can contact your bank to dispute the transaction if you do not receive a response.
“If you have entered your card details into a site that may not be safe, monitor your transactions for anything unusual. If your card is compromised, your bank will typically allow you to lock or cancel your card immediately.
“Forward any scam SMS to 7226 and report it to Scamwatch. If your identity has been compromised, you can also contact IDCare.”
