Online Purchase Scams are the Riskiest Type of Fraud, According to 2017 Data from BBB Scam Tracker


Staff Reports



Columbus (April 3, 2018) – Online purchase scams are now the riskiest form of consumer fraud, according to a new report from Better Business Bureau. In 2017, consumers reported more than 47,000 scams to BBB Scam Tracker (BBB.org/ScamTracker). BBB analyzed this information using its unique BBB Scam Risk Index to determine the riskiest scams based on exposure, susceptibility, and monetary loss. The findings, released for National Consumer Protection Week (U.S.) and Fraud Prevention Month (Canada), show some significant changes from 2016:

– Tax collection scams decreased 60% in volume of reports, likely due to the 2016 arrest in India of the ringleader of a network of call centers primarily responsible for the IRS scam

– Online purchase scams jumped from the 4th riskiest scam to the top spot, likely due to an increase in exposure

– Home improvement scams dropped from 1st to 6th riskiest, despite a number of natural disasters that traditionally bring out “storm chasers”

Young people continue to be at higher risk for scams, and susceptibility decreases with age, although dollars lost increases when victims are older.

There was good news in the 2017 BBB Scam Tracker Annual Risk Report: New Trends in Scam Risk from the BBB Institute for Marketplace Trust (BBB Institute).

“Although we saw an increase in total scam reports, the good news is that susceptibility was down,” said Melissa Trumpower, director of programs and operations with the BBB Institute and co-author of 2017 BBB Scam Tracker Annual Risk Report: New Trends in Scam Risk. “The percentage of those reporting who actually lost money to a scam fell from 18.8 percent in 2016 to 15.8 percent in 2017. We also saw a 17% decrease in the median monetary loss, down to $228.”

One interesting phenomenon from 2017 was the prevalence of a new scam, dubbed “Can you hear me?”, named for the opening line of the scam that was extremely common early in the year. “BBB Scam Tracker received more than 10,000 reports on the ‘Can you hear me?’ scam, but virtually none of those reporting could point to an actual monetary loss due to the calls,” notes co-author Dr. Rubens Pessanha, senior director of market research, insights, and strategy with the Council of Better Business Bureaus. “We concluded there was no credible evidence to categorize the calls as scams, and controlled for them in the data analysis to determine the riskiest scams of 2017.”

The most common online purchase scams in 2017 were related to pets, clothing, cosmetics, electronics, and automobiles. The offer of free trials was a common tactic for these online purchases: 67% of scams involving cosmetics and 60% involving nutrition products mentioned a free trial opportunity.

Another significant increase was in the category of investment scams, which tend to target older age groups and come with a higher average monetary loss. This scam type jumped from the 6th riskiest in 2016 to the 2nd riskiest in 2017.

Home improvement scams dropped from the riskiest scam in 2016 to 6th riskiest in 2017. Surprisingly, the drop occurred in a year marked by several weather-related disasters, including hurricanes Irma and Harvey. BBB believes this may have been due to a significant increase in information from the media and consumer protection groups around home improvement scams following disasters.

The top ten riskiest scams in 2017 were:

1. Online purchase scam (up from #4 in 2016)

2. Investment scam (up from #6 in 2016)

3. Employment scam (no change)

4. Advance fee loan scam (up from #5 in 2016)

5. Fake check scam (down from #2 in 2016)

6. Home improvement scam (down from #1 in 2016)

7. Tech support scam (up from #8 in 2016)

8. Travel/vacation scam (new to top 10, #12 in 2016)

9. Family/friend emergency scam (no change)

10. Government grant scam (new to top 10, #11 in 2016)

Travel and vacation scams joined the list, with top destinations of Orlando/Florida, Disney, Mexico/Cancun, and the Bahamas mentioned in the scams.. Also new to the top ten is the government grant scam. Two scams left the top ten list: romance scams and sweepstakes/lottery/prize scams.

