What is the scam on Facebook?

[mavic3usa]

I was being a bit facetious with this response, but that really is pretty much what's going on.

There once was a time when companies had a reputation to uphold, and you could place a certain amount of trust in them because it was important for them to have that credibility and trust. It took a big investment in capital to set up and staff a company, and the owners had a vested interest in making sure that they had a return on that capital - that meant staying in business long enough to earn sufficient revenue to at least cover that setup cost.

The Internet has changed all that. The creation of online marketplaces like Amazon and the web sites for major retailers like Walmart, Home Depot, etc. allow any Tom **** or Harry to set up shop for virtually nothing. They have no investment to pay back, and therefore no motivation to build trust. If their business fails, it hasn't really cost them anything.

Sad to say, but a new business model has emerged where unscrupulous people set up the shell of a company, advertise products, collect from unsuspecting customers, and when the complaints start rolling in they just shut it down and then move on to the next company.

This is why a savvy customer will buy not only a reputable brand, but make sure it's being sold by a reputable retailer. When you're in an online marketplace, double-check to make sure who's actually selling it. Half the stuff sold on the Walmart web site is coming from third parties you've probably never heard of. Same goes for Amazon. I always look for "Sold by Amazon" on listings to try to avoid scams.

Today, more than ever before, it's "caveat emptor".

Pesky capitalism, yeah.

 

[mavic3usa]

The skeptic in me would argue it isn't just the "Tom's" of the world doing this - how many large companies regularly "re-brand" themselves? My opinion on that is that they've so totally messed up their reputation with brand X, they need to re-brand to kind of start over -so they can do it all again (I'm looking at you Comcast as a big example).

But yes, today, more than ever it is caveat emptor - and "if it sounds too good to be true, it almost certainly is".

Re-branding services are a bit different than re-branding products. I don't think Sprint changed to T-Mobile to try to hide anything from the customer. I don't think Twitter changing to X was nefarious. I get it tho about the cable companies, no matter the name...always bad.

 

[EssenYVR]

...major retailers like Walmart, Home Depot, etc. allow any Tom **** or Harry to set up shop for virtually nothing.

Names are censored now....????

How is anyone ever going to find Laura Petrie's husband?

 

[Capt KO]

Got nailed in early days of this scam on a portable compressor, great price but not ridiculous, professional looking page. Got tracking #, says delivered, confirmed by UPS. They say box weighed a fraction of mine and was delivered to our City Police Dept! Police got involved and Visa refunded my payment. Seller disappeared never found. Everyone pays for this fraud, in the billions.
Lesson learned

 

[Melvoid]

Yeah, there's another one out there about some place giving away free Gibson guitars because of a "packaging accident." Yeah, we mis-labeled the boxes on a bunch of $3,000.00 guitars, so here, you can just have 'em. But first, give us your credit card info.

I doubt it.

Something I like to do is read the message carefully. There's usually a spelling or grammatical error that you know wouldn't be there from the real entity.

 

[Kuiper Denizen]

The irony of it all is how stupid the scammers are! If they asked a more realistic price they might fool more people.

If they advertised $550 it’d look more legitimate and they’d only need one tenth the gullible buyers.

Anyone want some wrinkle cream I derived from a cantaloupe? It’s a $250 value I’ll let you have for $60!

 

[mavic3usa]

The irony of it all is how stupid the scammers are! If they asked a more realistic price they might fool more people.

If they advertised $550 it’d look more legitimate and they’d only need one tenth the gullible buyers.

Anyone want some wrinkle cream I derived from a cantaloupe? It’s a $250 value I’ll let you have for $60!

The higher the advertised, the more savvy the buyer. Scammers are looking for the bottom and believe me, the bottom is well stocked. There are millions of people who believe you can get a new $2000 drone for $25. These people are less likely to understand the complicated dispute processes, way less likely to execute protected purchases (they might even send Paypal F&F because they don't understand it), often use Venmo and CashApp, and are way less likely to involve law enforcement. When you engage them in the expected conversation, they are way more gullible because they badly want the product. Some victims might even be willing to let the $25 go in the end because it's not worth it and the scammers are cleaning up, one dollar at a time; there is some real velocity that can build up with those smaller amounts.

 

[EssenYVR]

The irony of it all is how stupid the scammers are! If they asked a more realistic price they might fool more people.

Some victims might even be willing to let the $25 go in the end because it's not worth it and the scammers are cleaning up, one dollar at a time; there is some real velocity that can build up with those smaller amounts.

