EVEN before the Black Friday sales began last Friday, several organisations had issued warnings reminding shoppers not to fall prey to shopping scams.
On a regular basis, we are also being bombarded by notices reminding us to be wary of frauds, phishing and to change passwords regularly.
This is because scammers are always improving their methods to make them look more legitimate so that unsuspecting people will give away their personal or credit card details, thereby losing money on bogus purchases.
There are many scams making their rounds in the form of a phone call, email, or SMS from business establishments like banks or e-commerce platforms.
They will often cite a security problem with a bank account, for instance, and ask the victim to perform some steps for remediation or to call a telephone number.
FICO senior director of fraud and security line of business Subashish Bose says opportunists are also taking advantage of pandemic messages from governments, in particular the health or tax department to steal personal information.
The Ombudsman for Financial Services attributed an uptick in scams to the public using digital platforms.
Its data revealed that early last year there were losses totalling RM17mil over a period of five months as a result of e-commerce scams alone.
With events like Black Friday and the upcoming Cyber Monday sales, it is best to be vigilant when looking for bargains.
Bose says when paying for holiday purchases, consumers are likely to be overwhelmed with the number of payment mechanisms and the Buy Now Pay Later (BNPL) schemes offered.
He says not all mechanisms are secure, with some posing a higher level of fraud risk than others.
However, for the more traditional payment methods such as using a credit card, the control framework is generally more robust. But there is a high volume of plastic fraud using compromised card details and automated attacks.
For new payment schemes like BNPLs, its blended nature of being both a transaction and a loan can result in new types of threats, he says.
“As the first transaction is often linked to the opening of an account, originations fraud may arise and is often difficult to identify and prevent.
“The full transaction amount may also not be fully protected since installment-based repayments may result in smaller deductions or card charges that go undetected,’’ Bose says.
He adds that it will take a long time for the victims to eventually find out and take action to stop the fraudulent transactions.
To avoid falling prey to holiday shopping fraud, consumers should take preventive steps to protect themselves by making passwords long, complex and unique across various accounts – bank, email, shopping sites –and track it using a password manager.
Check websites to ensure they are genuine before making purchases, he advises.
In particular, consumers should pay attention to misspelled URLs or any changes in the way they log in to the site.
“Consumers should also only store payment card information on trusted, secure e-commerce sites starting with https://. If the e-commerce provider is compromised, there is a high chance that the card will be used fraudulently,’’ he adds.
Scammers will often coerce customers to make payments immediately.
“When faced with pressure to seal the deal – especially when payment has to be transferred directly from the customer’s bank account – it might very likely be a scam,’’ he adds.
If the price seems too good to be true, it probably is.
In fact, research indicates that pricing factor is the key reason behind scam purchases, he says.
Be careful if you receive any unusual messages from friends, contacts, social media connections or business and government establishments.
The identity of the person may have been compromised or it could be a scam disguised as an official message.
Even with seemingly “legitimate” alerts or links sent via emails or text messages from establishments, consumers should not assume that it is genuine.
When in doubt, always contact the institution directly, he adds.
New types of scams have emerged this year and they included postal and shipping scams.
Fake delivery scams have soared during the pandemic.
Fake listings of goods on e-commerce sites are also popular in the region.
Bose says another popular tactic among scammers is to pose as puppy breeders to swindle funds from eager holiday gifters looking to purchase pets for their loved ones.
Outside of e-commerce, remittance fraud is also common, according to Bose.
Victims will typically receive legitimate-looking messages from a long lost schoolmate or someone in their social circles on messaging apps like Facebook or WhatsApp.
Bank customers should be extra careful when conducting higher-risk transactions.
With the sheer number and variety of scam types, financial crime technology needs to adjust quickly to detect the illegal activity.
The onus is on the buyers, sellers and the financial institutions to be vigilant at all times.