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Growing online shopping leads to fraud, study says
FOX 26 Consumer Reporter Tom Zizka has more on the study and what it could mean for you.
One of the big changes for a lot of us, during the pandemic, has been the way we 'shop'. Online commerce has seen tremendous growth and a spike in fraud as well.
Retailers have always had to deal with people trying to rip them off, but with so much business turning to online transactions, it can be harder to catch the crooks in the act.
Sally Moore knows all too well. While her Tomball glass-blowing business, Three Dimensional Visions, is hot every day, the pandemic had a chilling effect on sales.
"We really only got the online store going, during Covid," she says.
The website for her glass studio offered a Covid-safe way to browse. When one guy called, last summer, offering to buy $9,000 worth of art, Moore was excited for the sale.
She admits, though, initially ignoring some troubling hints: The buyer would call from different area codes. He demanded she use his shipper and insurance, even though there was no record of those companies. She was also curious about where the art would be sent.
"I'm not saying that someone who owns a trailer, in Kentucky, wouldn't be interested in some wall art," Moore says. "But $9,000 worth of wall pieces in a trailer is sort of unusual."
Beth Guide's company provides marketing and IT oversight for retail websites.
"They're desperate to make the sale, so their guard is down," says Guide.
She convinced Sally Moore that she was likely being scammed, but it's not a new problem.
A new study from e-commerce fraud fighter, Signifyd, finds fraud attempts are up 350%, in 2021, while shipping and return fraud scams cost retailers around $43 billion dollars, last year.
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Much of the trouble lands on so many companies that have turned to online sales, simply to survive, while they may have been unprepared to protect themselves.
"It has forced people into places that they don't belong, without somebody holding their hand," says Guide.
The problem hit large companies, as well. Last month, a North Carolina man pleaded guilty to scamming Amazon out of nearly $300,000 with fraudulent returns. Companies, large and small, will ultimately pass those losses onto consumers and make everything a bit more expensive.