Exactly. Set the price too high, and people will have a lot more motivation to pursue the scammers. With most purchases being made with a credit card the scammers count on people just abandoning their claim rather than putting a stop payment on the transaction.

 

[msinger]

With most purchases being made with a credit card the scammers count on people just abandoning their claim rather than putting a stop payment on the transaction.

Have you ever reported a fraudulent credit card payment? It's super easy. The high motivation is placed on the business where the purchase was made to prove the purchase was not fraudulent.

Now, this likely isn't the real intention for scammers at all. They already know most of the drone (or whatever is being advertised) purchases are going to be successfully reversed. And they don't care since they had no plans to ship anything to the sellers.

This is where the fun part starts.

While the buyer is waiting for their purchase to be shipped to their door, the scammers take that credit card and purchase a other products that cannot be disputed later. For example, they could go to an Apple vending machine in an airport and buy several high ticket Apple products.

 

[EssenYVR]

While the buyer is waiting for their purchase to be shipped to their door, the scammers take that credit card and purchase a other products that cannot be disputed later.

That can happen if you give your credit card information directly to the scammer. But not if you're using a third-party marketplace like Amazon or Walmart. And it's not quite as easy to use fraudulently obtained credit card info at a physical-presence vendor, because the authentication information (PIN, for example) isn't the same as what you need to give for an online purchase (CVV).

The banks have all too much experience with this stuff and they actively work to make it as hard as possible for scammers, because they're usually on the hook for the missing funds.

None of that is to say that you shouldn't be careful, of course.

 

[msinger]

But not if you're using a third-party marketplace like Amazon or Walmart

Certainly. I don't know that scammers are trying to sell on Amazon and Walmart though.

And it's not quite as easy to use fraudulently obtained credit card info at a physical-presence vendor, because the authentication information (PIN, for example) isn't the same as what you need to give for an online purchase (CVV)

Is that a Canada thing maybe? Here in the US, CVV is required for most online purchases. And credit cards don't have PINs.

 

[EssenYVR]

Is that a Canada thing maybe? Here in the US, CVV is required for most online purchases. And credit cards don't have PINs.

That's what I said, you need CVV for online purchases.

The US seems to be slow to adopt the latest credit card technology. I'm always surprised when I visit the US and have to actually sign for a credit card purchase. But contactless payment (also known as "tap") is what everyone up here in Canada uses, and you need to enter a PIN for payments above a certain value.

The US is getting there, more and more merchants have contactless point of sale equipment, and signatures only seem to be needed in some restaurants where you tip.

 

[msinger]

The US seems to be slow to adopt the latest credit card technology

I'm not sure it's a country problem.

As you noted, different merchants have different requirements. For example, some might require a signature as proof for battling chargebacks.

90% (maybe more) of the places I shop do not require signatures and most offer contactless payments. Contactless is of course optional and I'm sure the adoption of it also depends on the age (which normally correlates to tech savviness) of the credit card holder.

 

[EssenYVR]

That's what I said, you need CVV for online purchases.

The US seems to be slow to adopt the latest credit card technology. I'm always surprised when I visit the US and have to actually sign for a credit card purchase.

I'm not sure it's a country problem.

As you noted, different merchants have different requirements. For example, some might require a signature as proof for battling chargebacks.

90% (maybe more) of the places I shop do not require signatures and most offer contactless payments. Contactless is of course optional and I'm sure the adoption of it also depends on the age (which normally correlates to tech savviness) of the credit card holder.

All I can tell you is that it's been probably a decade since the last time I had to sign for a credit card transaction in Canada, and all merchants here have contactless point of sale terminals. When transactions exceed a given limit (formerly $100 but raised to $250 during COVID to reduce the need to physically touch the card readers) you use a PIN to verify your identity rather than a signature.

The only exceptions to contactless payments are self-service machines such as parking meters and gas pumps - those are still maybe around 50% "insert the card in the slot and enter your PIN" because it's a lot more expensive to replace them than point-of-sale terminals.

(Side note: US gas pumps often require entry of your postal code. We Canadians have to enter the three numeric digits in our alphanumeric postal code followed by "00". For example, "V1C 2R5" is entered as "12500").

There may be some legal precedent or case law that is creating an impediment for the US to move away from the use of signatures rather than PINs to verify cardholder identity. Or it may be that Americans are just generally more resistant to these kinds of changes (metric system, refusal to give up $1 bills or move to polymer bills with better counterfeit protection, etc).

