Avoid Online Marketplace Scams

Online marketplaces are great platforms for buying and selling local products. Marketplaces such as Facebook Marketplace, Nextdoor and Poshmark make it easy for locals to sell products to other locals. With the rise of online marketplace scams, it’s important to be cautious when using these platforms.

Scams can happen to both buyers and sellers, and they can come in different forms. Here are six types of scams to recognize and how to stop them before they start.

Common Online Marketplace Scams

Verification Code Scams

Verification code scams begin with a fraudster asking for your phone number so you can take communication offline. The fraudster will then send a code to your phone and say they need it to verify your identity before they buy or sell an item.

If you share the code, they can use it to access your online account or create a fake online account in your name with the purpose of spamming your contacts or stealing your identity. There is no reason to give your phone number to a buyer or seller – always communicate through the online marketplace app.

Overpayment Scams

In an overpayment scam, a fraudster will overpay you for your item and then request that you send the difference back to them. While it seems innocent enough, the fraudster will file a chargeback, so they get the full purchase price back, plus the extra money you sent to correct the overage.

Another version of this scam is when the fraudster sends you a screenshot confirming a transfer was successful, but they sent too much. Always look at your account and be wary of buyers offering to overpay – it’s mostly likely a scam.

Fake Payments from Online Apps

A common payment app scam is sending fake payments to a seller. As the buyer, a fraudster will claim they paid you through a payment app like Venmo when they haven’t. The fraudster will send a fake screenshot that looks like payment was sent from a payment app. Always check your account to see if payment has been received and don’t rely on screenshots of payment apps.

Shipping Scams

It’s easy for fraudsters to take advantage of shipping options. For this reason, it’s a better idea to meet someone in person in a public place such as a police station or only ship to a buyer with high review ratings. Popular shipping scams include:

• A seller claiming they shipped the item to you when they didn’t. When you investigate further, you’ll find yourself blocked from the seller
• A buyer sending you a prepaid shipping label, preventing you from tracking or verifying your item arrived
• A buyer sending fake payment confirmation and asking for expedited shipping

Fake or Stolen Item Scams

While there isn’t a way to know with certainty that an item is fake or stolen, here are signs you could be dealing with someone trying to deceive you:

• Lists the item at a very low price
• Pressuring you to make a deal quickly or saying there are several interested buyers
• Claims they are selling an item for someone else
• Won’t tell you where and when they purchased the item
• Offering many expensive items

Bait-and-Switch Scams

A bait-and-switch scam is when a fraudster offers a deal you can’t refuse. When you attempt to purchase the item, the fraudster will raise the price, or they will try to sell you a different item that is more expensive. If someone increases the price of an item after the initial price, stop the sale immediately – it could be a bait-and-switch scam.

Spotting a Fake Profile

One key to stopping fraud on online marketplaces is knowing what a fake profile looks like. Fraudsters will often make a fake profile to trick potential buyers and sellers. Look for lack of photos and very few friends or connections. If you’re questioning the validity of a profile, run a Google Image search on the profile photo to see if that image belongs to someone else. Fraudsters also tend to leave vague or no bio information.

Read the reviews to see what other people have to say about the buyer or seller. If a profile doesn’t have reviews, be wary about selling or purchasing an item from them.

Online marketplaces are a convenient and a great place to find a local deal, but they come with the risk of running into online fraudsters. Fraud trends are frequently changing, especially when it comes to social media scams. At CommunityAmerica, our top priority is providing you with the information and resources needed to keep you, your financial accounts and your personal information secure while providing assistance in regaining control of a compromised account. Contact CommunityAmerica if you suspect fraud on your accounts.