Key Points
- As e-commerce in Australia booms, online shoppers are also increasingly exposed to scams
- Many retailers’ loyalty programs offer discounts to collect customers’ personal data for marketing purposes
- Hackers are interested in this data for their own gain, as it can be sold on the black market for profit
- Cyber criminals also set up fake online shops to steal peoples’ money and identities
Although online shopping has steadily increased in the last decade, it saw an explosion following the COVID-19 pandemic lockdowns.
According to , 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, a researcher and Senior Lecturer in Marketing at the University of Tasmania’s College of Business and Economics, says although some of the big retailers had good online stores before the pandemic, the crisis forced many merchants to 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 adds many retailers enhanced their websites to offer improved customer service and delivery options among other benefits or enticements, to retain their business. But this also came at a price.
Online retail websites often help customers save money by promoting sales or rewarding clients with coupons, money back incentives, and special offers. However, consumers should be aware that these stores offering loyalty programs are also collecting personal data and keeping tabs on their online shopping behaviour in exchange.
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.Dr Louise Grimmer, Researcher and Senior Lecturer in Marketing at the University of Tasmania’s College of Business and Economics
Source: Getty / Getty Images
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.
Fake online shops and identity theft
One of the biggest risks of online shopping is encountering false online shops set up by fraudsters to steal money or personal information.
“What scammers do these days is they set up fake shops, either on the internet and more frequently on social media,” Delia Rickard, the Deputy Chair of the Australian Competition & Consumer Commission explains.
Ms Rickard warns that it is increasingly difficult to identify fraudulent websites. Online scammers regularly impersonate Australian entities to build credibility, by using their logos.
They advertise products often with very low prices or amazing benefits that are too good to be true.
“Often they will pretend to be an Australian company and use an Australian ABN number, which they've stolen,” she adds.
If the site asks for uncommon or unusual payment methods, such as wire transfers, cryptocurrency, or vouchers, it is likely a fraud, Ms Rickard explains.
She recommends contacting your bank immediately if you’re scammed.
The quicker you recognise you have been scammed and let your bank know, the better you can protect yourself.Delia Rickard, ACCC Deputy Chair
She adds that the increase in demand has slowed the delivery of products, making it harder for customers to tell if been scammed of if a legitimate delay.
“It's now getting increasingly difficult to know when you have and haven't been scammed with online sales, because of 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 a problem,” Ms Rickard says.
What to do if you get scammed
Many online scams are designed to extract personal information such as names, ages, and addresses. Other highly coveted information is driver's license and passport numbers.
These scams are commonly used to steal people’s identities.
“If they have your name, address, date of birth and possibly your phone number as well, they can go to your financial institution and pretend to be you,” Shanton Chang, Professor at the School of Computing and Information Systems at the University of Melbourne explains.
“It's the way that all official organisations would identify who you are,” he adds.
Ms Rickard urges anyone who has been tricked into giving away any personal information to contact as quickly as possible to and .
Ms Rickard also advises online shoppers to regularly check the or their to familiarise themselves with common online deceits. This resource is available in 10 different languages.
Another option is contacting , a government funded organisation that helps combat identity theft.
Scam Source: Getty / Getty Images
“On your browser when you're on 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. You can look at things like reviews and ratings.’’
She 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.