 

[msinger]

@EssenYVR all interesting information, but I'm not sure any of it makes Canadians less susceptible to fraudulent purchases.

When using your CVV/CVC/CSC online, it can still be stolen. The fact that it's not printed on the card offers you no extra protection.

If scammers are accepting your actual credit card information, they likely plan to use it elsewhere before you realize your credit card information has been compromised.

And many scammers today require payment with store gift cards, Visa gift cards, and other payment types where the payments cannot be reversed. Forward-thinking Canadians will have no protection against this type of attack.

 

[EssenYVR]

@EssenYVR all interesting information, but I'm not sure any of it makes Canadians less susceptible to fraudulent purchases.

When using your CVV/CVC/CSC online, it can still be stolen. The fact that it's not printed on the card offers you no extra protection.

If scammers are accepting your actual credit card information, they likely plan to use it elsewhere before you realize your credit card information has been compromised.

My original point was that it's harder to use credit card information stolen from online transactions to make in-person purchases (such your Apple vending machine example) because the cardholder identifying information is different. You don't give your PIN for online purchases, and chip cards with one-time encrypted keys are way harder to forge. That's one of the reasons why most other countries have moved away from signature-verified transactions.

And many scammers today require payment with store gift cards, Visa gift cards, and other payment types where the payments cannot be reversed. Forward-thinking Canadians will have no protection against this type of attack.

I haven't heard that one yet in relation to an online purchase, only for scams like "grandma, I'm in jail please send bail money". It's hard for me to imagine how someone could argue that this kind of payment would be necessary for an online transaction without it raising huge red flags.

 

[msinger]

My original point was that it's harder to use credit card information stolen from online transactions to make in-person purchases (such your Apple vending machine example) because the cardholder identifying information is different. You don't give your PIN for online purchases, and chip cards with one-time encrypted keys are way harder to forge. That's one of the reasons why most other countries have moved away from signature-verified transactions.

Right, but, that was just an example that doesn't necessarily have to apply to all countries and/or situations. Scammers have lots of tricks up their sleeves and will deploy those that best fit the current scenario.

It's hard for me to imagine how someone could argue that this kind of payment would be necessary for an online transaction without it raising huge red flags

While it's hard for you to imagine, it happens many times every day in the US and other countries that accept these types of payments.

 

[EssenYVR]

It's hard for me to imagine how someone could argue that this kind of payment [only accepting gift cards] would be necessary for an online transaction without it raising huge red flags.

While it's hard for you to imagine, it happens many times every day in the US and other countries that accept these types of payments.

Well, sure, but the fact that lots of people do dumb things doesn't mean we're all consigned to dumbness. For the OP and other people reading this thread who have an interest in securing their finances, it's not that hard a thing to avoid with just a little common sense. And that's really the gist of it - don't let your greed for a deal that's "too good to be true" to override your common sense.

 

[msinger]

Well, sure, but the fact that lots of people do dumb things doesn't mean we're all consigned to dumbness.

Indeed. That's why I mentioned any scam is a game of numbers. Ask enough people to buy and some eventually will.

For the OP and other people reading this thread who have an interest in securing their finances, it's not that hard a thing to avoid with just a little common sense

I'm fairly certain everyone is interested in securing their finances. The problem is that everyone doesn't know how to do that. What seems like common sense to you is not necessarily common sense to everyone else.

And that is why scams like this will continue on for the foreseeable future.

 

[EssenYVR]

I'm fairly certain everyone is interested in securing their finances. The problem is that everyone doesn't know how to do that. What seems like common sense to you is not necessarily common sense to everyone else.

If you ask people, they'll say "sure, I want to secure my finances". But the ones that get scammed are the ones who haven't taken the basic step of educating themselves on how to do that. They end up learning the hard way.

Common sense says that if you really want to secure your finances you need to get off your butt and actually do something about it. If it's really something you want but are too lazy to do, then IMHO you're not exercising common sense. Or at the very least you aren't putting your money where your mouth is.

It's not really all that hard to protect yourself, you don't need a degree in cyber security. Just following some pretty basic rules will protect you from probably 90% of the scams out there.

There was a time when people could plead ignorance of the risk. But we've had a couple of decades now where stories about scams have been regularly appearing in every conceivable kind of media, so IMHO it's a new normal that everyone should have at least a basic awareness of.