Although online shopping offers consumers benefits such as convenience and discounts, it also carries a set of risks.
While many legitimate online retailers collect personal data, scammers are also taking advantage of the surge of online commerce to target vulnerable Australians.
Although online shopping has steadily increased in the last decade, it saw an explosion following the COVID-19 pandemic lockdowns.
According to recently published research, almost one in five Australians buy at least some of their groceries online. Other studies suggest online supermarket shopping alone almost tripled during the pandemic.
Dr Louise Grimmer is a Researcher and Senior Lecturer in Marketing at the University of Tasmania’s College of Business and Economics. She says although some of the big retailers had good online stores before the pandemic, the crisis forced many merchants to either build one, or improve their existing digital platforms and services.
“Before the pandemic, about only 40 per cent of Australian consumers shopped online. Now, as we moved through the pandemic and people had to shop online, that figure has increased markedly and about 50 per cent of consumers now regularly shop online.’’
Dr Grimmer explains that many retailers enhanced their websites to offer improved customer service and delivery options, among other benefits or enticements, to retain their business.
She says although online retail websites often help customers save money, by promoting sales deals, or rewarding clients with coupons, money back incentives and special offers, consumers should be aware that these stores could also be collecting their personal data, and keeping tabs on their online shopping behaviour.
“Most retailers these days, or big retailers but even small retailers too, have some kind of loyalty program where you give over your information, say your email address and you might get something back in return. Sometimes it’s a discount; sometimes it might be a voucher for you to spend at a later date. Now, obviously they are going to be tracking what you do on the website and you obviously have to hand over some of your personal information.’’
Databases containing customer information can be used by businesses for legitimate marketing purposes. They can also be lawfully monetised or on-sold to other third-party businesses, if allowed under the user agreement.
However, this information also attracts cyber criminals and hackers looking to use it for their own gain, as personal information can be sold on the black market for profit.
Another risk of online shopping is encountering false online shops set up by scammers to steal people's money or identities.
The Deputy Chair of the Australian Competition & Consumer Commission, Delia Rickard explains.
“What scammers do these days is they set up fake shops, either on the internet, or more and more frequently on social media. They advertise products often with very low prices or amazing benefits that are too good to be true.’’
Ms Rickard says if the site asks for uncommon or unusual payment methods, such as wire transfers, cryptocurrency, or vouchers, it is likely a fraud.
She warns online scammers regularly impersonate Australian entities to build credibility.
“Often, they will pretend to be an Australian company. Use an Australian ABN number, which they've stolen. It shouldn't give you great confidence.’’
Ms Rickard advises online shoppers to check the Scamwatch website (scamwatch.gov.au) to familiarise themselves with common online scams, report one or get help.
Information is also available online in different languages.
“In addition to the Scamwatch website, we have a product called the little black book of scams which has been translated into 10 community languages.’’
Ms Rickard also recommends contacting your bank immediately if you’re scammed.
She adds that the increase in demand has slowed the delivery of products, making it harder for customers to tell if they've been scammed of if there's a legitimate delay.
“It's getting increasingly difficult to know when you have and haven't been scammed at the moment with online sales because the supply chain issues. This also means that we're all sort of getting used to things, taking longer to get to us than they used to. And that is the problem. Because the quicker you recognise you have been scammed and let your bank know, the better you can protect yourself.’’
However, Ms Rickard adds that many online scams are designed to obtain personal, identifying information, such as people’s names, age and address. Other sought-after information is drivers’ license and passport numbers.
These scams are commonly used to steal people’s identities.
Ms Rickard urges anyone who has been tricked into giving away any personal information to contact Scamwatch as quickly as possible.
You can also get in touch with idcare.org, a government funded organisation that helps combat identity theft.
Dr Grimmer also recommends online shoppers to double-check that the site they are visiting is reputable before handing over payment or personal information.
“So you can see over on your browser, where you've got the URL of the retailer, make sure that there is the little padlock icon, because that means it's a secure site that you're shopping with. You can also do some searching on the web to see that it is a well known store, and that other people have shopped there and had a good experience, and you can look at things like reviews and ratings.’’
Dr Grimmer also suggests that people who are new to online shopping consult with their family or friends, so they can help ensure that the shopping platform they are on is trustworthy.
Though it is not a requirement to contact the police, sometimes doing so could help, especially if the scammer is based in Australia.