One of the most common tactics of scammers is impersonation, where the scammer pretends to be a legitimate business that is well known and trusted by the consumer. The top legitimate organizations that were used by scammers in 2017 were: U.S. Internal Revenue Service; U.S. Government (Grant/Treasury/Reserve/Medicare); Better Business Bureau; Publishers Clearing House; and Microsoft.

Even though a phone call is the primary means of contact for all the reports, in the last year, websites took over as the top mean of contact for scams with monetary loss, which means that the susceptibility on the web is higher than phone calls overall.

Regardless of the scam, scammers often rely on the following tactics:

– The promise of getting a “great deal” (which is often too good to be true);

– Pressure to respond immediately with offers that are time sensitive and prices that “can’t be guaranteed;”

– Intimidation (for example, “You are under federal investigation”; “You will be arrested within one hour unless you call this number”); and

– Isolation, which aims to force a decision without others’ opinions.

Scammers can also be very nice and personable, which can defy “bad guy” stereotypes and make targets more at risk.

Scammers are clever and are always adjusting their tactics, so everyone is vulnerable. BBB Scam Tracker is helping identify higher risks and debunk long-standing myths, but no one should let down their guard. For more information on specific scams and tips on how to avoid them, go to BBB.org/ScamTips. To report a scam, go to BBB.org/ScamTracker.

Two Years After BBB’s Initial Investigation, Central Ohio Company Still Fails to Deliver

Columbus, OH (March 28, 2018) – Since their release ten years ago, Beats by Dre headphones continue to be a popular gift. Purchased by both celebrities and casual music fans alike, untrustworthy retailers selling fake Beats to cash in on the sought-after product was inevitable.

In 2016, BBB Serving Central Ohio investigated a company believed to be selling counterfeit Beats headphones and using a fake address in Marion, Ohio. In the past year, BBB has received eight more complaints and six customer reviews alleging broken headphones upon delivery, or never receiving a product at all. Consumers have lost an upward of $2300 total since the beginning of 2017, not including any dollar loss from years prior.

Bullet-Tech, a company selling electronics nationwide, has an F rating with BBB. BBB wrote to the business on three different occasions concerning their claim to be an “Authorized Dr. Dre Beats Headphone Retailer” located in Marion, Ohio. BBB has also reached out to the business in regards to their pattern of complaints. The business has yet to respond to any communications.

Because Beats headphones are so specialized, retailers have to be authorized to sell them. Check out these signs to see if your Beats are the real deal:

Real Beats by Dr. Dre will have the word “wireless” on the silver part of the outer headphone frame. Fake Beats will have different words, like “studio wireless”, written instead.

Real Beats will have a well crafted headphones case with no cracks. Fake Beats may have a case with an outer black clip, and crooked stitching on the inside.

Real Beats will not show any flashing lights or LED lighting when they are turned on because the plastic is thicker and of

better quality. Fake Beats will show the LED lights shining through on both sides of the ear pieces as a result of thinner, cheaper plastic.

Real Beats will have a clear trademark symbol and description on the inside of the headphone frame that is easy to read. Fake Beats will have a blurry, faded trademark that is difficult to see clearly.

Real beats will have thick foam covering the speakers. Fake Beats will have thin, transparent foam that allows you to see the speakers through the material.

Interested consumers can find more information on buying Beats by visiting their website.

BBB also wants consumers to be aware that Apple, Inc. acquired Beats by Dre in August 2014. Therefore, any complaints filed after that date are handled by Apple, Inc. directly. Beats Music Support can be contacted at: https://www.beatsbydre.com/support.

For more information, follow your BBB on Facebook, Twitter, and at bbb.org.

About BBB

For more than 100 years, Better Business Bureau has been helping people find businesses, brands and charities they can trust. In 2017, people turned to BBB more than 160 million times for BBB Business Profiles on more than 5.2 million businesses and Charity Reports on 11,000 charities, all available for free at bbb.org. There are local, independent BBBs across the United States, Canada and Mexico, including BBB Serving Central Ohio, which was founded in 1921 and serves 21 counties in Central Ohio.

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Staff Reports