EBAY eBay Inc

Craigslist and eBay are among the most profitable venues for swindlers, study finds

By Yuka Hayashi 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (September 30, 2019).

WASHINGTON -- The online ads that you willingly click on are more likely to make you a scam victim than the robocalls flooding your phone with urgent messages.

A new study of consumer behavior toward fraudulent schemes found that scammers are far more likely to succeed in engaging and stealing money from potential targets by using websites and social media than through the phone calls and emails they have long used.

That tendency has made online marketplaces like Craigslist and eBay among the most lucrative venues for scammers to hunt for targets, along with social-media platforms, the study found. Such scammers often run official-looking websites with fake consumer reviews, and try to lure targets with items including used cars, vacation rentals and tickets to popular concerts and sporting events.

The study, conducted jointly by the consumer-education arms of Better Business Bureau and the Financial Industry Regulatory Authority along with the Stanford Center on Longevity, was based on interviews of 1,408 consumers in 2018 who filed a fraud tip or report to the BBB between 2015 and 2018.

On social media, 91% of the respondents said they initially failed to recognize fraudulent advertisements as scams and proceeded to engage, and 53% eventually lost money. On websites, 81% of respondents engaged and 50% lost money.

Those represent far higher success rates for scammers than they experience through phone calls and voicemail, where only 39% of respondents engaged and 11% lost money. Some 42% of scam emails drew engagement and 13% led to monetary losses. The median losses among those who participated in the study were around $600.

The findings surprised the study's authors. "It could be that our defense may be down or lowered when we are on a site that we choose to visit," said Gary Mottola, research director for Finra Investor Education Foundation. "It is easier to identify fraudulent activity when it comes through active channels like phone calls where we expect it to come through."

The study found people most easily fall victim to what the BBB categorizes as "online purchase" scams, which involve purchases and sales on direct seller-to-buyer sites like Craigslist and eBay. Scammers may pretend to purchase an item and then send the seller a bogus check and ask for a refund of the "accidental" overpayment. In other cases, the scammer, when posing as a seller, will simply never deliver the goods, or send fake or inferior items.

Nearly half, or 47%, of the people who reported encountering online purchase scams lost money, compared with other prevalent types of schemes like "tech support" scams, where 32% reported losing money, and sweepstakes/lottery scams, where 15% became victims.

Lisa Bryant considers herself a well-educated consumer who does her homework before making purchases. When the 49-year-old program manager for an aerospace company spotted a Tahoe deck boat that she and her husband had been looking for on Craigslist last month, she carefully studied the website of a consignment warehouse that was handling the transaction and claimed to be located not far from her home in Tacoma, Wash.

"It's a great website. It's very sophisticated, " she said. "It makes it look like they have been in business forever. It had references. It had reviews and listed all the locations."

That, she said, made her ignore some warning signs, including a wire transfer that initially failed to go through and the lack of listing on Yelp.

Soon after Ms. Bryant sent an agreed-upon purchase amount of $16,400 to the seller's bank account, she said, the company went silent. The boat was never delivered, she said, and the seller's website is now defunct. She said she asked her bank to reverse the payment but hasn't heard back.

Other victims who alerted BBB in recent months include a California consumer who reported losing $300 on concert tickets offered on Craigslist. A Maryland victim reported having lost $203 for DJ equipment he agreed to buy on Craigslist and paid for via PayPal. These reports weren't verified by BBB.

Representatives for Craigslist couldn't be reached for comment. An eBay spokesman said the company's technology, combined with its partnerships with rights owners, law enforcement and government officials, "ensure a safe shopping experience" for its customers.

The new study comes as scammers appear to be expanding their activities, helped in part by social media and online transactions. Consumers filed 372,000 fraud complaints to the Federal Trade Commission reporting a total loss of $1.5 billion in 2018, with the number of complaints up 34% from 2017, according to tallies by the report's authors.

Characteristics often found among scam victims included feelings of loneliness and being isolated from others, the study found. People from lower-income households, defined as those earning $50,000 or below annually, also engaged and lost money at significantly higher rates than others.

The respondents to the study -- among the over 90,000 consumers who submitted scam reports to BBB -- included both victims and those who escaped the harm of scam attempts. Of all those who participated in the survey, reporting scams from any of the sources studied, 47% said they didn't engage with the scammers. Among the others, 30% engaged but weren't victimized while 23% engaged and lost money.

The study's findings underscored the effectiveness of intervention by companies or agencies involved in transactions, such as bank tellers and employees of wire-transfer services, the authors said. Among the respondents who engaged with scammers, 20% reported that such organizations intervened or tried to intervene to stop the scams and successfully prevented monetary losses in more than half of those cases.

Banks and investment firms have in recent years been stepping up efforts to train employees to detect unusual transaction activities to help reduce financial exploitation targeting seniors.

Write to Yuka Hayashi at yuka.hayashi@wsj.com

(END) Dow Jones Newswires

September 30, 2019 02:47 ET (06:47 GMT)

eBay (NASDAQ:EBAY)
Gráfica de Acción Histórica
De Mar 2024 a Abr 2024

eBay (NASDAQ:EBAY)
Gráfica de Acción Histórica
De Abr 2023 a Abr 2024