American shoppers need to be extra cautious this holiday shopping season. Comparitech’s analysis of publicly-available data indicates the number of American consumers reporting online shopping scams is decreasing, but the amount of money lost is increasing.
In 2022, 365,138 Americans fell victim to online shopping scams, losing almost $774 million. Even though these figures are around 100,000 cases lower than those reported during the pandemic (2020 and 2021), damages remain just as high.
Self-reported scams registered by the Better Business Bureau (BBB) more than doubled in 2023. In 2022, it received 11,025 reports with losses of just over $6.3 million. So far this year (to mid-November), it has received 23,523 with losses totaling nearly $20.1 million.
Our analysis is based on data from the IC3, FTC, and BBB. 2023 data is not available from the IC3. FTC data runs up until Q3 2023 and BBB data to mid-November.
Key takeaways:
- 365,138 Americans are reported to have fallen victim to an online shopping scam in 2022–a 21 percent decrease on 2021’s figure of 461,463
- $774 million was reportedly stolen in online scams in 2022–a slight decrease on 2021’s figure of $782.4 million
- 228,497 online scams have been reported so far this year (no data available for IC3) with losses of $257.4 million (BBB and FTC data only–the IC3 accounted for most losses in previous years)
- According to the latest figures from the BBB, the number of cases and amount lost have more than doubled this year (with 1.5 months to go). Cases have jumped by more than 113 percent (up to 23,523 from 11,025) and the $ amounts involved by 218 percent (up to $20.1m from $6.3m)
- The FTC has also noted an increase in the $ amounts involved in online scams so far this year. From Q1-Q3 of 2023, it has received 204,974 cases with losses of $237.3 million. From Q1-Q3 of 2022, it received slightly more cases (213,629) but noted lower losses of $211.2 million
- As we will see below, the BBB often sees higher volumes of complaints around the holidays and in the first few months of the following year, suggesting these types of scams are rife at this time of year
Online shopping scams are a top consumer threat
From 2020 to mid-November 2023, 1.54 million Americans have lost $2.37 billion to online shopping scams.
While case numbers haven’t necessarily risen, the amounts involved have. This perhaps suggests that scammers’ tactics have become more successful, meaning fewer scams are generating higher profits.
That said, 2023 has seen an uptick in cases and $ amounts involved. Even though it’s difficult to calculate exactly what 2023 will entail without the IC3 figures, the ones that are available suggest 2023 will equal 2022’s figures–at least.
Holiday shopping season proves to be the worst for consumers
Black Friday, Cyber Monday, and all of the other sales and offers around this time of year give scammers opportunities to cash in on people’s impulse purchases. It’s the perfect melting pot for online scams.
All of the hype surrounding bargains and sales at this time of year means a large number of purchases (46 percent) are carried out on impulse on Black Friday. Add the huge rise in fake e-shops (Norton engines detect as many as 1,000 fake shops appearing online each day), and it’s not hard to see why spikes in online scams occur around this time of year.
Monthly figures from the BBB often show upticks in the number of reports and amount stolen in the lead up to Christmas and just after (January/February).
As we can see from the above data, the highest amount of $ amount lost in 2021 was reported in February. Cases also started to rise from November 2021 to January 2022 before a huge spike in November and December of 2022.
Online shopping scams are a nationwide problem
As we can see from the below table, no state is immune to online shopping scams.
It’s perhaps no surprise to see California, Texas, and New York taking the top three spots for the overall amounts involved in online scams from 2020 to 2023. These three states have seen losses of $341 million, $206 million, and $194 million respectively.
When it comes to the number of cases, New York is replaced by Florida in the top three. Florida saw 112,175 cases, compared to 99,582 in New York, 115,340 in Texas, and 185,126 in California. Florida did see the fourth-highest losses, too, with $185 million in total.
If we look at the rate of online scams per 100,000 people over the last four years (excluding the rest of this year), things do change somewhat.
With 4,764 cases registered across our reporting period and a population of 689,545, DC records an online shopping scam rate of 690.89 per 100,000 residents. It is closely followed by Delaware with 650.24 (6,437 cases to 989,948 residents).
Nevada (596.43 per 100,000), Colorado (557.15 per 100,000), and New Hampshire (552.37 per 100,000) make up the rest of the top five.
How to avoid online shopping scams
1. Check for a secure connection (HTTPS)
Make sure the online shopping website uses HTTPS and not HTTP. A website is secure if it has a lock symbol next to the web address in your web browser. HTTPS ensures no third parties can snoop on the connection between your browser and the site.
