Thousands of Australians are falling victim to online shopping scams every year. In June 2023 alone, over two thousand scam incidents were reported with a total combined loss of AU$1,115,264 according to the Australian Competition and Consumer Commission.1
Our Australian IP team is actively advising clients on this issue and below we share tips on how to avoid falling prey to scammers, as well as how to effectively battle against fraudulent scam sites when they arise.2
Why are they dangerous?
Operators of online shopping scam websites are increasingly registering domain names which incorporate well-known brands. In serious cases, operators of such scam websites 'clone' a brand's official website, appropriate a brand owners' promotional photographs and purport to sell legitimate products at heavily discounted prices when no such products exist. Consumers and businesses must be more cautious of such increasingly sophisticated scam sites because the latest Targeting Scams report revealed Australians lost a record AU$3.1 billion to scams in 2022 – an 80 per cent increase on total losses recorded in 2021.
How and when do scam websites strike?
Scam websites are typically marketed on social media platforms including Facebook and Instagram employing sponsored adverts as a tactic to make their sites appear legitimate. Scam websites tend to become more prevalent during popular retail sales periods such as Black Friday, Christmas, Boxing Day and at the end of the financial year when consumers are more likely to spend online.
How can a business mitigate risk?
We recommend that every business ensures that it registers trade marks for its brands. It is also important for businesses to register their trade marks with the Trade Mark Clearing House so they are notified of top level domain names that are registered, which incorporate their trade marks.
Other recommendations for businesses that operate online include:
- Engage lawyers to set up a domain name watch service and to take action to shut down websites at these domains as soon as possible. This can assist with promptly identifying infringing domains so that action can be taken before large numbers of consumers fall victim to a scam website hosted from the domain.
- Monitor your business' online presence including on social media.
- Conduct Google Image searches to identify websites that may be using your images without permission.
- Seek legal advice. The best course of action to take will depend on the circumstances.
- Communicate with customers. Notifying your customers of the existence of a scam website can neutralise the risk posed by the scam website as customers will then know to be wary.
Footnotes
1. https://www.scamwatch.gov.au/research-and-resources/scam-statistics?scamid=21&date=2023-06
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
