The internet offers a world of amazing deals, but the promise of a steep discount can sometimes mask a deceptive or illegal scheme. Scammers exploit the excitement of online shopping to lure consumers into fraudulent situations that range from selling counterfeit goods to outright theft. The Federal Trade Commission (FTC) constantly warns shoppers that if a deal looks too good to be true, it probably is. These schemes often leave victims with a lost payment, a compromised identity, or a product that is nothing like what was advertised.
1. The Counterfeit Goods Marketplace
Scammers create sophisticated-looking websites that mimic legitimate retailers, offering luxury goods like designer handbags, expensive sneakers, or high-end electronics at impossibly low prices. Consumers who purchase these “deals” either receive a cheap, illegal knock-off or nothing at all. These operations violate trademark laws and deceive customers, who have little recourse when the fake product arrives or their money simply disappears.
2. Subscription Traps
This scheme advertises a “free trial” or a deeply discounted product, but it hides the true terms in fine print. To claim the deal, you must enter your credit card information. The company then enrolls you in a costly monthly subscription that is notoriously difficult to cancel. The FTC has prosecuted numerous companies for these deceptive practices, where the “deal” is just a bait to lock you into recurring, unauthorized charges.
3. The Non-Delivery Scam
This is one of the most common forms of online fraud. A seller advertises a high-demand product, like a new gaming console or a popular appliance, at a price well below market value. They create a sense of urgency, prompting quick payment through non-reversible methods like wire transfers or cryptocurrency. Once the payment is made, the seller and the “deal” vanish, and the product is never delivered.
4. The Bidding Fee or Penny Auction
Penny auction websites present themselves as a way to win expensive products for just a few dollars. However, the business model is legally questionable. Users must pay a non-refundable fee for every bid they place, whether they win or lose. The price of the item goes up by only one cent per bid, but the auction house collects money from every single bid, often earning far more than the product’s actual value from the losing bidders.
5. Pyramid Schemes Disguised as Sales Programs
Online ads promise a chance to earn huge profits by selling a “miracle” product from home. To get started, you must purchase an expensive starter kit. The real business model, however, relies on recruiting other people to buy starter kits, not on selling the actual product to customers. The FTC classifies these as illegal pyramid schemes, as the vast majority of participants lose money while only those at the top profit from recruitment.
6. Fake Pharmaceutical Deals
Scammers set up fake online pharmacies offering prescription drugs at huge discounts without requiring a valid prescription. These operations are highly illegal and dangerous. The drugs they sell can be counterfeit, contain the wrong dosage, have expired, or be completely fake. The “deal” not only breaks the law but poses a severe risk to a consumer’s health.
A Buyer’s Best Defense
Navigating the world of online shopping requires a healthy dose of skepticism. Scammers are experts at creating a sense of urgency and excitement to bypass a consumer’s better judgment. The best defense is to stick to reputable retailers, use secure payment methods like credit cards that offer fraud protection, and always question a deal that seems too good to be true.
Have you ever been targeted by an online scam that looked like a great deal? What red flags do you look for when shopping online? Share your experiences.
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