Any website that collects personal information, such as credit card details, addresses, and passwords, should have an HTTPS certificate. That said, even most scams sites now have HTTPS, so only using secured sites is no guarantee consumers will avoid online shopping scams.
2. Check the website’s ownership and registration information
Use a free ICANN lookup tool to check the website’s registration and ownership information. Consumers should try to identify when the website was created, and whether or not any of the owner’s information is publically available. More trustworthy websites will have the owner’s information listed, including contact information. Sites that hide contact or ownership information may not always be untrustworthy but should be dealt with more cautiously.
The age of the site is also a trust factor that you can glean from an ICANN site lookup. Newly-created websites may be legitimate, but most scam websites are created and operated for only a few weeks before getting shut down. You’ll even find some scam sites advertising “store closing” sales with large discount offers (50-70% off), even though the website was registered just a few weeks or a few months prior.
3. Look for trust badges or trust seals
Trust badges or seals are issued to e-commerce websites by various privacy and security organizations, or by payment processors like PayPal. These badges or seals are designed to indicate that the shopping websites you’re visiting offer some form of shopping protection and requisite online security measures. Research indicates trust seals do work to increase sales for websites.
Shopping scam websites rarely carry these seals. However, some may fake these seals and place them on the website to give the appearance of trust. Consumers should make sure to click on the trust seal to verify it’s real and not just a static image. Additionally, trust badges and seals are not entirely difficult for a website to obtain, and some badges or seals don’t require much verification (if any) that the website is legitimate.
4. Check the website’s “About Us” and other pages for errors
Most scam websites are low-effort attempts to trick consumers. In most cases, you’ll find the website’s main pages, including its About Us and Contacts pages, carry grammatical errors or other suspicious content. Consumers should review these pages to look for inaccuracies, errors, or missing contact information.
As well, review the structure of the website. If it’s poorly designed and looks unprofessional, it may be better to avoid shopping through that site.
5. Look up information about the website on forums or the BBB
Consumers may want to cross-check a website against forums where such reports exist or use the BBB’s online resources. A quick web search about the website, such as “is [x] a scam?” may reveal some online chatter. Consumers can also use the BBB’s website to look for a company’s name or web address to see if any other consumers have reported it.
If no information appears in either a web search or through the BBB, the website may be too new to have been reported by anyone.
Trust your instincts to avoid shopping scams
Consumers should ultimately go with their gut. If a website appears dubious, it’s likely better to find your product elsewhere. It’s often hard to pass up what appears to be a great deal, but the old adage usually rings true: “If it seems too good to be true, it probably is.”
Methodology
To get overall figures for all 50 states plus DC and Puerto Rico, we collated data from the BBB, FTC, and IC3. We used figures from 2020 to 2023, where available (noted below).
BBB Data: Data categorized as ‘Online Shopping’ scams. Complaints were investigated by the BBB. Data up to mid-November 2023.
FTC Data: Data categorized as ‘Online Shopping and Negative Reviews’ – when looking at sub-categories, all of the scams recorded were for ‘Online Shopping’ and did not include ‘Negative Reviews.’ Data up to Q3 2023.
While the FTC provides figures by quarter for each state, it does not provide $ amounts for each state. Therefore, we had to use the average based on the overall number of cases and $ amounts involved. For example, in Q1 of 2023, the FTC recorded 92,659 cases of online shopping scams with $100.9 million in losses. This creates an average loss of $2,316.89 per case.
https://public.tableau.com/app/profile/federal.trade.commission/viz/FraudReports/FraudFacts
IC3 Data: Data categorized as ‘Non-payment/Non-delivery’ and ‘Credit Card/Check Fraud’ scams. Reports are reviewed and researched before being passed on to federal, state, local, or international law enforcement or regulatory agencies. Data up to 2022.
https://www.ic3.gov/Media/PDF/AnnualReport/2022_IC3Report.pdf
The figures we have recorded via each of the above channels may be lower than their overall figures for each year. This is due to our report only covering the 50 US states and DC and Puerto Rico.
State populations: https://data.census.gov/cedsci/all?q=Population%20Total&g=0400000US02
So how do we spot a sketchy product on Amazon
I shop IAW the golden rule: “You get what you paid for.”
Price, mostly. The thing with Amazon is that you’re not likely to get conned by the vendors in terms of not receiving products, but the products are very likely to not look like the advertised picture, particularly for clothing.
Here’s an interesting, relevant article to that: https://www.ecomcrew.com/chinese-sellers-manipulating-amazon/