21 Dec 2017

Shoppers warned over 'too good to be true' online stores

11:46 am on 21 December 2017

Christmas shoppers are increasingly avoiding the last-minute dash to the store by going online.

However, consumer advocates are warning people against traders touting deals that are too good to be true.

Christmas shoppers are increasingly avoiding the last-minute dash to the store by going online.

Christmas shoppers are increasingly avoiding the last-minute dash to the store by going online. Photo: chesterf/123RF

Nell - who did not want her full name used - thought she had found the perfect place to shop for her nephews at mybabystore.co.nz, which was the first result to pop up in a Google search for personalised baby gifts.

"They had something on the website that looked like exactly what I wanted, they could do it and they were really forward with their emails straight away until they gave me their bank account details and I said, 'Yep, I'll get that in as long as I can get it by next Wednesday'."

She transferred the money. "And then all communication stopped."

The goods did not arrive and there was no reply to Nell's increasingly angry emails.

On a friend's advice, she copied a chunk of text from the website and pasted it into Google, which led to a website with a different name but a very similar design.

She did the same with the web company that designed the site, and found identical websites registered all over the world.

A Google search reveals mybabystore in Australia has received numerous negative reviews from people saying they hadn't received any goods. The site is no longer operational.

Nell's brother works for her bank and he spoke with the fraud team, which contacted the bank that holds the account into which Nell deposited her money.

"Funnily enough, I got an email pretty much within half an hour of that happening, saying they've been trying to contact me and they want to refund me now.

"My brother thinks this is them just trying to quiet me, they might actually refund me to try to stop me talking to anyone else so they can just keep doing what they're doing."

That was on 13 December and a week later Nell was still waiting for her money or any further response to her emails.

"I honestly had no idea this was even a thing. To be the first result on Google for 'personalised baby gifts', I would have thought would be a pretty difficult thing to do. "People have to work pretty hard to get those results."

RNZ has attempted to contact the company via emails and phone numbers listed with the Domain Name Commission but has not yet received a response.

The New Zealand cellphone listed on the commission's website for mybabystore went straight to answerphone. The website is now running a banner message saying it is closed between 14 December and 7 January, while the almost identical website has a banner saying it is closed between 18 December and 8 January.

Internet watchdog Netsafe last year received more than 7000 reports of online scams - including fake traders - which cost New Zealanders more than $11.7 million.

Netsafe director Martin Cocker said fake traders usually stayed beneath the radar of international law enforcement agencies by taking only small amounts of money from individuals - thousands of them - who did not bother reporting it.

"So it's quite a good model of cyber-crime. But of course if that was a gift you were waiting for at Christmas and it doesn't arrive, or you don't get quite what you wanted, it can cause quite a lot of stress and disappointment."

"The fact a website ended in .nz did not mean it was a local business," he said.

Anyone from anywhere in the world can register a New Zealand domain name, and at last count there were 703,259 websites ending in .nz.

"If you're not sure, stick with the big brands, do some research online. And just be really cautious. Try to use payment methods that give you the best chance to reverse the payment later on."

The Ministry of Business Innovation and Employment runs the Scamwatch website and Facebook page, which has alerts and tips on how to spot a scam.

The ministry's head of consumer protection, Mark Hollingsworth, said the key to avoid being scammed was to know who you were doing business with: do they have legitimate contact details? Does the company get good reviews?

"Unlike a registered trader in New Zealand, it's very difficult to get your money back... If an offer seems too good to be true, it probably is."

If you have been scammed, report it to your bank, which may be able to get some of your money back or at least stop scammers taking more, he said.

"And also tell the police and Netsafe, so they can alert others."

How to avoid being scammed:

  • Do your homework: Does the business have genuine contact details? Is there a phone number and address?
  • Do some online research: Check the name on a watchdog service such as scamadviser.com or Google reviews of the company. Copy and paste chunks of text from the website to see if it's been copied from other sites.
  • Check on the Domain Name Commission's "whois" database to see who has registered the site, where it is based and when it was first registered.
  • Before entering your credit card details, check the payment page is encrypted. The site address prefix should be displayed as "https" rather than "http". A padlock or key symbol in the address bar or in the browser window will indicate the webpage is secure.
  • A website ending in ".nz" is no guarantee that the people behind it have any connection to New Zealand.

If you think you've been scammed:

  • Contact your bank or service you sent money through to see if the payment can be stopped or reversed, or whether you need to cancel your card.
  • Report the scam to Netsafe on 0508 NETSAFE (638723) or use this reporting form: https://www.netsafe.org.nz/report/
  • If your personal or financial information has been given out or stolen in a scam, change all of your online passwords on a device not linked to the scam. Use a different password for each account. If your computer or phone has been hacked in a scam, take it to an authorised technician to be cleaned.
  • Tell friends and family. Scammers rely on people being embarrassed. Every person you talk to will be better prepared to avoid scams in the future.