Don’t Throw Your Money Away: Recognizing an Online Scam

© Stephan Röhl / Wikimedia Commons / BY-SA 3.0

First guesses are usually right—just ask any student who has ever taken a multiple choice test and changed an answer halfway through. Not surprisingly, this logic also applies when making purchases, and Better Business Bureau can help determine if gut feelings are accurate.

When consumers check with BBB to research a company, sometimes there is no report. Most of the time this simply means BBB hasn’t had a reason to interact with the business, but occasionally, it means that it is not legitimate.

For example, I recently spoke with a consumer who called BBB to verify a company’s legitimacy before making a purchase. After I was unable to locate a BBB Business Review I analyzed the business’s website. Upon inspection I noticed several red flags that made me wary of the company’s intentions:

  1. There was no contact information available.
    There are no requirements for businesses to display their contact information on websites; however, honest and transparent businesses understand that the more contact information they provide the more at ease their customers, and potential customers, will be.
  2. Everything was marked at more than 50 percent off.
    Businesses have the authority to set their own prices as long as they stay within the limitations of the law; however, legitimate businesses will be unable to stay afloat while continually selling items at a loss. This particular store sold overstock at unrealistic discounts: $2,000 items were priced around $750.
  3. BBB Accreditation couldn’t be verified.
    Eligible BBB Accredited Businesses may display their accreditation online if certain criteria are met—like displaying the correct seal and having it link directly to the appropriate BBB Business Review. While reviewing the website in question, I noticed that every page advertised BBB Accreditation, but the seal was outdated, did not link to a review and could not be verified through the BBB national database.
  4. The only accepted payment method was prepaid debit or money cards.
    Businesses have the ability to decide how they want their customers to pay for merchandise, and may refuse certain types of payment. In this case, the website only accepted Green Dot cards. Prepaid debit cards are easy money for scammers and should only be used when handling personal funds.

Any one of these red flags alone wouldn’t necessarily mean that a company is trying to scam people, but all the factors together bring suspicion. Remember, never ignore your gut and report anything that gives you hesitation.

After seeing all of the red flags on one website I strongly advised the consumer to be cautious about doing business with the company. He was inclined to agree.

It’s satisfying to know that I was right. I checked the website a few weeks later and it had already been taken down. It’s likely that the “company” collected some money from unsuspecting shoppers, left them high-and-dry and then set up a new site somewhere else.

Full Disclosure: Green Dot Corporation is a BBB Accredited Business headquartered in Pasadena, California.