How this scam works

While many online sellers are legitimate, unfortunately scammers can use the anonymous nature of the internet to rip off unsuspecting shoppers.

Scammers use the latest technology to set up fake retailer websites that look like genuine online retail stores.

Many of these websites offer luxury items such as popular brands of clothing, jewellery and electronics at very low prices. Sometimes you will receive the item you paid for but they will be fake, other times you will receive nothing at all.

The biggest tip-off that a retail website is a scam is the method of payment. Scammers will often ask you to pay using a money order, pre-loaded money card, or wire transfer, but if you send your money this way, it’s unlikely you will see it again or receive your purchased item.

A newer version of online shopping scams involves the use of social media platforms to set up fake online stores. They open the store for a short time, often selling fake branded clothing or jewellery. After making a number of sales, the stores disappear. They also use social media to advertise their fake website, so do not trust a site just because you have seen it advertised or shared on social media. The best way to detect an fake trader or social media online shopping scam is to search for reviews before purchasing..

Warning signs

• A product is advertised at an unbelievably low price, or advertised to have amazing benefits or features that sound too good to be true.

• The other party insists on immediate payment, or payment by electronic funds transfer or a wire service. They may insist that you pay up-front for vouchers before you can access a cheap deal or a give-away.

• The social media based store is very new and selling products at very low prices. The store may have limited information about delivery and other policies.

Protect yourself

• Check if the website or social media page has a refund or returns policy, and that their policies sound fair. The better online shopping and auction sites have detailed complaint or dispute handling processes in case something goes wrong.

• When using retail websites, find out exactly who you are dealing with. If it is an Australian company, you are in a much better position to sort out the problem if something goes wrong.

• When making online payments, only pay for items using a secure payment service—look for a URL starting with ‘https’ and a closed padlock symbol, or a payment provider such as PayPal. Think twice before using virtual currencies such as bitcoin—they do not have the same protections as other transaction methods so you can’t get your money back once you send it.

• Avoid any arrangement with a stranger that asks for up-front payment via money order, wire transfer, international funds transfer, pre-loaded card or electronic currency, like Bitcoin. It is rare to recover money sent this way. Never send money or give credit card or online account details to anyone you don’t know or trust.