Scam Websites Prey on Consumers’ Hunger for Retail Discounts

Online retailers have found themselves on the defensive against fake websites targeting bargain-hungry shoppers.

The scam websites purport to offer products from a legitimate company at deep discounts, but consumers soon find they’ve been duped into turning over their credit card info, The New York Times reported Wednesday (Jan. 11).

“It’s been a total game of whack-a-mole,” Dave Heath, CEO of online sock brand Bombas, told the Times. “The second that we report a site and it gets blocked on one of the social media channels or blacklisted, they just spin up another instance and then there’s ads running almost kind of instantly.”

Last year, the company saw more than 9,000 instances in which customers came across phony websites, Heath said. Bombas logged 900 imposter sites, many of which offered discounts.

The report says that scammers have been adaptive, taking advantage of cash-strapped shoppers who waited for holiday-season deals.

“It’s playing on the emotion of the consumer,” said Douglas LaGore, a principal in the cyber security division at KPMG, one of the “Big Four” accounting firms.

Phony websites are just one of many ways scammers have come up with to trick consumers into turning over money or information. As PYMNTS reported last month, retailers are also warning about the rise of fake order confirmations and phony text messages.

“Any communication, whether text messages or email or phone call, that you’re feeling this sense of false urgency, you need to stop and think about it,” Abigail Bishop, head of scam prevention at Amazon, told PYMNTS.

Bishop added that in the case of Amazon, customers’ message centers and order histories are foolproof places for them to confirm purchases.

PYMNTS has also found through its research that while these types of scams target consumers directly and merely use a retailer or brand name for cover, it still has a negative effect on business. Bad online experiences tend to have a ripple effect on customer retention and digital commerce use and trust.

According to the December Digital Fraud Tracker®, a collaboration between PYMNTS and DataVisor, “a smooth experience every step of the way is non-negotiable.”

The study adds that the issue “becomes even more urgent, considering that 56% of buyers said they would share bad experiences with colleagues and coworkers, causing potential loss of clients and revenue in the future.”

The findings also showed that 70% of victims felt stressed about fraud, even when warned, but nearly 40% closed accounts or scaled back usage following a bad experience.

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