Online Buyer Beware: E-Commerce Fraud Is Getting More Sophisticated

Cyber Monday Crackdown: Feds Bust Counterfeit E-Commerce Sales Sites The term Cyber Monday was coined only about five years ago -- but that day of frenzied online shopping, coming on the heels of the Thanksgiving holiday weekend, is already a major part of U.S. retail sales culture. The National Retail Federation estimates nearly 107 million Americans shopped on Cyber Monday this year -- up about 10% from 2009. And an NRF survey released before Thanksgiving reported more than 88% of retailers were planning special Cyber Monday promotions.

It's probably no coincidence, then, that the feds made a major announcement on Cyber Monday: They had seized 82 domain names of commercial websites they allege were engaged in the illegal sale and distribution of counterfeit goods and pirated copyrighted works.

According to a Department of Justice statement, the operation targeted bogus online retailers dealing in a wide spectrum of counterfeit goods, ranging from clothing and fashion accessories to sporting equipment, DVD sets, music and software. "By seizing these domain names, we have disrupted the sale of thousands of counterfeit items, while also cutting off funds to those willing to exploit the ingenuity of others for their own personal gain," said U.S. Attorney General Eric Holder

According to the Justice Department, a lot of the counterfeit goods were shipped from suppliers in other countries directly into the U.S. via international express mail.

Cyber-Criminals Can Sucker Even Savvy Users

It's not just retailers and intellectual property-holders being hurt by fraudulent online sites. "I would bet 5% of the websites being accessed [by consumers on Cyber Monday] are not legitimate," says Paul Bauer, chair of the Department of Business Information and Analytics at the University of Denver's Daniels College of Business.

Internet criminals have become amazingly sophisticated, he says -- even fooling people who consider themselves web-savvy when it comes to online shopping.

Bauer offers himself as an example. About a year ago, he was making his mortgage payment online. "Within five minutes of paying it," he remembers, " I get back this email saying there was a problem with it; would you please click here. And I did, initially. But then I went, wait a minute -- that didn't come from [my bank]. In fact, I checked the IP address, and it was not from [the bank]. Somebody was monitoring their website close enough -- sitting on a router somewhere on the Internet -- that they were then able to send back that email. I damn-near fell for it."

Online fraudsters also set up up their fraud sites with Web addresses very similar to those of legitimate e-commerce sites, counting on the fact that consumers often mistype URLs. Another scheme is to redirect online shoppers to such bogus sites.

"They can set up the same level of security with certificates, so everything will look legitimate," says Bauer, "but the fact is that you aren't where you thought you were, [and that] exposes you to credit card theft."

The best thing online consumers can do is remain vigilant to potential fraud and watch where they shop. "Buyer beware," says Bauer. "There are bad guys out there, everywhere, trying to take your money. We haven't been able to design [the Internet] to shut that down completely. But this bust, taking away 82 domains, is a step in the right direction."

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i bought a blowup doll from china ..i got ripped of it came from pakistan and it really blew up..thanks..cyber thugs

December 01 2010 at 5:04 PM Report abuse rate up rate down Reply

I have another one for you. I did a huge online Christmas order with JC Penney. Usually it's safe to deal with stores you know. When filling out my order, it said that all of the items I wanted were in stock. After my order and money were taken, guess what? All of the items were on backorder. I waited a week and some of the items are being shipped now. 2 of the items are still on back order and now they are saying they're coming before Dec. 16. This after they've told me they were in stock initially and coming before Dec 1. I did my shopping before Thanksgiving to avoid these kinds of hassles. Now it will be the middle of December before I know if I will have all my items. If not, I will be shopping the week before Christmas, which is exactly what I was trying to avoid.

December 01 2010 at 12:48 PM Report abuse +2 rate up rate down Reply

The comment, "Get off your lazy ass and deal in person," (made below) is insensitive to the older, the ill, the physically disabled who may not be able to deal in person. I am usually very careful when shopping on line, but in the holiday rush I placed an order without taking due diligence. There was a CONTACT US tab at the top of the site page, but if I had taken the time to click it before placing the order I would have seen that contact was by email only, no customer service phone number. There was a TRACK YOUR ORDER tab; if I had clicked that before ordering I would have seen that it began with a big statement advising what to do if you hadn't gotten a tracking # (apparently it happens often) them...again by email. I contacted 3 times before finally getting a response. No indication on the site that the item might be coming from Shanghai...I never would have ordered knowing the length of time that might take. I have contacted my credit card company to dispute the purchase. Make sure you make a hard copy of any order confirmations or other communications with the suspect company (in this case

December 01 2010 at 10:06 AM Report abuse +1 rate up rate down Reply

The scammers initiating contacts as being from Craig's List is astounding. And there is NOTHING being done about it.

December 01 2010 at 9:01 AM Report abuse +3 rate up rate down Reply

Cyber Monday was the day for my online Christmas shopping and all these great deals were flying at me, "free shipping" 20% off etc.... I ordered something for my son and was given "FREE SHIPPING!" great thing, right? When it came to check-out time, I was charged a 13.99 "handling fee"" So where's the deal? This was from, to order car parts. If it wasn't the only thing my son wanted, I would have cancelled the order. Some bargain.

December 01 2010 at 8:28 AM Report abuse +4 rate up rate down Reply

Do not order from on line sellers. Get off your lazy azz and deal in person. My one and only order was on cyber monday. 20% off, free shipping. I got the goods and was charged for the shipping. When I contacted the site I was told I couldn't combine the two offers(free shipping and 20% off). I told them that was not spelled out and the order confirmation reflected both discounts. They said everyone knows you can't combine the two discounts. Now I have a choice, keep the goods and eat the shipping cost(plus handling) or return at my expense and a restocking fee. From now on I will get off my azz and go to a legit store.

December 01 2010 at 7:55 AM Report abuse -2 rate up rate down Reply

I only shop with stores I'm familiar with such as Macys, JC Penney et al. One place stole my motherinlaw's credit number,, until I contacted the bank and FBI. Eharmony did the same, as well as TRUSTEDID. These three places have had an FBI complaint filed against them and will be put out of business.

December 01 2010 at 7:26 AM Report abuse +1 rate up rate down Reply