Fake Advertisements on Social Media and Search Engines

Scammers lure shoppers with fake ads offering deep discounts with early access to holiday deals on social media and search engines during the pre-shopping season, aiming to steal their credentials or financial information. 

Let’s review a Facebook ad that promotes the Black Friday sale from The North Face, a popular retailer known for outwear and fitness gear. At first glance, it appears genuine and enticing, offering consumers a steep 80% discount. However, the website “Northfacecoat.shop” is known as a source of malware, presenting serious security threats. 

Exploiting Seasonal Shortage on High-demand Products

Bogus deals on high-demand products are a classic pre-holiday scam tactic. Scammers exploit consumers’ desire to purchase hot toys for their children and attract unsuspecting shoppers with flashy “limited-time” discounts before major holiday sales events. But instead of securing a great deal, consumers may accidently purchase counterfeit goods or share their financial information with scammers.

An example is the Hot Toy Scam, which targets parents searching for hard-to-find gifts like LEGO sets, Furbies, or Mini BarbieLand. As these popular toys sell out quickly in stores, scammers lure desperate parents to fake brand websites that claim to have the items in stock.

Point of Sale (POS) scams

POS scams can take various forms, particularly during consumer traffic and busy shopping periods:  

• Fraudsters use stolen credit or debit cards to make unauthorized purchases at POS terminals.

• Scammers can compromise checkout pages on legitimate e-commerce sites, redirecting customers to phishing checkout pages hosted on malicious fake websites and stealing financial information. According to a FBI Flash report, an incident occurred where an unidentified bad actor extracted credit card data from a U.S. business by injecting malicious code into its online checkout page. The stolen data was then sent to an attacker-controlled server, designed to impersonate a legitimate card processing system.

• Scammers place card skimming devices on POS terminals such as fuel pumps or freestanding ATMs.

Fake Reviews

Scammers use fake reviews to make their fraudulent websites, products, or services appear more credible to consumers. They fabricate positive feedback with overly enthusiastic claims like “10/10” or “Must Buy” with irrelevant or generic details. To increase perceived legitimacy, scammers often use bots or content farms to flood websites and third-party review platforms with numerous fake reviews, creating the illusion of popularity. In some cases, they even infiltrate legitimate review platforms to post fake reviews, further convincing potential customers of the product’s authenticity. According to the Better Business Bureau (BBB), fake reviews have been increasingly used on platforms like Amazon, where scammers post glowing endorsements for counterfeit or non-existent products, deceiving consumers into making purchases that end in financial losses.

Red Flags During the Holiday Shopping Season

As mentioned in Part I, scammers often deploy tactics such as extreme discounts, fake shipping notifications, and suspicious domain names to blur the lines between legitimate holiday campaigns from internal teams and fraudulent ones during the holiday shopping rush.

Return Fraud Schemes

During the holiday season, retailers relax return policies to encourage higher sales volumes, which in turn creates opportunities for fraudulent return schemes. This resulted in a $101 billion loss for retailers in 2023 alone. Return fraud typically falls into two categories: refund fraud and false returns. In refund fraud, scammers exploit lenient policies to obtain cash refunds for items they didn’t legitimately purchase. False returns, meanwhile, involve returning counterfeit or inferior products in place of genuine items, allowing scammers to profit by keeping the original. This tactic is especially effective during busy return periods when retailers face challenges in thoroughly inspecting each item. Retailers with flexible policies, like Amazon, are particularly vulnerable to return fraud, straining relationships with third-party sellers.

Chargeback Abuse

Chargeback abuse, or “friendly fraud,” happens when a scammer makes a legitimate purchase but later disputes the charge, falsely claiming it was unauthorized. Banks often issue refunds, leaving retailers at a loss while the scammer keeps the product.

Fake Deals on Refurbished Goods

After the holidays, scammers lure shoppers seeking deals on refurbished or “open-box” electronics with fake ads and counterfeit websites offering low prices on items like smartphones and laptops. The Better Business Bureau (BBB) reported numerous cases in 2023 where consumers purchased “refurbished” electronics that either never arrived or were non-functional.